Monday, October 16, 2006

War in Iran

Does Bush Think War with Iran Is Preordained?
By Chris Hedges, Truthdig
Posted on October 10, 2006, Printed on October 16, 2006

The aircraft carrier Eisenhower, accompanied by the guided-missile cruiser USS Anzio, guided-missile destroyer USS Ramage, guided-missile destroyer USS Mason and the fast-attack submarine USS Newport News, is, as I write, making its way to the Straits of Hormuz off Iran. The ships will be in place to strike Iran by the end of the month. It may be a bluff. It may be a feint. It may be a simple show of American power. But I doubt it.

War with Iran -- a war that would unleash an apocalyptic scenario in the Middle East -- is probable by the end of the Bush administration. It could begin in as little as three weeks. This administration, claiming to be anointed by a Christian God to reshape the world, and especially the Middle East, defined three states at the start of its reign as "the Axis of Evil." They were Iraq, now occupied; North Korea, which, because it has nuclear weapons, is untouchable; and Iran. Those who do not take this apocalyptic rhetoric seriously have ignored the twisted pathology of men like Elliott Abrams, who helped orchestrate the disastrous and illegal contra war in Nicaragua, and who now handles the Middle East for the National Security Council. He knew nothing about Central America. He knows nothing about the Middle East. He sees the world through the childish, binary lens of good and evil, us and them, the forces of darkness and the forces of light. And it is this strange, twilight mentality that now grips most of the civilian planners who are barreling us towards a crisis of epic proportions.

These men advocate a doctrine of permanent war, a doctrine which, as William R. Polk points out, is a slight corruption of Leon Trotsky's doctrine of permanent revolution. These two revolutionary doctrines serve the same function, to intimidate and destroy all those classified as foreign opponents, to create permanent instability and fear and to silence domestic critics who challenge leaders in a time of national crisis. It works. The citizens of the United States, slowly being stripped of their civil liberties, are being herded sheep-like, once again, over a cliff.

But this war will be different. It will be catastrophic. It will usher in the apocalyptic nightmares spun out in the dark, fantastic visions of the Christian right. And there are those around the president who see this vision as preordained by God; indeed, the president himself may hold such a vision.

The hypocrisy of this vaunted moral crusade is not lost on those in the Middle East. Iran actually signed the Nuclear Non-Proliferation Treaty. It has violated a codicil of that treaty written by European foreign ministers, but this codicil was never ratified by the Iranian parliament. I do not dispute Iran's intentions to acquire nuclear weapons nor do I minimize the danger should it acquire them in the estimated five to 10 years. But contrast Iran with Pakistan, India and Israel. These three countries refused to sign the treaty and developed nuclear weapons programs in secret. Israel now has an estimated 400 to 600 nuclear weapons. The word "Dimona," the name of the city where the nuclear facilities are located in Israel, is shorthand in the Muslim world for the deadly Israeli threat to Muslims' existence. What lessons did the Iranians learn from our Israeli, Pakistani and Indian allies?

Given that we are actively engaged in an effort to destabilize the Iranian regime by recruiting tribal groups and ethnic minorities inside Iran to rebel, given that we use apocalyptic rhetoric to describe what must be done to the Iranian regime, given that other countries in the Middle East such as Egypt and Saudi Arabia are making noises about developing a nuclear capacity, and given that, with the touch of a button Israel could obliterate Iran, what do we expect from the Iranians? On top of this, the Iranian regime grasps that the doctrine of permanent war entails making "preemptive" and unprovoked strikes.

Those in Washington who advocate this war, knowing as little about the limitations and chaos of war as they do about the Middle East, believe they can hit about 1,000 sites inside Iran to wipe out nuclear production and cripple the 850,000-man Iranian army. The disaster in southern Lebanon, where the Israeli air campaign not only failed to break Hezbollah but united most Lebanese behind the militant group, is dismissed. These ideologues, after all, do not live in a reality-based universe. The massive Israeli bombing of Lebanon failed to pacify 4 million Lebanese. What will happen when we begin to pound a country of 70 million people? As retired General Wesley K. Clark and others have pointed out, once you begin an air campaign it is only a matter of time before you have to put troops on the ground or accept defeat, as the Israelis had to do in Lebanon. And if we begin dropping bunker busters, cruise missiles and iron fragmentation bombs on Iran this is the choice that must be faced -- either sending American forces into Iran to fight a protracted and futile guerrilla war or walking away in humiliation.

"As a people we are enormously forgetful," Dr. Polk, one of the country's leading scholars on the Middle East, told an Oct. 13 gathering of the Foreign Policy Association in New York. "We should have learned from history that foreign powers can't win guerrilla wars. The British learned this from our ancestors in the American Revolution and re-learned it in Ireland. Napoleon learned it in Spain. The Germans learned it in Yugoslavia. We should have learned it in Vietnam and the Russians learned it in Afghanistan and are learning it all over again in Chechnya and we are learning it, of course, in Iraq. Guerrilla wars are almost unwinnable. As a people we are also very vain. Our way of life is the only way. We should have learned that the rich and powerful can't always succeed against the poor and less powerful."

An attack on Iran will ignite the Middle East. The loss of Iranian oil, coupled with Silkworm missile attacks by Iran on oil tankers in the Persian Gulf, could send oil soaring to well over $110 a barrel. The effect on the domestic and world economy will be devastating, very possibly triggering a huge, global depression. The 2 million Shiites in Saudi Arabia, the Shiite majority in Iraq and the Shiite communities in Bahrain, Pakistan and Turkey will turn in rage on us and our dwindling allies. We will see a combination of increased terrorist attacks, including on American soil, and the widespread sabotage of oil production in the Gulf. Iraq, as bad as it looks now, will become a death pit for American troops as Shiites and Sunnis, for the first time, unite against their foreign occupiers.

The country, however, that will pay the biggest price will be Israel. And the sad irony is that those planning this war think of themselves as allies of the Jewish state. A conflagration of this magnitude could see Israel drawn back in Lebanon and sucked into a regional war, one that would over time spell the final chapter in the Zionist experiment in the Middle East. The Israelis aptly call their nuclear program "the Samson option." The Biblical Samson ripped down the pillars of the temple and killed everyone around him, along with himself.

If you are sure you will be raptured into heaven, your clothes left behind with the nonbelievers, then this news should cheer you up. If you are rational, however, these may be some of the last few weeks or months in which to enjoy what is left of our beleaguered, dying republic and way of life.

Chris Hedges is the former Middle East bureau chief for The New York Times and the author of "War Is a Force That Gives Us Meaning."
© 2006 Independent Media Institute. All rights reserved.
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Iraq Oil For Bush Wealth Enhancement

Bush's Petro-Cartel Almost Has Iraq's Oil
By Joshua Holland, AlterNet
Posted on October 16, 2006, Printed on October 16, 2006
Editor's note: this is the first of a two-part series.

Iraq is sitting on a mother lode of some of the lightest, sweetest, most profitable crude oil on earth, and the rules that will determine who will control it and on what terms are about to be set.

The Iraqi government faces a December deadline, imposed by the world's wealthiest countries, to complete its final Oil Law. Industry analysts expect that the result will be a radical departure from the laws governing the country's oil-rich neighbors, giving foreign multinationals a much higher rate of return than with other major oil producers, and locking in their control over what George Bush called Iraq's "patrimony" for decades, regardless of what kind of policies future elected governments might want to pursue.

Iraq's energy reserves are an incredibly rich prize; according to the US Department of Energy, "Iraq contains 112 billion barrels of proven oil reserves, the second largest in the world (behind Saudi Arabia) along with roughly 220 billion barrels of probable and possible resources. Iraq's true potential may be far greater than this, however, as the country is relatively unexplored due to years of war and sanctions." For perspective, the Saudis have 260 billion barrels of proven reserves.

Iraqi oil is close to the surface and easy to extract, making it all the more profitable. James Paul, Executive Director of the Global Policy Forum, points out that oil companies "can produce a barrel of Iraqi oil for less than $1.50 and possibly as little as $1, including all exploration, oilfield development and production costs." Contrast that with other areas where oil is considered cheap to produce at $5 per barrel, or the North Sea where production costs are $12-16 per barrel.

And Iraq's oil sector is largely undeveloped. Former Iraqi Oil Minister Issam Chalabi (no relation to the neocons' favorite exile, Ahmed Chalabi) told the Associated Press that "Iraq has more oil fields that have been discovered, but not developed, than any other country in the world." British-based analyst Mohammad Al-Gallani told the Canadian Press that of 526 prospective drilling sites, just 125 have been opened.

But the real gem -- what one oil consultant called the "Holy Grail" of the industry -- lies in Iraq's vast Western desert. It's one of the last "virgin" fields on the planet, and it has the potential to catapult Iraq to number one in the world in oil reserves. Sparsely populated, the Western fields are less prone to sabotage than the country's current centers of production in the North, near Kirkuk, and in the South near Basra. The Nation's Aram Roston predicts Iraq's Western desert will yield "untold riches."

Iraq also may have large natural gas deposits that so far remain virtually unexplored.

But even "untold riches" don't tell the whole story. Depending on how Iraq's petroleum law shakes out, the country's enormous reserves could break the back of OPEC, a wet dream in Western capitals for three decades. James Paul predicted that "even before Iraq had reached its full production potential of 8 million barrels or more per day, the companies would gain huge leverage over the international oil system. OPEC would be weakened by the withdrawal of one of its key producers from the OPEC quota system." Depending on how things shape up in the next few months, Western oil companies could end up controlling the country's output levels, or the government, heavily influenced by the U.S., could even pull out of the cartel entirely.

Both independent analysts and officials within Iraq's Oil ministry anticipate that when all is said and done, the big winners in Iraq will be the Big Four -- the American firms Exxon-Mobile and Chevron-Texaco, and the British BP-Amoco and Royal Dutch-Shell -- that dominate the world oil market. Ibrahim Mohammed, an industry consultant with close contacts in the Iraqi Oil Ministry, told the Associated Press that there's a universal belief among ministry staff that the major U.S. companies will win the lion's share of contracts. "The feeling is that the new government is going to be influenced by the United States," he said.

During the twelve-year sanction period, the Big Four were forced to sit on the sidelines while the government of Saddam Hussein cut deals with the Chinese, French, Russians and others (despite the sanctions, the U.S. ultimately received 37 percent of Iraq's oil during the period, according to the independent committee that investigated the Oil-for-food program, but almost all of it arrived through foreign firms). In a 1999 speech, Dick Cheney, then CEO of the oil services company Halliburton, told a London audience that the Middle East was where the West would find the additional fifty million barrels of oil per day that he predicted it would need by 2010, but, he lamented, "while even though companies are anxious for greater access there, progress continues to be slow."

Chafing at the idea that the Chinese and Russians might end up with what is arguably the world's greatest energy prize, industry leaders lobbied hard for regime change throughout the 1990s. With the election of George W. Bush and Dick Cheney in 2000 -- the first time in U.S. history that two veterans of the oil industry had ever occupied the nation's top two jobs -- they would finally get the "greater access" to the region's oil wealth after which they had long lusted.

If the U.S. invasion of Iraq had occurred during the colonial era a hundred years earlier, the oil giants, backed by U.S. forces, would have simply seized Iraq's oil fields. Much has changed since then in terms of international custom and law (when then-Deputy Secretary of Defense Paul Wolfowitz did in fact suggest seizing Iraq's Southern oil fields in 2002, Colin Powell dismissed the idea as "lunacy").

Understanding how Big Oil came to this point, poised to take effective control of the bulk of the country's reserves while they remain, technically, in the hands of the Iraqi government -- a government with all the trappings of sovereignty -- is to grasp the sometimes intricate dance that is modern neocolonialism. The Iraq oil-grab is a classic case study.

It's clear that the U.S.-led invasion had little to do with national security or the events of September 11. Former Treasury Secretary Paul O'Neill revealed that just 11 days after Bush's inauguration in early 2001, regime change in Iraq was "Topic A" among the administration's national security staff, and former Terrorism Tsar Richard Clarke told 60 minutes that the day after the attacks in New York and Washington occurred, "[Secretary of Defense Donald] Rumsfeld was saying that we needed to bomb Iraq." He added: "We all said … no, no. Al-Qaeda is in Afghanistan."

On March 7, 2003, two weeks before the U.S. attacked Iraq, the UN's chief weapons inspector, Hans Blix, told the UN Security Council that Saddam Hussein's cooperation with the inspections protocol had improved to the point where it was "active or even proactive," and that the inspectors would be able to certify that Iraq was free of prohibited weapons within a few months' time. That same day, IAEA head Mohammed ElBaradei reported that there was no evidence of a current nuclear program in Iraq and flatly refuted the administration's claim that the infamous aluminum tubes cited by Colin Powell in making his case for war before the Security Council were part of a reconstituted nuclear program.

But serious planning for the war had begun in February of 2002, as Bob Woodward revealed in his book, Plan of Attack. Planning for the future of Iraq's oil wealth had been under way for longer still.

In February of 2001, just weeks after Bush was sworn in, the same energy executives that had been lobbying for Saddam's ouster gathered at the White House to participate in Dick Cheney's now infamous Energy Taskforce. Although Cheney would go all the way to the Supreme Court to keep what happened at those meetings a secret, we do know a few things thanks to documents obtained by the conservative legal group JudicialWatch. As Mark Levine wrote in The Nation($$):

… a map of Iraq and an accompanying list of "Iraq oil foreign suitors" were the center of discussion. The map erased all features of the country save the location of its main oil deposits, divided into nine exploration blocks. The accompanying list of suitors revealed that dozens of companies from thirty countries--but not the United States--were either in discussions over or in direct negotiations for rights to some of the best remaining oilfields on earth.

Levine wrote, "It's not hard to surmise how the participants in these meetings felt about this situation."

According to The New Yorker, at the same time, a top-secret National Security Council memo directed NSC staff to "cooperate fully with the Energy Taskforce as it considered melding two seemingly unrelated areas of policy." The administration's national security team was to join "the review of operational policies towards rogue states such as Iraq, and actions regarding the capture of new and existing oil and gas fields."

At the State Department, planning was also underway. Under the auspices of the "Future of Iraq Project," an "Oil and Energy Working Group" was established. The full membership of the group -- described by the Financial Times as "Iraqi oil experts, international consultants" and State Department staffers -- remains classified, but among them, according to Antonia Juhasz's The Bush Agenda, was Ibrahim Bahr al-Uloum, who would serve in Iyad Allawi's cabinet during the period of the Iraqi Governing Council, and later as Iraq's Oil Minister in 2005. The group concluded that Iraq's oil "should be opened to international oil companies as quickly as possible after the war."

But the execs from Big Oil didn't just want access to Iraq's oil; they wanted access on terms that would be inconceivable unless negotiated at the barrel of a gun. Specifically, they wanted an Iraqi government that would enter into Production Service Agreements (PSAs) for the extraction of Iraq's oil.

PSAs, developed in the 1960s, are a tool of today's kinder, gentler neocolonialism; they allow countries to retain technical ownership over energy reserves but, in actuality, lock in multinationals' control and extremely high profit margins -- up to thirteen times oil companies' minimum target, according to an analysis by the British-based oil watchdog Platform (PDF).

As Greg Muttit, an analyst with the group, notes:

Such contracts are often used in countries with small or difficult oilfields, or where high-risk exploration is required. They are not generally used in countries like Iraq, where there are large fields which are already known and which are cheap to extract. For example, they are not used in Iran, Kuwait or Saudi Arabia, all of which maintain state control of oil.

In fact, Muttit adds, of the seven leading oil producing countries, only Russia has entered into PSAs, and those were signed during its own economic "shock therapy" in the early 1990s. A number of Iraq's oil-rich neighbors have constitutions that specifically prohibit foreign control over their energy reserves.

PSAs often have long terms -- up to 40 years -- and contain "stabilization clauses" that protect them from future legislative changes. As Muttit points out, future governments "could be constrained in their ability to pass new laws or policies." That means, for example, that if a future elected Iraqi government "wanted to pass a human rights law, or wanted to introduce a minimum wage [and it] affected the company's profits, either the law would not apply to the company's operations, or the government would have to compensate the company for any reduction in profits." It's Sovereignty Lite.

The deals are so onerous that they govern only 12 percent of the world's oil reserves, according to the International Energy Agency. Nonetheless, PSAs would become the Future of Iraq Project's recommendation for the fledgling Iraqi government. According to the Financial Times, "many in the group" fought for the contract structure; a Kurdish delegate told the FT, "everybody keeps coming back to PSAs."

Of course, the plans for Iraq's legal framework for oil have to be viewed in the context of the overall transformation of the Iraqi economy. Clearly, the idea was to pursue a radical corporatist agenda during the period of the Coalition Provisional Authority when the U.S. occupation forces were a de facto dictatorship. And that's just what happened; under L. Paul Bremer, the CPA head, corporate taxes were slashed, a flat-tax on income was established, rules allowing multinationals to pull all of their profits from the country and a series of other provisions were enacted. These were then integrated into the Iraqi Constitution and remain in effect today.

Among the provisions in the Constitution, unlike those of most oil producers, is a requirement that the government "develop oil and gas wealth … relying on the most modern techniques of market principles and encouraging investment." The provision mandates that foreign companies would receive a major stake in Iraq's oil for the first time in the thirty years since the sector was nationalized in 1975.

Herbert Docena, a researcher with the NGO Focus on the Global South, wrote that an early draft of the Constitution negotiated by Iraqis envisioned a "Scandinavian-style welfare system in the Arabian desert, with Iraq's vast oil wealth to be spent upholding every Iraqi's right to education, health care, housing, and other social services." "Social justice," the draft declared, "is the basis of building society."

What happened between that earlier draft and the Constitution that Iraqis would eventually ratify? According to Docena:

While [U.S. Ambassador to Iraq Zalmay] Khalilzad and his team of US and British diplomats were all over the scene, some members of Iraq's constitutional committee were reduced to bystanders. One Shiite member grumbled, 'We haven't played much of a role in drafting the constitution. We feel that we have been neglected.' A Sunni negotiator concluded: 'This constitution was cooked up in an American kitchen not an Iraqi one.'

With a Constitution cooked up in DC, the stage was set for foreign multinationals to assume effective control of as much as 87 percent of Iraq's oil, according to projections by the Oil Ministry. If PSAs become the law of the land -- and there are other contractual arrangements that would allow private companies to invest in the sector without giving them the same degree of control or such usurious profits -- the war-torn country stands to lose up to $194 billion vitally important dollars in revenues on just the first 12 fields developed, according to a conservative estimate by Platform (the estimate assumes oil at $40 per barrel; at this writing it stands at more than $59). That's more than six times the country's annual budget.
To complete the rip-off, the occupying coalition would have to crush Iraqi resistance, make sure it had friendly people in the right places in Iraq's emerging elite and lock the new Iraqi government onto a path that would lead to the Big Four's desired outcome.

See part two tomorrow.

Joshua Holland is an AlterNet staff writer.

© 2006 Independent Media Institute. All rights reserved.
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