In 1532, after capturing the Inca emperor Atahualpa, the Spanish conquistador Francisco Pizarro issued an unprecedented demand: fill a room, 22 feet long, 17 feet wide, and 8 feet tall, with gold. The Incas complied, but Pizarro executed Atahualpa anyway and promptly shipped the tribute to Spain. At today’s prices of gold, the value of the ransom (3,000 cubic feet of gold at $10 million per cubic foot) would be approximately $30 billion.
That’s a lot of money, and it confirms that as conquerors the Spaniards had a clear vision of what they were up to. Conversion of heathens was fine. Conversion plus precious metals was even better.
Applied to the Iraq War, the traditional logic of imperial conquest clears out the rhetorical cobwebs and clarifies the mind. After all, when you rule out “senseless violence,” there are really only two reasons that human beings fight. One has to do with abstract things-honor, dignity-as in “My family’s venerable name has been besmirched. Scoundrel, we meet at dawn.” The other has to do with concrete things-stuff-as in the actions that typically follow upon a sentence like, “Give me your shoes, punk.”
But most compelling of all is a conjoining of the abstract and the concrete, as in: “We’re spreading democracy-oh, and by the way, there’s a lot of oil in Iraq.”
Of course, everyone is aware of that oil, but it’s fair to guess that if pressed to calculate its actual value, most Americans would probably plead for mercy.
That number, however, can hardly be lost on the leadership of the United States. Bush, Cheney, and Rice, of course, all hail from the oil industry. They do know the value of a barrel, and they know how to measure a reserve. Though Bush may claim to dislike “fuzzy math,” it’s doubtful that he’s lost in the zeros on this one.
For the rest of us, it’s time to do the math.
According to a 2002 estimate by the Energy Department, the quantity of proven, probable, and possible reserves in Iraq is approximately 330 billion barrels. At today’s $64 per barrel, that’s $21 trillion dollars worth of oil.
By the way, that’s $70,000 per U.S. citizen or $200,000 per household (according to population estimates for 2007). Certainly enough to solve most people’s credit card issues.
Maybe this “war for oil” wasn’t such a bad idea after all!
But wait a minute. Are we really in Iraq to grab the oil? After all, America may be an empire, but is it really just like those ancient empires where the victor returned to parade through the streets with legions of captured slaves, tied together at the neck, and wagons obscenely piled with tribute?
Donald Rumsfeld, for one, denied the accusation in no uncertain terms. When asked by NBC’s Steve Kroft his response to those who claimed it was a war for oil, Rumsfeld retorted: “Nonsense. It just isn’t. There are certain things like that, myths, that are floating around. I’m glad you asked. It has nothing to do with oil, literally nothing to do with oil. … Oil is fungible, and people who own it want to sell it, and it will be available.”
Rumsfeld was correct in saying that whether or not the U.S. invaded Iraq, it would in all likelihood still have access to Iraq’s oil over the long term, simply by buying it on the open market. But the comment was disingenuous in that it ignored the immense potential for whoever controlled the resource to extract profit-today’s equivalent of slaves and glory wagons. And Iraq’s oil, which ranks among the cheapest in the world to pump ($.50 to $1.00 per barrel), is nothing if not profitable.
More telling than such disavowals are actual pieces of legislation currently pending in both the United States and Iraq. On the U.S. side, a little-reported portion of both the Senate and the House versions of the current appropriations supplemental, currently headed for conference committee, is a “benchmark” requiring the Iraqi Parliament to pass a new statutory framework for its oil industry known as the Iraq Oil Law.
Meanwhile, in Iraq, after years of behind-the-scenes drafting directed by the occupation authorities, the text of the Iraq Oil Law was leaked to the media shortly before being sent to Parliament by Prime Minister Maliki’s cabinet. The most notable feature of the law is a revival of an exploitive type of contract widely used prior to the rise of Arab nationalism in the 1960s, known as a production sharing agreement. Although the Oil Law uses an alternative term, “exploration and production contract,” the effect is the identical. The new arrangement would allow the bulk of Iraq’s reserves to be controlled by outside oil companies, privatizing what has until now been a nationalized resource under the auspices of the Iraq National Oil Company. It specifies the royalty that will be paid to Iraq: “12.5 percent of gross production, measured at the entry flange to the main pipeline.” And as if the rest of the law were not already explicit enough, Article 35(A) reiterates: “Holders of exploration and production rights may transfer any net profits from petroleum operations to outside Iraq after paying taxes and fees owed.”
If the law is passed, Iraq will part ways with the other major Middle Eastern oil producers, including Saudi Arabia, Kuwait, Libya, and Iran. Those countries all maintain national control over oil, bringing in foreign corporations only as needed using technical service contracts, under which control is not relinquished and there is no sharing of profits.
Significantly, the Democratic leadership brushed off suggestions by Congressman Dennis Kucinich that the Oil Law benchmark be deleted from the supplemental. Thus, when it comes to supporting the privatization of Iraqi oil, it’s hard to find even a crack of daylight between the positions of the Bush Administration and the Democratic Party leadership.
Why are we in Iraq? Sometimes the simplest explanations are the best. Philosophers call that the lex parsiminiae principle; others call it horse sense.
It really is the oil, stupid.
And by the way, stand back Pizarro. Your ransom doesn’t look so fantastic any more. You brought home $30 billion. We’re on the verge of $21 trillion. That room full of gold was a nice start. Let’s see: according to my arithmetic you only need to fill up 699 more rooms like that and you’ll tie our new record for spoils of war.
Ted Nace is the author of Gangs of America: The Rise of Corporate Power and the Disabling of Democracy (Berrett-Koehler, 2003, 2005).
Blood for oil. Fait accompli!
The American elite (rich Republicans and Democrats) are about to win another foreign war for resources.
Poor youth fight old, rich mens’ wars.
Lives are NOT worth more than their profits.
It’s worse than just the money, although that’s bad enough.
These despicable people are perfectly aware that if that oil gets burned, we’re going to ruin the planet. There can be no question about this — it’s why the oil majors embarked on their longstanding disinformation campaign about global warming.
Think of the colossal greed and selfishness of these monsters.
Now look in the mirror, and ask yourself “How much oil did my family use today?”
Relatedly, I really enjoyed reading Solartopia! by Harvey Wasserman, because it gives a pretty decent list of enabling technologies and attitudes that could be readily implemented to get us from where we are (collection of folks in some stage of denial or abject greed) to where we need to be (collection of well-adapted humans).
OuterBeltway,
I agree that it is a good idea to conserve energy, but we can never lose sight of the fact that eventually there must be some sort of political solution, most likely as a result of international pressure. Without a political solution that requires others to limit energy use, you can conserve all you want while the Cheneys of the world burn what you conserved, and use that to get an advantage over you and dominate you, and the whole time ridicule you as a “sucker.”
Let see who started this to stop the USSR , ah we did.
Defending your religion against communism is good but defending it against Christian armies is Bad and uncivilized.
Civilized Muslim freedom fighters should fight invading Soviet army in Afghanistan that is good, but they are terrorist when they fight invading army of the United States in same Muslim lands of Afghanistan and Iraq that is bad.
Am I missing something here, ah that’s right this Muslims are so dumb they can not understand this fair equation.
They will be happy when we the Christian forces of democracy bring them freedom from the dictators and tyrants we had imposed on them and vanish the outdated religion they have been practicing they will be happy to learn the teaching of the lord’s bible they will greet us with candies and flowers.
The author clumsily implies that the murder and robbery on a grand scale that is the Iraq tragedy was intended to, or possibly could, benefit all the people of the US. Of course we all know that is not true. It was intended to benefit a very small number of elites, with most people in the US likely to be worse off as a result. The intended beneficiaries would have even more wealth with which to bully the rest of us and corrupt our political system for their benefit. And even if the general US population gained greater access to and cheaper prices for the oil, that would just lead to more pollution and delay action to change an unsustainable way of life.
Mr. Bush and Mr. Cheney would never do anything to benefit the whole of the US population, as they not only believe they have a duty to benefit only elites like themselves, but it seems they think it is downright immoral to benefit non-elites. Sometimes I think they would rather sell their daughters and wives into slavery than to ever do anything for the hoi polloi, as the social disapproval of their country club set for doing the latter would be too much for them to bear.
On the oil “denial” ridiculous claim, I dated a lawyer who told me… if a woman comes home and finds her husband in bed with another woman, he should get up and say, “Honey! It’s not what you think.” Mind control, smoke and mirrors, what you see ain’t what you get, fair is foul and foul is fair… c’mon this war of propaganda presumes that all of us are asleep at the wheel. As if lying is other than what it is, for causes so evident that their darkness is so overpowering, many look away and gladly embrace false explanations. The symbolism is just beyond the pale… war in the holy land over oil, the soft loan from Allah, as politicians grease each other’s palms, and they all sell out for mammon, while the planet is burning up (or at least experiencing Earth Mother’s HOT flashes!)
Siouxrose:
Nobody can top that last image of yours! Well done and nicely said!
Even if the White House drafted Oil Law were enacted by the current Iraqi government (or a replacement regime even more under the control of Washington), such a shameless gift on legal paper of Iraq’s natural resources to the western petroleum cartel in decades long production sharing agreements would be hard to translate into real profits.
How do you do the exploration and drilling in the middle of a raging civil war? How do you secure the pipelines? How do you secure the Gulf shipping lanes as the violence spreads outward? How do you prevent a future Iraqi regime from renouncing and invalidating the PSA’s as the obvious product of duress or fraud?
It is of course inviting to see the continuous pushing and prodding of the Maliki government by the Bush administration to pass their oil law as proof of the junta’s silent motive in launching the invasion and in setting up a long term military occupation of Iraq in the first place. But like the WMD, the Saddam/Osama links, the dancing in the streets, and so many other grandiose visions of the Bush pipe dream of empire, those fantastic oil riches are largely illusion, a mirage in the desert, most likely just another pot of gold at the end of Little George’s rainbow.
I knew before the invasion of Iraq (as did many others, I’m sure} that it was all about oil. The two parties in Washington D.C. are both beholden to the oil companies, that’s why Hillary Clinton, John Edwards, and Derek Obama all support keeping the troops in Iraq. The same can be said for the Republican Party. There are a few exceptions. A few politicians are not in favor of stealing Iraq’s natural resources, but they are a small number and will not be able to change what is already well on its way to becoming reality. It’s up to the people of Iraq to make it clear that they will not let this happen. I am sure they will be raising literal hell over this issue. The question is: can they get the puppet regime of Maliki to reject such an unfair law.
As to the oil never making it to market because of sabotage, this may occur from time to time, but believe me, the one thing this administration did and does have a plan for is defending those pipelines transporting oil. Make no mistake about that. After all, what was the one thing protected during the initial invasion: Anything and everything that had to do with oil.
Yes, as the author of the article mentioned, there are only two reasons to fight a war and the reason in this case is Iraq’s oil wealth. Also, as long as there is turmoil in the Mid East, oil prices will remain high, not too high, but high enough to bring in hefty profits.
I don’t know, but has there ever been a precedent for war profiteering and punishment for war profiteers? If so, this is the time to bring these people to justice. What is sad is that most of our judiciary has been compromised, most notably the Supreme Court. More evidence of that was the recent ruling making certain forms of abortion illegal. This is a first step toward overturning Row versus Wade.
Another question I have is: how and who has the power to remove corrupt Supreme Court justices? There must be somewhere in the constitution where this is mentioned because the original framers of our amazingly prescient constitution had thought about every contingency in my opinion.
Plundering the riches of other countries has been going on throughout history. What makes it such a shame is that there are other solutions to the looming energy crisis. And what makes it even sadder is that the USA, the country responsible for so many advances in all fields, is taking the low road and in the process trashing not only what this country strived to be from the beginning but also trashing our reputation around the world.
We must impeach Bush and Cheney. Rove must finally be caught in some rat trap. And the politicians in the pay of corporations must be removed from office with our votes. Finally, a close look at the Supreme Court is, I believe, worth pursuing. I think we could begin with Scalia.
Let the resource wars begin! China’s preparing, Russia’s getting ready, and most of the rest of the world is sick of us and our killing and our stealing and our lying and our denial and our arrogance and, most importantly, our insatiable greed.
Will the corporations ever stop pushing unlimited consumerism? Will the obscenely wealthy sudden become enlightened? Will the power-mongers suddenly realize how ridiculous their priorities are? Was that a polka-dot pig I saw doing the samba on the moon?
Kivals:
You are perfectly correct about selfish people: their strategy is, and always has/will be, to get others to do their work and the sacrifice. I despise this unfortunate trait in some of us.
I’ve decided that this fight has two fronts: what I can do without help/cooperation from others, and what I can attempt to influence others to do. So far, the time spent doing what I can do has been much more productive than the time spent trying to convince others, and that’s the only reason I advocate it.
Otherwise, I’d do a lot more pontificating; it’s fun and I’m good at it. The only problem is that it doesn’t work.
OuterBeltway,
We all love pontificating! But we can do something political of substance. I have contributed money but not time and I know I should contribute time to good causes as well. I just hate the idea of good people making sacrifices to reduce their effect and then the Bushes and the Cheneys see a decrease in a particular pollutant, say pollutant X, and they: (1) take credit for it; (2) say “see, things aren’t that bad;” and (3) argue that the planet has shown it can take more of X, so they can give some allowance to some campaign contributor so the campaign contributor can produce that extra amount of X, and the contributor saves money, part of which can be used for future campaign contributions for other Republicans.
Amen brother! I’ve been estimating it a around 15T since the war began. I was only off by about 8.5 yearly Pentagon budgets.
People are amazed at these numbers. Alaska’s oil? Oil under the Gulf of Mexico, they say, is still untapped. So what? Alaska and the Gulf are a drop in the hottub by comparison.