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A War for Oil? Not This Time

February 13, 2003
By MAX BOOT






MUNICH - When Secretary of Defense Donald Rumsfeld visited
"Old Europe" last week, the placards and protesters lining
his path were a visceral reminder of what the Bush
administration already knew: Solid majorities in key
European countries think that greed is our motive for
wanting to depose Saddam Hussein. In fact, in a recent Pew
Research Center poll 75 percent of respondents in France,
54 percent in Germany and 76 percent in Russia said that
America wants to invade Iraq because "the U.S. wants to
control Iraqi oil."

Although Americans are divided on the wisdom of an
invasion, only 22 percent of us subscribe to the cynical
view that it's just about oil. Even Jimmy Carter, hardly a
hawk, rebutted the accusation at the Nobel Peace Prize
ceremony: "I know my country, I know my people, and I can
assure you that's not the policy of my government."

What accounts for this trans-Atlantic disconnect? To answer
that question, start by considering the accusation on the
merits: Is America going into Iraq in search of "black
gold"?

The charge has a surface plausibility because Iraq does
have the second-largest known reserves in the world. But we
certainly don't need to send 250,000 soldiers to get at it.
Saddam Hussein would gladly sell us all the oil we wanted.
The only thing preventing unlimited sales are the United
States-enforced sanctions, which Baghdad (and the big oil
companies) would love to see lifted. Washington has refused
to go along because Saddam Hussein flouts United Nations
resolutions. This suggests that our primary focus is the
threat he poses, not the oil he possesses.

It's true that overthrowing Saddam Hussein would lead to
the lifting of sanctions and a possible increase in oil
exports. But it would take a lot of time and money to
rebuild Iraq's dilapidated oil industry, even if the regime
didn't torch everything on the way out. A study from the
Council on Foreign Relations and the James A. Baker III
Institute at Rice University estimated that it would take
three years and $5 billion to restore Iraqi production just
to its pre-1990 level of 3.5 million barrels a day. That
would increase total world production by only 1.3 percent,
and might not reduce prices at all if other countries cut
output or banded together to keep prices stable.

Some optimists think a postwar Iraq would stiff OPEC and
slash prices radically. This seems unlikely, if the
experience of Kuwait is anything to go by. While oil prices
spiked before the Persian Gulf war and plummeted afterward,
the long-term impact has been close to nil. Kuwait hasn't
exactly been offering to fill up American sport utility
vehicles free out of gratitude for being liberated. It
hasn't even carried out its pledge to allow direct foreign
investment in state-owned oil fields.

As with Kuwait, a liberated Iraq would likely remain an
enthusiastic member of OPEC because it would need to
establish its nationalist credentials and maintain amicable
relations with its oil-cartel neighbors.

For that matter, would our government really want a steep
drop in prices? The domestic oil patch - including
President Bush's home state, Texas - was devastated in the
1980's when prices fell as low as $10 a barrel. Washington
is generally happy with a range of $18 to $25 a barrel,
about where oil was before the strikes in Venezuela and
jitters about Iraq helped push prices over $34 a barrel. If
we were really concerned about cheap oil above all, we'd be
sending troops to Caracas, not Baghdad.

The other possible economic advantage in Iraq would be for
American companies to win contracts to put out fires,
repair refineries and help operate the oil industry, as
they did in Kuwait. What's the total value of such work?
It's impossible to say, but last year Iraq signed a deal
with Russian companies (since canceled by Saddam Hussein)
to rebuild oil and other industries, valued at $40 billion
over five years.

Yet the White House estimates the military operation alone
would cost $50 billion to $60 billion. (Others suggest the
figure would be far higher.) And rebuilding of the
country's cities, roads and public facilities would cost
$20 billion to $100 billion more, with much of that money
in the initial years coming from the "international
community" (read: Uncle Sam).

Thus, if a capitalist cabal were running the war, it would
have to conclude it wasn't a paying proposition.

This doesn't mean that oil is entirely irrelevant to the
subject of Iraq. It does matter in one very important way:
Oil revenues make Saddam Hussein much more dangerous than
your run-of-the-mill dictator, because they give him the
ability to build not only palaces but also top-of-the-line
weapons of mass destruction.

Americans recognize this. Europeans don't. Why not? Here's
my theory: Europeans are projecting their own behavior onto
us. They know that their own foreign policies have in the
past often been driven by avarice - all those imperialists
after East Indian spices or African diamonds. (This
tradition is going strong today in Russia and France, whose
Iraq policies seem driven at least in part by oil companies
that were granted lucrative concessions by Saddam Hussein.)


Nobody would claim that America's global intentions have
always been entirely pure. Still, our foreign policy - from
the Barbary war to Kosovo - has usually had a strain of
idealism at which the cynical Europeans have scoffed. In
the case of Iraq, they just can't seem to accept that we
might be acting for, say, the general safety and security
of the world. After more than 200 years, Europe still
hasn't figured out what makes America tick.


Max Boot, a senior fellow at the Council on Foreign
Relations, is author of "The Savage Wars of Peace: Small
Wars and the Rise of American Power."

http://www.nytimes.com/2003/02/13/opinion/13BOOT.html?ex=1046161758&ei=1&en=3fa9973fcd4cf9e7



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