Tuesday, March 29, 2005

Palast: Big-Oil 1, Neo-Cons 0

The nomination of Paul Wolfowitz to head the World Bank is not a victory for Mr. Wolfowitz, according to journalist Greg Palast. Instead, Palast argues, it's an indication that his career as a policy-making Defense Department insider has run its course.


Some conspiracy nuts believe the Bush Administration had a secret plan to control Iraq's oil. In fact, there were TWO plans. In a joint investigation with BBC Television Newsnight, Harper's Magazine has uncovered a hidden battle over Iraq's oil. It began right after Mr. Bush took office - with a previously unreported plot to invade Iraq.
And guess what?
Within weeks of the first inaugural, prominent Iraqi expatriates -- many with ties to U.S. industry -- were invited to secret discussions directed by Pamela Quanrud, National Security Council, now at the State Department. "It quickly became an oil group," [according to] one participant, Falah Aljibury. Aljibury is an advisor to Amerada Hess' oil trading arm and Goldman Sachs.
Very interesting indeed. The neocons get the Iraqi expatriate leaders together and try to figure out how to take over Iraq.
by February 2003, a hundred-page blue-print for the occupied nation, favored by neo-cons, had been enshrined as official policy. "Moving the Iraqi Economy from Recovery to Sustainable Growth" generally embodied the principles for postwar Iraq favored by Deputy Defense Secretary Paul Wolfowitz and the Iran-Contra figure, now Deputy National Security Advisor, Elliott Abrams. The blue-print mapped out a radical makeover of Iraq as a free-market Xanadu including, on page 73, the sell-off of the nation's crown jewels: "privatization… [of] the oil and supporting industries."
Neocons' 'thinking' runs as follows:
if Iraq's fields were broken up and sold off, competing operators would crank up production. This extra crude would flood world petroleum markets, OPEC would devolve into mass cheating and overproduction, oil prices would fall over a cliff, and Saudi Arabia, both economically and politically, would fall to its knees.
Aha! The enemies of mighty USA all falling to their knees at the same time. What a wonderful neocon world it would be.

And of course it was all a flower-throwing fantasy.
However, in plotting the destruction of OPEC, the neocons failed to predict the virulent resistance of insurgent forces: the U.S. oil industry itself. Rob McKee, a former executive vice-president of ConocoPhillips, designated by the Bush Administration to advise the Iraqi oil ministry, had little tolerance for the neocons' threat to privatize the oil fields nor their obsession on ways to undermine OPEC. (In 2004, with oil approaching the $50 a barrel mark all year, the major U.S. oil companies posted record or near-record profits. ConocoPhillips this February reported a doubling of its quarterly profits.)
Are you seeing how this works? Rob McKee is "designated by the Bush Administration to advise the Iraqi oil ministry" and yet he apparently delivers more than advice!
In November 2003, McKee quietly ordered up a new plan for Iraq's oil. For months, the State Department officially denied the existence of this 323-page plan, but when I threatened legal action, I was able to obtain the multi-volume document describing seven possible models of oil production for Iraq, each one merely a different flavor of a single option: a state-owned oil company under which the state maintains official title to the reserves but operation and control are given to foreign oil companies.
Seven flavors of vanilla. And ha! ha! Guess what?
According to Ed Morse, another Hess Oil advisor, the switch to an OPEC-friendly policy for Iraq was driven by Dick Cheney. "The VP's office [has] not pursued a policy in Iraq that would lead to a rapid opening of the Iraqi energy sector… that would put us on a track to say, "We're going to put a squeeze on OPEC."

Cheney, far from "putting the squeeze on OPEC," has taken a defacto seat there, allowing the cartel to maintain its suffocating grip on the U.S. economy.
And so: Paul Wolfowitz is off to the World Bank where he cannot do quite so much damage [or at least that's the plan] and Dick Cheney has "a de facto seat" on OPEC. Say goodbye to the despicable little chicken-hawk. Say hello to the despicable and slightly larger vice president.