IRAQI RESISTANCE

Independent: Oil, war and a growing sense of panic in the US by Robert Fisk (complete)
01 October 2003 [Premium article - fee required]

Don't tell me that America would have invaded Iraq if its chief export was beetroot

Oil is slippery stuff but not as slippery as the figures now being
peddled by Iraq's American occupiers. Up around Kirkuk, the authorities are
keeping the sabotage figures secret - because they can't stop their pipelines
to Turkey blowing up. And down in Baghdad, where the men who produce
Iraq's oil production figures are beginning to look like the occupants of
Plato's cave - drawing conclusions from shadows on their wall - the statistics
are being cooked. Paul Bremer, the US proconsul who wears combat boots, is
"sexing up" the figures to a point where even the oilmen are shaking
their heads.

Take Kirkuk. Only when the television cameras capture a blown pipe,
flames billowing, do the occupation powers report sabotage. This they did, for
example, on 18 August. But the same Turkish pipeline has been hit
before and since. It was blown on 17 September and four times the following
day. US patrols and helicopters move along the pipeline but, in the huge
ravines and tribal areas through which it passes, long sections are
indefensible.

European oilmen in Baghdad realise now that Iraqi officials in the oil
ministry - one of only two government institutions that the Americans
defended from the looters - knew very well that the sabotage was going
to occur. "They told me in June that there would be no oil exports from
the north," one of them said to me this week. "They knew it was going to be
sabotaged - and it had obviously been planned long before the invasion
in March."

Early in their occupation, the Americans took the quiet - and unwise -
decision to re-hire many Baathist oil technocrats, which means that a
large proportion of ministry officials are still ambivalent towards the
Americans. The only oil revenues the US can get are from the south. In
the middle of August, Mr Bremer gave the impression that production stood
at about 1.5 million barrels a day. But the real figure at that time was
780,000 barrels and rarely does production reach a million. In the
words of an oil analyst visiting Iraq, this is "an inexcusable catastrophe".

When the US attacked Iraq in March, the country was producing 2.7
million barrels a day. It transpires that in the very first hours after they
entered Baghdad on 9 April, American troops allowed looters into the
oil ministry. By the time senior officers arrived to order them out, they
had destroyed billions of dollars of irreplaceable seismic and drilling
data.

While the major oil companies in the US stand to cream off billions of
dollars if oil production resumes in earnest, many of their executives
were demanding to know from the Bush administration - long before the war -
how it intended to prevent sabotage. In fact, Saddam had no plans to
destroy the oil fields themselves, plenty for blowing up the export pipes. The
Pentagon got it the wrong way round, racing its troops to protect the
fields but ignoring the vulnerable pipelines.

Anarchy is now so widespread in post-war Iraq that it is almost
impossible for international investors to work there. There is no insurance for
them - which is why Mr Bremer's occupation administrators have secretly
decided that well over half the $20bn (£12bn) earmarked for Iraq will go
towards security for its production infrastructure.

During the war, a detailed analysis by Yahya Sadowski, a professor at
the American University of Beirut, suggested that repairing wells and pipes
would cost $1bn, that raising oil production to 3.5 million barrels a
day would take three years and cost another $8bn investment and another
$20bn for repairs to the electrical grid which powers the pumps and
refineries. Bringing production up to six million barrels a day would cost a
further $30bn, some say up $100bn.

In other words - assuming only $8bn of the $20bn can be used on
industry - the Bush overall budget of $87bn which now horrifies Congress is likely
to rise towards a figure of $200bn. Ouch.

Since the 1920s, only about 2,300 wells have been drilled in Iraq and
those are in the valleys of the Tigris and Euphrates. Its deserts are almost
totally unexplored. Officially, Iraq contains 12 per cent of the
world's oil 5reserves - two-thirds of the world's reserves are in just four
other countries, Saudi Arabia, Iran, Kuwait and the Emirates - but it could
contain 20 per cent, even 25 per cent.

It's possible to argue that it was Saddam's decision to switch from the
dollar to the euro in November 2000 that made "regime change" so
important to the US. When Iran threatened to do the same, it was added to the
"axis of evil". The defence of the dollar is almost as important as oil.

But the real irony lies in the nature of America's new power in Iraq.
US oil deposits are increasingly depleted and by 2025, its oil imports
will account for perhaps 70 per cent of total domestic demand. It needs to
control the world's reserves - and don't tell me the US would have
invaded Iraq if its chief export was beetroot - and it now has control of
perhaps 25 per cent of
world reserves.

But it can't make the oil flow. The cost of making it flow could
produce an economic crisis in the US. And it is this - rather than the daily
killing of young American soldiers - that lies behind the Bush administration's
growing panic. Washington has got its hands on the biggest treasure
chest in the world - but it can't open the lid. No wonder they are cooking
the books in Baghdad.

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