[wordup] Why is nobody talking about Oil?

[Adam Shand]

The Listener is New Zealands equivelent of TV Guide, but it also does a
fair amount of legit journalism.

From: Brett Shand <brett at earthlight.co.nz>

>From the New Zealand Listener (October 13-19 2001)

In the war against terrorism, why is nobody talking about oil?
BY GORDON CAMPBELL

Nominally, the Gulf war may have been about the threat to Kuwait, but it
was really fought over who (the US - or Saddam Hussein?) should control
the oilfields of the Persian Gulf Since then, the US bases in Saudi Arabia
have maintained control over the resources of the region, thereby creating
a presence on Islam's most sacred soil that made Osama bin Laden into a
deadly enemy of the US. So, oil was a background factor in the terrorist
attacks on September 11. Not coincidentally, getting rid of the Taliban
could now give the West a cheap access route to the energy resources of
Central Asia.

Oil has always driven US foreign policy, and never more so than now. The
Bush family fortune was built on oil, and top figures in the Bush
administration are spectacularly close to the oil industry. Vice-President
Dick Cheney made his fortune in the 1990s as CEO of Halliburton, the
world's largest supplier of oilfield services and the owner of Brown and
Root - a heavy construction and oil industry giant that builds offshore
oil rigs and nuclear reactors. During Cheney's tenure, Halliburton won
$US3.8 billion in government subsidies and loans. In 1998, Cheney joined
an oil lobby that wrote to President Bill Clinton urging action against
the Kyoto climate-change treaty.

Big Oil has other good friends. During the 1990s a 136,000-tonne oil
tanker called the Condoleeza Rice was named after Bush's current National
Security Adviser, in recognition of Rice's role as a director at Chevron,
an oil and gas company that operates in 25 countries, including the
Nigerian delta - where it has been accused of complicity in human-rights
abuses - and Kazakhstan. Christie Todd Whitman, head of the Enviromnent
Protection Agency, held interests in Texas and Colorado oil wells, while
Defence Secretary Donald Rumsfeld had up to $US15 million invested in
energy-related companies. During last year's US elections, oil companies
donated heavily to the Bush campaign.

As President, Bush has repaid that support. He torpedoed the Kyoto Accord
and sought to open the Alaskan wilderness for drilling. In his energy bill
passed in July, Bush skipped serious conservation measures (such as
enhanced efficiency standards) and increased the nation's reliance on
nuclear reactors for its energy needs in future. The energy bill included
a $US30 billion package of subsidies and tax breaks especially for energy
producers. On the campaign trail last year Bush had vowed to force Opec to
"open the spigot". By mid 2001, he was applauding Opec's decision to cut
production, a price-fixing measure to prop up oil prices. "It's very
important," Bush explained, "for there to be stability in the market
place." Stable low prices or stable high ones, whatever.

So much for the laws of supply and demand, and the elimination of market
distorting subsidies. As economist Paul Krugman scathingly concluded, the
Bush administration simply "suspends its principles" when it comes to the
oil industry, including its foreign policy principles. US support for
Saudi Arabia second only to Israel as a bulwark of US foreign policy -
reflects the fact that the House of Saud controls the largest oil fields
on the planet. The Bush administration like those of jimmy Carter and Bill
Clinton - has turned a blind eye to the regime's socio-religious
oppression of its citizens.

It goes further. While still CEO at Halliburton, Cheney urged the US to
improve relations with its old enemy, Iran. In August, the Bush
administration therefore signalled displeasure with Congress's
determination to renew the 1996 Iran-Libya Sanctions Act, which threatens
sanctions against foreign firms that invest in Iran's energy sector. More
important, the US has tried to pin responsibility for the World Trade
Center/Pentagon attacks solely on bin Laden and the Taliban - with nary a
harsh word from Cheney for the terror groups linked to Iran, such as
Hezbollah.

Iran happens to own an eleventh of the world's oil reserves. It is being
wooed by the US for access to those oil and gas reserves directly, or via
third-party swap deals. In addition, Iran is being belatedly seen as a
counterweight to the canny way that V1adimir Putin is leading a Russian
resurgence now evident everywhere from the Balkans to the borders of
China, and especially amid the oil- and gas-rich Caspian/Caucasus regions.
Several pipelines (from Baku to Turkey, or via Iran to the Gulf) are
competing as potential access routes for these rich reserves.

Why was the Taliban tolerated for so long? Because, until 1998, Unocal had
led a consortium planning a pipeline from Central Asia via Afghanistan to
Pakistan and out through India.

Toppling the Taliban could revive that prospect, always the cheapest
option. As the Caucasus Watch intelligence report says laconically in its
September 25 prev iew of the war against the Taliban: "Those states along
the pipeline routes that accede to American hegemony will survive. Those
that don't are in for a short, sharp future." Oil, as ever, is king.