Windfalls of War
The Economic Winners in a Conflict with Iraq
Who will be the benefactors of any war on Iraq ?
The winners are all about past relationships. And where President George W. Bush’s administration is concerned, those past relationships are measured in barrels of crude oil.
Take Condoleezza Rice , our nation’s current National Security Advisor. Rice owns the distinction of being the only cabinet member ever to have an oil tanker named after her. This honor comes from her spending a decade on the board of the Chevron Corporation . Such close relationships between the senior staff in the Bush administration and the oil industry are a hallmark of G.W.’s presidency.
Big oil interests will reap the benefits of war. And taxpayers will pay for their gains. Why? Because Iraq reads like an economic strategist’s dream. Iraq possesses the world’s second largest proven oil reserves, and is on par with Saudi Arabia for future capacity for oil production. However, unlike Saudi Arabia , most of Iraq’s major oil fields remain unexplored. The country’s oil is also considered to be of very high quality, with Iraq one of the least expensive places in the world to produce oil. Logic would suggest that whoever controls these large oil reserves will exert a large influence over global energy markets for years to come. Isn’t that reason enough for war?
The facts and numbers stating the case for oil as the major reason for war are overwhelming, especially when compared to the fuzzy theories about Iraq being poised to destroy legions with weapons of mass destruction.
It’s all about past relationships. One of the companies that stands to benefit in the new, postwar Iraq is, ironically, Condoleezza’s old stomping ground�Chevron. In a speech given at San Francisco’s Commonwealth Club in 1998, Chevron CEO Kenneth T. Derr said, “Iraq possesses huge oil reserves of oil and gas�reserves I’d love Chevron to have access to.” If the U.S. wins a war with Iraq (isn’t winning a war a foregone conclusion?) and installs a U.S.-friendly government, the winners will be companies like Chevron, Exxon, Shell, and British Petroleum.
The losers, who are no saints, would likely be: Russia’s Lukoil, China’s National Petroleum and France’s Fina�all companies that have held contract talks with Iraq during the sanction-filled 1990’s. The Iraqi National Congress �a major dissident group backed by the U.S.�has already stated that all previous oil contracts will be null and void after Saddam Hussein is removed from power. And to that they’ve added that any country who refuses to join a coalition action will be low on the list of contract awards under a new regime. It’s all about past relationships.
But perhaps the biggest loser will be the American taxpayer of modest means. This segment of the population has probably paid a disproportionate share of the cost of U.S. wars over the last fifty years-and will continue to do so. Ask any tax lawyer. If you think all of this is rhetoric, then ask yourself this one question: when was the last time an oil company named an oil tanker after someone like you and me?