News Release

Oil: The Heart of the Crisis?


Coauthor of the new book Target Iraq, Erlich said today: “While the U.S. government and media say oil is an important factor influencing other countries, such as France and Russia, they rarely acknowledge oil as a motivating factor for U.S. policy…. If a pro-U.S. regime privatizes Iraqi oil, then U.S. companies would stand to make billions of dollars by dividing up the industry. This would give U.S. corporate interests substantially more power over the global oil flow and the global economy.”

Currently in New York City, Renner is author of the report “Post-Saddam Iraq: Linchpin of a New Oil Order,” and is a senior researcher at Worldwatch Institute and a policy analyst for Foreign Policy In Focus. He said today: “The Bush administration’s ties to the oil and gas industry are pervasive. Bush and Cheney both have deep roots in this industry…. At 112 billion barrels, Iraq’s proven reserves are second only to Saudi Arabia’s, and may well rival Saudi reserves. If a new regime in Baghdad rolls out the red carpet for the oil multinationals to return, it is possible that a broader wave of denationalization could sweep through the oil industry, reversing the historic changes of the early 1970s, dealing a major blow to OPEC and ensuring that Iraq would be a major lever against Saudi Arabia. Such a course of action would also re-commit the world economy to a fuel that is a major culprit in global climate change. It flies in the face of rapidly-growing wind and solar energy industries and efforts to implement the Kyoto protocol on climate protection.”
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Executive director of the Global Policy Forum, which monitors policy-making at the United Nations, Paul said today: “Given that past U.S. and U.K. charges against Iraq have been proven false by the inspectors and that Powell’s speech did not sway many at the U.N., the administration does not have a great deal of credibility at the United Nations. However, it is using its power, particularly the prospect of dividing up Iraq’s oil wealth among the other powers, to get other countries to go along with its planned invasion.” Paul, who wrote the recent report “Oil in Iraq: The Heart of the Crisis,” added: “Iraq not only has huge oil supplies, but it has very cheap extraction costs, as little as $1 per barrel (in Texas it can cost as much as $20 per barrel), so the profit margins are enormous. A U.S. client government in Baghdad — or a U.S. military occupation government — would doubtlessly hand out upstream production concessions to U.S.-U.K. companies that would set an important precedent in the world oil industry, tipping the balance of power in favor of the companies and away from the producer states. In this way, the war against Iraq would have an effect on the oil industry that would go far beyond the borders of Iraq. While ‘access’ to oil is historically an issue for the Pentagon during wartime, the issue is not really about ‘access’ to oil in terms of people having gas for their SUVs — Iraq and other producer states want to sell the oil, not keep it in the ground. Rather, the issue is primarily about private corporate control by the big oil companies over price, production and profits in the world’s most important industry.”
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167