CSM: If oil was the question, war wasn't the answer

[dooner]

By David R. Francis
Christian Science Monitor, Oct 3

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Another complication is Iraq's draft constitution. It was stapled together in August and is subject to a referendum on Oct. 15. It calls for Iraq's federal government to manage existing oil fields in cooperation with the regions, sharing oil revenues. But any oil fields not yet in production will be the sole responsibility of the region in which they may be found.

If Iraq becomes a loose federation, foreign oil companies probably will negotiate with regional governments, not the central one. Some speculate that a Kurdish regime in the north might welcome American oil firms. But in the Shiite area in the south, where two-thirds of current oil reserves are located, the provincial government or governments might prefer to deal with Chinese, French, or other non-American oil firms. The influence of Iran's Shiite government is already considered substantial in southern Iraq.

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American senior policymakers have long seen military force as an effective way to ensure a supply of Middle East oil, holds Michael Klare, a professor of peace and world security studies at Hampshire College in Amherst, Mass. Oil is seen as a source of power. The United States is expected to retain permanent military bases in Iraq even if the insurgency dies down.

In August 2002, Vice President Dick Cheney listed the need to retain control over Gulf oil supplies as one reason to topple Saddam Hussein.

"Whoever controls Iraq's oil controls Iraq's destiny," says Dr. A.F. Alhajji, an oil economist at Ohio Northern University. Oil revenues kept Saddam in power. But if Iraq becomes heavily dependent on oil revenues, he wonders, would this support democracy or tempt another Saddam to sneak into power? And if it is a democracy, he figures the government will squeeze foreign oil firms for the bulk of their revenues. "An Iraqi democratic government will not give its oil away," he says. Oil firms usually enjoy "more lucrative" profits in nations run by dictators.

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