A Secret History of the War Over Oil in Iraq

by Greg Palast (Armed Madhouse, contact@gregpalast.com)

July 5, 1990 - James Baker III, Secretary of State to George Bush, Sr., sends Saddam a diplomatic message that the United States would wink at his invasion of Kuwait: "We have no opinion on ... your border disagreement with Kuwait... The issue is not associated with America."

February 2001: Plan A - Within a month of Bush Jr.'s first inaugural, the National Security Council and State Department convene a confab in Walnut Creek, CA, to plan the invasion of Iraq. The group auditions replacement for Saddam. Host Faleh Aljibury, a top U.S. oil industry advisor on Iraq, says one plan was for "an invasion that acted like a coup... shut down for two or three days... then everything is ... as is." "As is," especially in the oil ministry, which would retain the government oil monopoly.

December 2000 -> March 2001 - James Baker III Institute and the Council on Foreign Relations, sponsored by Saudi Arabia, to map global energy plan. The bug in the soup: Saddam Hussein, who's jerking the oil markets, "posing a difficult situation for the U.S. ... requiring an immediate poly review - military, energy, economic, diplomatic." In March, Baker-CFR group member Ken lay and other industry chiefs meet secretly with Vice President Dick Cheney. They review this [a] map of Iraq's oil fields.

October 2001 -> February 2003: Plan B - Emboldened by the Sept. 11 attacks and ease of conquering Afghanistan, neo-conservatives draft their counter-plan: a yearlong occupation to re-make Iraq into a free market miracle. The 101-page secret program becomes a Christmas tree for insider lobbyists, including Grover Norquist, who help load it with corporate goodies: copyright protection for Microsoft and Sony, and the CPP ("Comprehensive Privatization Program") to sell off "all" state assets, "especially the oil."

September 2002 - The purpose of "privatizing" Iraq's oil in Plan B, "The Economy Plan," is laid out by Ari Cohen of the Heritage Foundation for neo-cons at the Pentagon: Destroy OPEC and the Saudis. Oil privatization is th ekey, "a nobrainer": abolish Iraq's state oil monopoly, sell their fields, ramp up production beyond the OPEC quota, destroy OPEC, crush oil prices, and bring Saudi Arabia to its knees. Plan B promoters: neo-cons Donald Rumsfeld, Paul Wolfowitz, Richard Perle, and Harold Rhode, boosters and members of the Project for a New American Century.

January 2003 - State Department denies its "Future of Iraq" group discusses oil. But Bush team sends Robert Ebel, former CIA and industry oil specialist, to London to meet secretly with "Future of Iraq" leader Fadhil Chalabi to discuss post-invasion oil setup. Fadhil, like his fellow tribesman Ahmad Chalabi, wannabe potentate of Iraq, joins forces with neo-cons in plan to sell off Iraq's oil fields, break up and sell its state oil company, increase production, quit OPEC. CIA industry man Ebel tells Chalabi his numbers are "ridiculous".

March 17, 2003 - President Bush broadcasts this message to Iraqi people: "Do not destroy oil wells." So begins what White Hosue spokesman Ari Fleischer terms, "Operation Iraqi Liberation" -OIL- swiftly changed to OIF: Operation Iraqi Freedom.

March 27, 2003 - Deputy Secretary of Defense Wolfowitz testifies Iraq will be free-- not "free" as in democratic, but "free" as in this-won't-cost-us-a-penny. "There's a lot of money to pay for this that doesn't have to be U.S. taxpayer money," he tells Congress, contrary to the secret analysis he receives from the CIA and Department of Energy. Was it perjury?

April 21, 2003 - Three-star general Jay Garner, appointed occupation chief by President Bush, is personally fired by Defense Secretary Rumsfield. Garner had demanded swift elections and refused to sell off Iraq's oil fields; resisting the neo-con's 101-page "Plan B" cost him his job.

May 2003 -> June 2004 - "Jerry" Bremer, Managing Director of Kissinger Associates, replaces Garner, cancels elections, and appoints a new government under the control of neo-con favorite, convicted bank swindler Ahmad Chalabi. The neo-con junta fires pro-State Department, pro-OPEC oil ministers and implements Plan B, from selling off Iraq's banks to changing copyright laws. The result: 60 percent unemployment and an "insurgency" fueled by poverty, occupation, and rumors of oil privatization.

September -> October 2003 - U.S. oil industry chiefs block oil field sell-off. Phil Carroll of Houston, ex-CEO of Shell Oil USA, arrives in May to take charge of Iraq's oil ministry; tells Bremer, privately, there would be "no privatization of Iraqi oil... end of statement." Leaving in September, he passes control to Houston buddy Bob McKee, Chairman of a Halliburton Company and former SVP of Conoco Oil. McKee orders a bullet in the head to oil privatization: a write-up of Plan A re-establishing a state oil monopoly.

November 2003 -> January 2004 - Amy Jaffe of the Jame Baker III Institute, along with oil industry experts, secretly writes up details of original "Plan A." The 323-page Options for Iraqi Oil for the State Department contains only one option: a state oil company that would "enhance (Iraq's) relationship with OPEC." Privatization and OPEC-busting are out. The neo-cons are kept in the dark about the new policy guide.

May 2004 -> March 2005 - Dick Cheney sides with Big Oil over the neo-cons. May 20: Ahmad Chalabi sought for arrest on espionage charges; his "governing council" is shuttered, replaced with "sovereign" government headed by Baathist blessed by State Department. Pentagon favorite Bremer is booted for John Negroponte, Big Oil's friend at the State Department. Wolfowitz is removed from the Pentagon. The Council on Foreign Relations rejoices, "The realists have defeated fantasists!" Pro-OPEC Baathists fired by Bremer and Chalabi now return to run oil ministry and establish a state oil monopoly. OPEC is saved. Oil prices bust over $50 a barrel and reserves of top five oil companies increase in value by over $2 trillion.

February 2005 and beyond - The whell turns again. Negroponte replaced as U.S. viceroy for Iraq by neo-con PNAC favorite Zalmay Kalilzad. Chalabi return sto power with Shi'ites, names himself temporary oil minister, fires Big Oil's favorites- but does not dare privatize oil fields or bust OPEC. Crude rises to over $60 a barrel.