It's not about oil - maybe it is; no one is completely sure. Now that it doesn't even matter why we went to war in the first place, it's important to examine what is going to happen to Iraq, which is a billion-dollar resource. President George W. Bush has claimed the money will go back to the Iraqi people, but he has since retracted that idea and stated the money will go towards reconstruction costs at the hands of U.S. companies. The flow is very complex, and examining it will take us on a trip across the world.
If the oil money was actually going to go to the people, then one need look no further than Venezuela for a quick how-to. President Hugo Chavez has reformed the state oil company, Petroleos de Venezuela S.A. (PDVSA), to foster left-wing values. Oil revenues create 50 percent of the country's revenue, and all the workers are committed to ending the poverty within the country. This is not complete Marxism, merely social democratic reform that would have fit in perfectly with John F. Kennedy's "Alliance for Progress." And although it is an ongoing process, the early returns have been positive. The country is exporting more oil, and the disbursement of revenue has recognized no class boundaries. Unfortunately, there is one problem with their design - the United States fought tooth and nail to make sure it never got off the ground.
I'll spare you the details of the myriad failed attempts at a coup, but it involves Chavez bucking the International Monetary Fund (IMF) and the World Bank, and refusing to allow American oil companies to make exorbitant amounts of money at the expense of his country's vast oil fields. It also involves the Organization of Petroleum Exporting Companies, where a Venezuelan sits as Secretary General on the board with 10 other countries that dictate oil flow to the United States. Historically, Venezuela's role has been very helpful to the United States, as we get much of our oil from that nation, and they raised production when the Arab nations threatened to boycott. Chavez has done more to rebuild OPEC than anyone, and he has used wanton American consumerism to benefit his native Venezuela.
Because of price controls and sales quotas, OPEC has a firm grip on the throat of America's oil consumption; in turn, this translates into dollars for large oil companies. American involvement in Venezuela can be related back to control of OPEC, but when it failed, the American government, on behalf of the oil companies, needed a new target. While the Iraqi rhetoric had already been growing strong - and a month earlier, Bush reportedly told advisors, "F--- Saddam, we're taking him out" - it is essential to note how both oil-related actions were decided upon in the same time period.
Controlling a government that has a seat with OPEC helps in a variety of ways in both the nature of the contract that can be granted to oil companies and the amount of oil that can be produced. If this war were about oil, Bush would immediately try to negotiate a productions contract where American oil companies get more revenue than the country and then try to increase production, which in turn hurts the Arab countries and allows the American oil companies to siphon more oil. That, of course, would come after all oil-related sites in the country were secured.
Negotiating with OPEC is very difficult and would be near impossible for anyone perceived to be an American puppet. Also, these countries are fearful that rogue parties might control Iraqi oil and sell it outside of OPEC's guidelines. Since Bush has to keep Iraq in OPEC, all oil production must follow OPEC's laws. When American companies move in to repair or control oil wells, the project could also fall under the IMF's control regarding financial aid and recovery. Although there has been a lot of talk about not repaying France, Germany or Russia, recognizing that the head of the IMF is James Wolfensohn, a German, that prospect doesn't seem very likely.
This leaves us all with an interesting question. There are billions of dollars' worth of oil, and almost as many places where that money could go. The IMF says the money should cover foreign debt, while Bush says the money should go towards universal health care, public utilities and schools for the newly liberated Iraqi people. In reality, however, Bush's actions show he wants the money to go to American companies, all of which have ties to members of his administration and have donated millions of dollars to their coffers. If this war was about freedom, option two would clearly be the choice, but as seen in Venezuela, this is clearly not Bush's intent.
And how does all of this affect you? Well, aside from the ethical and electoral questions that come into effect every November, this issue becomes visible every time you fill your car with gasoline. Since so much money can be made, politicians are unwilling to cut elusive ties to the industry that will forcefully raise efficiency standards. While the lines aren't clear yet, the time may come where every time you fill up, you may be deciding between putting money in the pocket of a politician versus sending it to feed a family. If this war wasn't about oil, they sure fooled me.
Photo: Courtesy of Laron Fomby
