06/25/14 – Michael Schwartz – The Scott Horton Show

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Jason Ditz is going to be on the show to talk about Israel a little bit later.
And then also, as I said, Darja Mail and Marcy Wheeler.
But first up today is Michael Schwartz.
And he's the author of a great book called War Without End about the Iraq War that was published back in, I don't know, six or seven or something like that.
And he's regular at TomDispatch.com.
And he's got this new article at TomDispatch from two days ago.
It's running today on AntiWar.com as well.
It's called The New Oil Wars in Iraq.
And it's not some no blood for oil type thing.
So don't get ahead of yourself shaking your head and rolling your eyes.
This is important.
Welcome to the show, Michael.
How are you doing?
Thanks.
It's great to be back.
Very good to have you back on the show.
It's been way too long since we've spoken.
And of course, I can tell, I forget now it's been so long, but I can tell from this article that you certainly understand all the wide and varied reasons for the Iraq War far beyond just, you know, kind of the mantra that, well, Houston just wanted to steal all the oil away or that kind of thing.
Although whatever role that had in it, I'm happy to let you explain.
I think that's a very interesting conversation in itself.
But what this article is mostly about, and we've got time, what this article is mostly about is what role the oil plays and the oil money plays in the current conflict.
And of course, it's incredibly significant.
So I guess, first of all, would you like to address what role oil had in the American intervention over there in the first place back?
Well, not the first place.
I guess the third place back in 2000.
Yeah.
Well, I mean, you know, everything is a long story.
It's hard to make it short, but you know, the geopolitics of what in those days was called the arc of instability, at least by the American administration.
If you look at what the arc of instability was, it was the also the arc of where the oil in the world was.
80% of the usable reserves and the United States, like every other big power, had been trying to maneuver themselves into important positions in those areas for decades.
Yeah, it's going on a century now, but in those decades in the 90s, and Iraq became the central kind of place, the target, especially during the oil crisis in the 1990s, where it became the axial place, and all of the accoutrements around Saddam Hussein as a, not just as a vicious dictator, which didn't seem to bother the American administration's much at all for most of the time, but rather as a kind of what they called a rogue, you know, who had designed on Kuwait's oil and in various ways was a, you know, a wild card in the situation.
And all this became focused way before 2001, really, in 1998 was the first sort of open call by, you know, high-level politicos for a US military invasion of Iraq, a demand that Clinton responded to by initiating an air war against Iraq that was one of these quiet wars that nobody ever really reported on, and did a lot, a lot of damage.
And of course, there were the sanctions against Iraq all during that period, which themselves did a lot of damage.
So when 2001 comes, the key people in the Bush administration, Cheney and Rumsfeld would be probably the most critical of them, you know, immediately became focused on Iraq and said, you know, we needed to go in there and get control of this guy and get not control of the oil in the traditional sense, grab their oil and take it home, but rather in control of the oil in a less traditional sense, which is what got to be called the control of the spigot, which is that the amount of production in Iraq should be jacked up tremendously.
And they have incredible reserves there.
They might even have more reserves than Saudi Arabia.
And so the idea would be, hey, you could kill three birds with one stone here.
We can go in there.
We can get rid of this rogue guy that we don't, you know, really is not part of the Americans, what's called sphere of influence the way that Saudi Arabia was.
We can put a huge amount of pressure on Iran, which was kind of sworn enemy and we can break OPEC into the bargain because what we'll do is we'll just take all the oil fields in Iraq.
We'll ship them out to various production companies and jack up the oil production from 2,500, 1,500 to 6,500 barrels per day.
And ultimately in their view, the chance, it was a real possibility of getting up to 12,500 per day and bring the price of oil down to about $20 a barrel.
At that time, it was about 60.
Now it's 90.
I don't know 100 and hasn't really been low ever since, which gives you a sense that that part of the goal was certainly not ever achieved.
Well, now, let me ask you about that because it's Greg Palast reporting that what happened there, what you're describing is the neocon plan as Elliot Cohen and others described it as they wrote it up at the Heritage Institute to, like you're saying, break Saudi control of OPEC and all that by dumping the price down to the floor.
But then the way Palast has it is that finally James Baker got his way and said, oh, hell no.
And in this funny, right?
It's the former Trotskyite neoconservatives.
They want to privatize all the oil and the lawyer for all the capitalists back in Houston comes and says, oh, hell no.
We're going to make this same as always national Iraqi government oil company and they're going to control it all and they're going to keep this oil off the market and the price artificially high because we like the Saudis and OPEC because they always get along really well and work with Houston anyway.
And so that was where I think the way Palast had it where the Bakerites won over the neocons on that point back in 03 or 04.
Yeah, I think that I mean, you know, Greg and I have read the same documents from the Baker Institute and I have a slightly different reading of it all that but the plan that the Bakerites came out with which would they try to implement was to leave the oil the national oil production in the hands of the National Oil Company of Iraq, but to have all sorts of new exploration in Iraq because there's the belief of the geologist is that they have 450 billion barrels of oil a lot of it under Anbar province and that exploration would be given the International Oil Company and that the International Oil Companies would of course regulate production according to their market needs and so both interests would be served at the same time, but it would also give the US or rather the international, let's call it the international community because of course Europe had to be a partner in this would be able to have another turn of the spigot especially in light of the fact that the rate of increase of oil consumption was going up so dramatically that it was clear that the Saudis could not actually match the production levels that might be needed.
So the Baker idea was to have a sort of half of both one was not to not to keep them at 2.5 million barrels per day, but to get them up to about 4.5 million barrels per day, but then start really doing the exploration.
So the oil piece underneath, right, was moving along, but of course all these plans, you know, the neocons were far more ambitious and far more unrealistic because they really thought they were going to jack up production right away, pay for them and use the increased revenues to pay for the war, which they thought would only cost 40 billion dollars but even when they figured out it might cost a hundred billion dollars, they still thought they could pay for it with the oil.
Right.
All right.
Now we got to hold it right there Michael and go out to this break.
It's Michael Schwartz there, but he's author of the great book about the Iraq war, War Without End, got that right?
And he's at TomDispatch.com and Antiwar.com today.
Be right back.
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All right.
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We're back.
It's the show.
I'm Scott Horton.
This is my show, The Scott Horton Show.
Scott Horton.org is the website.
Talking with Michael Schwartz, author of War Without End, and this piece at Antiwar.com today, The New Oil Wars in Iraq.
And now a couple of things to get started on this segment.
Michael, first of all, I believe I learned from Juan Cole, who you cite in another context in this article, I think.
Well, in a slightly different context in this article.
I believe he said years ago, and I don't guess I ever really double checked this, that under the predominantly majority Sunni parts of Iraq, there's really no oil.
It's all up in the Kurdish region around Kirkuk and down near Basra and that this was, I think he started telling me this back in 2004.
This is one of the reasons that the Sunnis were absolutely fighting like hell to hold on to the state and hold on to the capital city against the assault of the U.S. Army and the Bata Brigade.
You tell me who was working for who in that one.
But anyway, and so, but now you just told me that the Baker Commission, or not the Baker Commission, but that's a different thing, the James Baker group, whatever, they had determined that they, or the geologists thought that there really was a ton of oil under Anbar.
It just wasn't developed.
Is that it?
That's what they think.
Yeah, they do think so.
And there's a lot of intrigue involved in that because if you look at the oil geography, what Anbar, which is the key Sunni province, but other surrounding provinces around there, which are also majority Sunni, there's no oil, not none, that would be a complete exaggeration.
There's, I think, 5% of the oil that's pumped currently in Iraq is in what the United States called the Sunni Triangle, the area of the country outside of Baghdad that is predominantly Sunni.
5%, 95% are, about 80% is pumped in the Shia areas in the south around Basra, and the other 15% is pumped in Kirkuk, which is just outside of the Kurdish areas in which the Kurds claim, and inside the Kurdish areas.
So there's very little oil being pumped there.
The geologists say that the actual reserves of Iraq may be twice or 150 times the size of the current reserves that are proven, and that the bulk of those new reserves may well be under Anbar.
So if they ever do develop the oil, it may turn out that the Sunnis are very oil-rich.
However, all that would be in the future, in the current situation.
There is plenty of oil around the Sunni areas, and that's very very important.
The main internal refinery is in a town called Baiji, and that's in a Sunni area.
The pipeline, the only pipeline that leaves the country, goes through Anbar province.
The rest of the oil leaves the country through the port in Basra.
The Kurds are trying to organize export directly out of Kurdistan, and that's another source of tremendous tension in the country because the Maliki government doesn't want them to have that independent source, because then they would lose control of the oil in Kurdistan areas.
But there's another refinery there.
There's some small oil fields there.
And so the people of the Sunni areas, number one, see the oil as a national treasure, not as regional treasures to start with.
And secondly, they see their part of it as something that certainly they should have some share of.
So this has been going on for decades.
Back under Saddam Hussein, for example, when the Sunnis were the favored group, because Saddam himself, it was a Sunni regime.
And while there was tremendous oppression of the Kurds and tremendous discrimination against Shia in that regime, the people in the Sunni areas were also deprived of many of the resources that the country should have had, yet not as bad as the other places, and they were protesting themselves and demanding more of the oil revenues that were financing the government.
I mean, their government is not like the governments in Europe and so on, which, you know, uses taxes as their revenue.
These governments in the Middle East that are oil-rich, revenues of the Iraqi government have traditionally been over 95% just from the oil.
And so they take all that revenue.
The national government has all that revenue, right?
And the question is, who's going to get what?
And that is really the origins of this latest crisis, because when the Maliki regime took power in the United States, removed itself, and the oil production began to increase, and the billions of dollars started flowing into the Maliki government that were presumably going to be used for rebuilding the country.
Somehow this money disappeared.
It didn't go anywhere.
And, well, it went into probably quite a few Swiss banks.
I mean, nobody has tracked all of it.
The American contractors, while the US was there, were getting billions and billions and billions of dollars for doing virtually nothing.
I mean, there's one atrocity story after another around that.
But once the US left, everybody in the country expected to see the country start to rebuild quite rapidly.
And it hasn't happened.
But what really hasn't happened is that in the Sunni areas, they've seen nothing.
In fact, they've seen continued decline.
And so that's really the origin of this current crisis, because the people of these areas began protesting in various forms.
You think of a protest, and they've done it.
They elected local governments.
They elected provincial governments who made demands that, you know, rebuilding be done, that the roads be fixed, that they stop having power only two hours a day, that new facilities be there, or that the facilities that existed spread the electricity more efficiently, that the agricultural areas that were devastated be rebuilt, that the water in the rivers stop being polluted because the pollution coming in from upstream was destroying the fishing industry and the agricultural industry.
I mean, these demands were made everywhere.
And in the Sunni areas, the demands became more and more and more insistent.
And eventually what Maliki decided was he really had to suppress this.
And in the big high-profile moment, which is three years old now, he actually arrested one of the vice presidents, or didn't arrest him.
He indicted one of the vice presidents, the Sunni vice presidents, for terrorism because he was one of the point people for demanding that the oil revenues be shipped into the Sunni areas for rehabilitation and for jobs, government jobs, etc.
And he's now a refugee from Maliki being harbored by the Kurds.
And he busted a lot of other Sunni leaders, and then the political leaders that were Sunni leaders started making themselves scarce.
And so the protests moved into protests on the street.
And then, of course, there started to be guerrilla war.
And when that happened, Maliki shipped his army into the areas.
And we're talking about a maturation of about a two-year process of armed struggle there, into which this group that's called ISIS or ISIL, they still call it Al-Qaeda, even though they've broken with Al-Qaeda.
This group is now one of the constituent parts.
The American media tends to make them the only important actor, but they aren't not the most important actor.
They are one of many parts, and they certainly are a vicious, horrible group who have ambitions to be really murderous.
But they are often constrained by their allies and by the local guerrillas.
Those have followed things closely.
A lot of the local people are part of what the United States called the Sunni awakening, which was a group of insurgents who, from the American point of view, switched sides.
That is, they were fighting the Americans, and they made a deal with the Americans to expel the jihadists.
But the deal also included that the U.S. would withdraw their troops from Sunni communities all over Anbar and keep them in the bases.
And so what it in effect was that the insurgents in those areas then had control of local politics, and that was the sort of consequences of the Sunni awakening.
But when Maliki came into power, he basically cut off the fun to all those groups so that those groups were no longer being funded out of the oil revenues.
And so they have now turned back into insurgents, and they're really the backbone of what's going on.
And when you read in the paper that there are Ba'athists involved, yes, because they have been involved all along.
So now we're caught up.
That's where we are today.
I'm sorry.
We're all out of time.
And thank you so much for getting us caught up, Michael.
I appreciate it.
Okay.
Yeah, that's good stuff.
You know, and stay tuned.
Stay tuned.
There's much more to come, unfortunately.
That's Michael Schwartz.
He's at Antiwar.com today, the new oil wars in Iraq.
Hey, Al Scott Horton here.
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