[Mb-civic] Tomgram: Michael Klare on Blood, Oil, and Iran

Tue Apr 12 13:03:44 PDT 2005

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Tomgram: Michael Klare on Blood, Oil, and Iran

This post can be found at http://www.tomdispatch.com/index.mhtml?pid=2312

While our media is filled with stories on the Bush administration and Iran,
they almost invariably focus on the Iranian nuclear program (or European
negotiations and U.S. non-negotiations about the same). You could read our
press for weeks at a time -- if you didn't stray onto the business pages --
and not be aware that Iran sits on a sea of oil and natural gas. In fact, I
don't think it's an exaggeration to say that, for long stretches, a typical
newspaper reader or prime-time TV news viewer, or, for that matter, an NPR
listener, would have just about no way of knowing that our world runs on
oil. Of course, our local gas stations are informative enough on the subject
these days, so this reality is lost on few people. Still, the sort of piece
that hit the front page of the British Financial Times the other day -- IMF
warns on risk of Œpermanent oil shock' -- is not normally a front-page
commonplace for us.

This has a certain importance when, in the British and Israeli press and on
the Internet, rumors and reports abound that either the Bush administration
or the Israeli government (in coordination with Bush officials) or both are
planning air attacks on Iranian nuclear facilities as early as this June
(with hopes of an oil-regime change in Tehran); or when the Washington Post
reports on months of Iranian air-space infringement and air-defense testing
on the part of American unmanned aircraft, and Seymour Hersh reports on
American Special Forces (or Kurdish agents) moving in and out of Iran, again
possibly in preparation for future attacks. (By the way, an interesting
counter-argument against the likelihood of an Israeli attack on Iran
appeared in the Asia Times recently.)

It's strange that, when it comes to news articles on Iran, oil plays just
about no role whatsoever; that, as was true with Iraq before the invasion of
2003, it is little short of a taboo subject. Fortunately, we have Michael
Klare, whose book Blood and Oil: The Dangers and Consequences of America's
Growing Dependency on Imported Oil (as I've said before) is an indispensable
volume for understanding our moment. Below, Klare does what should be done
in our mainstream press -- he seriously considers the role of Iran's oil and
natural gas reserves, and other energy-related matters in the Bush
administration's Iran planning. Tom

    Oil, Geopolitics, and the Coming War with Iran
    By Michael T. Klare

    As the United States gears up for an attack on Iran, one thing is
certain: the Bush administration will never mention oil as a reason for
going to war. As in the case of Iraq, weapons of mass destruction (WMD) will
be cited as the principal justification for an American assault. "We will
not tolerate the construction of a nuclear weapon [by Iran]," is the way
President Bush put it in a much-quoted 2003 statement. But just as the
failure to discover illicit weapons in Iraq undermined the administration's
use of WMD as the paramount reason for its invasion, so its claim that an
attack on Iran would be justified because of its alleged nuclear potential
should invite widespread skepticism. More important, any serious assessment
of Iran's strategic importance to the United States should focus on its role
in the global energy equation.

    Before proceeding further, let me state for the record that I do not
claim oil is the sole driving force behind the Bush administration's
apparent determination to destroy Iranian military capabilities. No doubt
there are many national security professionals in Washington who are truly
worried about Iran's nuclear program, just as there were many professionals
who were genuinely worried about Iraqi weapons capabilities. I respect this.
But no war is ever prompted by one factor alone, and it is evident from the
public record that many considerations, including oil, played a role in the
administration's decision to invade Iraq. Likewise, it is reasonable to
assume that many factors -- again including oil -- are playing a role in the
decision-making now underway over a possible assault on Iran.

    Just exactly how much weight the oil factor carries in the
administration's decision-making is not something that we can determine with
absolute assurance at this time, but given the importance energy has played
in the careers and thinking of various high officials of this
administration, and given Iran's immense resources, it would be ludicrous
not to take the oil factor into account -- and yet you can rest assured
that, as relations with Iran worsen, American media reports and analysis of
the situation will generally steer a course well clear of the subject (as
they did in the lead-up to the invasion of Iraq).

    One further caveat: When talking about oil's importance in American
strategic thinking about Iran, it is important to go beyond the obvious
question of Iran's potential role in satisfying our country's future energy
requirements. Because Iran occupies a strategic location on the north side
of the Persian Gulf, it is in a position to threaten oil fields in Saudi
Arabia, Kuwait, Iraq, and the United Arab Emirates, which together possess
more than half of the world's known oil reserves. Iran also sits athwart the
Strait of Hormuz, the narrow waterway through which, daily, 40% of the
world's oil exports pass. In addition, Iran is becoming a major supplier of
oil and natural gas to China, India, and Japan, thereby giving Tehran
additional clout in world affairs. It is these geopolitical dimensions of
energy, as much as Iran's potential to export significant quantities of oil
to the United States, that undoubtedly govern the administration's strategic
calculations.

    Having said this, let me proceed to an assessment of Iran's future
energy potential. According to the most recent tally by Oil and Gas Journal,
Iran houses the second-largest pool of untapped petroleum in the world, an
estimated 125.8 billion barrels. Only Saudi Arabia, with an estimated 260
billion barrels, possesses more; Iraq, the third in line, has an estimated
115 billion barrels. With this much oil -- about one-tenth of the world's
estimated total supply -- Iran is certain to play a key role in the global
energy equation, no matter what else occurs.

    It is not, however, just sheer quantity that matters in Iran's case; no
less important is its future productive capacity. Although Saudi Arabia
possesses larger reserves, it is now producing oil at close to its maximum
sustainable rate (about 10 million barrels per day). It will probably be
unable to raise its output significantly over the next 20 years while global
demand, pushed by significantly higher consumption in the United States,
China, and India, is expected to rise by 50%. Iran, on the other hand, has
considerable growth potential: it is now producing about 4 million barrels
per day, but is thought to be capable of boosting its output by another 3
million barrels or so. Few, if any, other countries possess this potential,
so Iran's importance as a producer, already significant, is bound to grow in
the years ahead.

    And it is not just oil that Iran possesses in great abundance, but also
natural gas. According to Oil and Gas Journal, Iran has an estimated 940
trillion cubic feet of gas, or approximately 16% of total world reserves.
(Only Russia, with 1,680 trillion cubic feet, has a larger supply.) As it
takes approximately 6,000 cubic feet of gas to equal the energy content of 1
barrel of oil, Iran's gas reserves represent the equivalent of about 155
billion barrels of oil. This, in turn, means that its combined hydrocarbon
reserves are the equivalent of some 280 billion barrels of oil, just
slightly behind Saudi Arabia's combined supply. At present, Iran is
producing only a small share of its gas reserves, about 2.7 trillion cubic
feet per year. This means that Iran is one of the few countries capable of
supplying much larger amounts of natural gas in the future.

    What all this means is that Iran will play a critical role in the
world's future energy equation. This is especially true because the global
demand for natural gas is growing faster than that for any other source of
energy, including oil. While the world currently consumes more oil than gas,
the supply of petroleum is expected to contract in the not-too-distant
future as global production approaches its peak sustainable level -- perhaps
as soon as 2010 -- and then begins a gradual but irreversible decline. The
production of natural gas, on the other hand, is not likely to peak until
several decades from now, and so is expected to take up much of the slack
when oil supplies become less abundant. Natural gas is also considered a
more attractive fuel than oil in many applications, especially because when
consumed it releases less carbon dioxide (a major contributor to the
greenhouse effect).

    No doubt the major U.S. energy companies would love to be working with
Iran today in developing these vast oil and gas supplies. At present,
however, they are prohibited from doing so by Executive Order (EO) 12959,
signed by President Clinton in 1995 and renewed by President Bush in March
2004. The United States has also threatened to punish foreign firms that do
business in Iran (under the Iran-Libya Sanctions Act of 1996), but this has
not deterred many large companies from seeking access to Iran's reserves.
China, which will need vast amounts of additional oil and gas to fuel its
red-hot economy, is paying particular attention to Iran. According to the
Department of Energy (DoE), Iran supplied 14% of China's oil imports in
2003, and is expected to provide an even larger share in the future. China
is also expected to rely on Iran for a large share of its liquid natural gas
(LNG) imports. In October 2004, Iran signed a $100 billion, 25-year contract
with Sinopec, a major Chinese energy firm, for joint development of one of
its major gas fields and the subsequent delivery of LNG to China. If this
deal is fully consummated, it will constitute one of China's biggest
overseas investments and represent a major strategic linkage between the two
countries.

    India is also keen to obtain oil and gas from Iran. In January, the Gas
Authority of India Ltd. (GAIL) signed a 30-year deal with the National
Iranian Gas Export Corp. for the transfer of as much as 7.5 million tons of
LNG to India per year. The deal, worth an estimated $50 billion, will also
entail Indian involvement in the development of Iranian gas fields. Even
more noteworthy, Indian and Pakistani officials are discussing the
construction of a $3 billion natural gas pipeline from Iran to India via
Pakistan ¬ an extraordinary step for two long-term adversaries. If
completed, the pipeline would provide both countries with a substantial
supply of gas and allow Pakistan to reap $200-$500 million per year in
transit fees. "The gas pipeline is a win-win proposition for Iran, India,
and Pakistan," Pakistani Prime Minister Shaukat Aziz declared in January.

    Despite the pipeline's obvious attractiveness as an incentive for
reconciliation between India and Pakistan -- nuclear powers that have fought
three wars over Kashmir since 1947 and remain deadlocked over the future
status of that troubled territory -- the project was condemned by Secretary
of State Condoleezza Rice during a recent trip to India. "We have
communicated to the Indian government our concerns about the gas pipeline
cooperation between Iran and India," she said on March 16 after meeting with
Indian Foreign Minister Natwar Singh in New Delhi. The administration has,
in fact, proved unwilling to back any project that offers an economic
benefit to Iran. This has not, however, deterred India from proceeding with
the pipeline.

    Japan has also broken ranks with Washington on the issue of energy ties
with Iran. In early 2003, a consortium of three Japanese companies acquired
a 20% stake in the development of the Soroush-Nowruz offshore field in the
Persian Gulf, a reservoir thought to hold 1 billion barrels of oil. One year
later, the Iranian Offshore Oil Company awarded a $1.26 billion contract to
Japan's JGC Corporation for the recovery of natural gas and natural gas
liquids from Soroush-Nowruz and other offshore fields.

    When considering Iran's role in the global energy equation, therefore,
Bush administration officials have two key strategic aims: a desire to open
up Iranian oil and gas fields to exploitation by American firms, and concern
over Iran's growing ties to America's competitors in the global energy
market. Under U.S. law, the first of these aims can only be achieved after
the President lifts EO 12959, and this is not likely to occur as long as
Iran is controlled by anti-American mullahs and refuses to abandon its
uranium enrichment activities with potential bomb-making applications.
Likewise, the ban on U.S. involvement in Iranian energy production and
export gives Tehran no choice but to pursue ties with other consuming
nations. From the Bush administration's point of view, there is only one
obvious and immediate way to alter this unappetizing landscape -- by
inducing "regime change" in Iran and replacing the existing leadership with
one far friendlier to U.S. strategic interests.

    That the Bush administration seeks to foster regime change in Iran is
not in any doubt. The very fact that Iran was included with Saddam's Iraq
and Kim Jong Il's North Korea in the "Axis of Evil" in the President's 2002
State of the Union Address was an unmistakable indicator of this. Bush let
his feelings be known again in June 2003, at a time when there were
anti-government protests by students in Tehran. "This is the beginning of
people expressing themselves toward a free Iran, which I think is positive,"
he declared. In a more significant indication of White House attitudes on
the subject, the Department of Defense has failed to fully disarm the
People's Mujaheddin of Iran (or Mujaheddin-e Khalq, MEK), an anti-government
militia now based in Iraq that has conducted terrorist actions in Iran and
is listed on the State Department's roster of terrorist organizations. In
2003, the Washington Post reported that some senior administration figures
would like to use the MEK as a proxy force in Iran, in the same manner that
the Northern Alliance was employed against the Taliban in Afghanistan.

    The Iranian leadership is well aware that it faces a serious threat from
the Bush administration and is no doubt taking whatever steps it can to
prevent such an attack. Here, too, oil is a major factor in both Tehran's
and Washington's calculations. To deter a possible American assault, Iran
has threatened to close the Strait of Hormuz and otherwise obstruct oil
shipping in the Persian Gulf area. "An attack on Iran will be tantamount to
endangering Saudi Arabia, Kuwait, and, in a word, the entire Middle East
oil," Iranian Expediency Council secretary Mohsen Rezai said on March 1st.

    Such threats are taken very seriously by the U.S. Department of Defense.
"We judge Iran can briefly close the Strait of Hormuz, relying on a layered
strategy using predominantly naval, air, and some ground forces," Vice
Admiral Lowell E. Jacoby, the director of the Defense Intelligence Agency,
testified before the Senate Intelligence Committee on February 16th.

    Planning for such attacks is, beyond doubt, a major priority for top
Pentagon officials. In January, veteran investigative reporter Seymour Hersh
reported in the New Yorker magazine that the Department of Defense was
conducting covert reconnaissance raids into Iran, supposedly to identify
hidden Iranian nuclear and missile facilities that could be struck in future
air and missile attacks. "I was repeatedly told that the next strategic
target was Iran," Hersh said of his interviews with senior military
personnel. Shortly thereafter, the Washington Post revealed that the
Pentagon was flying surveillance drones over Iran to verify the location of
weapons sites and to test Iranian air defenses. As noted by the Post,
"Aerial espionage [of this sort] is standard in military preparations for an
eventual air attack." There have also been reports of talks between U.S. and
Israeli officials about a possible Israeli strike on Iranian weapons
facilities, presumably with behind-the-scenes assistance from the United
States.

    In reality, much of Washington's concern about Iran's pursuit of WMD and
ballistic missiles is sparked by fears for the safety of Saudi Arabia,
Kuwait, Iraq, other Persian Gulf oil producers, and Israel rather than by
fears of a direct Iranian assault on the United States. "Tehran has the only
military in the region that can threaten its neighbors and Gulf security,"
Jacoby declared in his February testimony. "Its expanding ballistic missile
inventory presents a potential threat to states in the region." It is this
regional threat that American leaders are most determined to eliminate.

    In this sense, more than any other, the current planning for an attack
on Iran is fundamentally driven by concern over the safety of U.S. energy
supplies, as was the 2003 U.S. invasion of Iraq. In the most telling
expression of White House motives for going to war against Iraq, Vice
President Dick Cheney (in an August 2002 address to the Veterans of Foreign
Wars) described the threat from Iraq as follows: "Should all [of Hussein's
WMD] ambitions be realized, the implications would be enormous for the
Middle East and the United States.... Armed with an arsenal of these weapons
of terror and a seat atop 10 percent of the world's oil reserves, Saddam
Hussein could then be expected to seek domination of the entire Middle East,
take control of a great portion of the world's energy supplies, [and]
directly threaten America's friends throughout the region." This was, of
course, unthinkable to Bush's inner circle. And all one need do is
substitute the words "Iranian mullahs" for Saddam Hussein, and you have a
perfect expression of the Bush administration case for making war on Iran.

    So, even while publicly focusing on Iran's weapons of mass destruction,
key administration figures are certainly thinking in geopolitical terms
about Iran's role in the global energy equation and its capacity to obstruct
the global flow of petroleum. As was the case with Iraq, the White House is
determined to eliminate this threat once and for all. And so, while oil may
not be the administration's sole reason for going to war with Iran, it is an
essential factor in the overall strategic calculation that makes war likely.

    Michael T. Klare is a professor of peace and world security studies at
Hampshire College and the author of Blood and Oil: The Dangers and
Consequences of America's Growing Dependency on Imported Oil (Metropolitan
Books). 

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posted April 11, 2005 at 1:37 am

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