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Despite the Bush administration’s claims that the proposed war on Iraq is only about

weapons of mass destruction, simmering below the surface is Bush’s ‘need’ to secure

a continued supply of cheap oil.

While oil is not the only factor motivating Bush’s preparations for war, US oil

dependency is playing a large part in fuelling conflict in the Middle East region. The

company that has done more than any other to keep the US hooked on oil is

ExxonMobil (known as Esso in the UK and Europe). In order to protect its business

in fossil fuels, ExxonMobil has spent the last decade sabotaging international action

on climate change and directing US climate and energy policy. It has made concerted

efforts to undermine the accepted scientific consensus on climate change, and is still

misleading the public and policy makers over the economic implications of tackling

global warming. It has also funded ‘climate sceptic’ scientists and industry front

groups to lobby on its behalf. When Bush pulled out of the Kyoto Protocol in 2001,

ExxonMobil was the architect of his climb-down.

Now US energy policy is setting the path for the nation’s foreign policy. Yet there

are alternative routes. As Peter Hain, UK Foreign Office Minister of State, has said:

Greenpeace outlines our proposed solutions to energy security issues, and expands on

focus on the role oil is playing in driving the US towards war.

Only time will tell which oil company will benefit most from a war in Iraq. The prize

for western oil companies is potentially enormous. However, US oil companies are

only likely to benefit if Bush secures a regime change in Iraq, whereas a peaceful

resolution is likely to leave French, Russian and Chinese oil companies as the main

winners. Certainly ExxonMobil’s historic interests in Iraq’s oil, along with its current

stake in the wider Middle East region, make it a prime and natural candidate to profit

from a post-war carve up of Iraqi oil fields. Furthermore, as the world’s largest oil

company, it is also the most influential, and the closest to Bush. This may not be a

examines the evidence.

3

The US consumes over 25% of the oil produced world-wide, and imports slightly

more than half of this. US energy policy under Bush/Cheney is focussed almost

entirely on ways to meet an increasing US demand for fossil fuels. The

administration’s 2001 Energy Plan predicted that an increased demand for oil was

inevitable, with oil imports needing to rise from 10.4mb/day at present to 16.7mb/day

Yet this increasing demand for oil is totally unnecessary. The ever-increasing sales of

large SUVs over smaller cars means that, overall, the average efficiency of new

vehicles sold in US has been getting worse since the late 1980's. Mile for mile, an

average vehicle in the US uses around 40% more fuel than in the UK. If US vehicles

were as efficient as UK vehicles, nearly two and a half million barrels of oil would be

The Energy Plan also spelled out the US dependence on a stable energy market and

With 65% of the world’s oil reserves, the Middle East is the only region able to

satisfy any substantial rise in world demand. US oil deposits are increasingly

depleted, and many other non-OPEC fields are beginning to run dry as well. It looks

inevitable that future supplies will have to come from the Gulf region. What is also

certain is that there will be ever more competition for oil if no action is taken to

diversify into renewable energy sources. By 2020 China’s oil consumption, for

example, is predicted to match that of the US.

May 2001.

"light duty automotive technology and fuel efficiency trends 1975-2001). Comparative average fuel

efficiency for new cars and light goods vehicles sold in the UK is approximately 28 MPG. DETR

figures give the average MPG for cars sold in 2001 as 39.5 and estimate 35.5 for light goods vehicles.

Assuming a 50:50 mix this puts the UK average at 37.5 mpg. Allowing for different test conditions, 28

mpg is a more accurate comparison (estimated from comparisons official figures for models in the UK

and US). Between mid December 2002 and mid January 2003 the US refined crude oil to produce over

8.5 million barrels of motor gasoline per day (US Energy Information Administration figures). In 2001

the US imported 2,675,000 of crude oil every day from Arab OPEC countries (Algeria, Iraq, Kuwait,

Qatar, Saudi Arabia, UAE) (Source US Energy Information Administration).

2002

May 2001.

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But the US knows that this reliance on imports puts it in a vulnerable position.

Political turmoil in Venezuela (the fourth biggest supplier of US oil imports) has

virtually halted exports to the US. Meanwhile Saudi Arabia, the second biggest

supplier to the US – responsible for meeting about one-sixth of US oil import needs –

and security chiefs fear that Saudi Arabia is a political ‘powder keg’, at risk of

exploding from within. If Saudi oil exports were stopped, there would be no spare oil

Controlling Iraqi oil would allow the US to reduce Saudi influence over oil policy –

weakening OPEC and giving Washington increased leverage over the world oil

market, limiting the influence too of Russia, Mexico and Venezuela.

Iraq is sitting on 10% of the world’s oil reserves - 112bn barrels, second only to Saudi

Arabia. That’s 16 years worth of US oil consumption. It is only currently producing

a fraction of that potential, and large sectors of Iraqi territory have never been fully

explored, so there is a good chance that their actual reserves may be far greater. The

Back in 1998, a letter sent to President Clinton, signed by many of the current

Washington pro-war ‘hawks’ (including Richard Perle, John Bolton, Richard

Armitage, Donald Rumsfeld and Paul Wolfowitz) called for the aim of American

In 1999, Air Force Brigadier General William Looney, head of the US Central

Command’s Airborne Expeditionary Force, was quoted in Washington Post speaking

Since then, a number of Bush officials and oil industry insiders have let slip one of the

key motivations behind the proposed attack on Iraq:

October 2002

http://www.newamericancentury.org/iraqclintonletter.htm

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A former Mobil chemical engineer Fadel Gheit, now an investment specialist at a

New York brokerage firm, told fifty of the largest pension funds and financial

According to former CIA director James Woolsey, a leading advocate of US military

No international oil company has undertaken exploration and production in Iraq

during the last decade of UN sanctions, though many have continued to buy and

refine Iraqi oil through middlemen. The oil companies, however, have pursued very

different strategies on Iraq during this time, according to the political position of their

national governments. Russian and French oil companies both have historic links

with and interests in Iraq, and, along with oil companies from China, they have

negotiated production agreements worth $38 billion to develop Iraqi oil fields after

sanctions are lifted. Meanwhile, sanctions have succeeded in keeping their rivals (the

US and UK companies) at bay. Former ExxonMobil vice chairman Lucio Noto said

Gerth,New York Times, 26 November 2002

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John Browne, CEO of BP, clearly senses the danger of his company being left out of

The rivalry is therefore intense between the contract holders and the US and UK oil

companies who fear they will be pushed aside in a post-sanctions Iraq. All out regime

change however – the stated aim of the Bush administration - offers more promise to

US companies, as existing oil contracts could be overturned. Ahmed Chalabi, head of

the Iraqi National Congress (INC) – the umbrella opposition group – has made it clear

that the US would be rewarded for toppling Saddam with a lucrative slice of the pie,

INC spokespeople have confirmed that Chalabi met executives of three US oil majors

in Washington in October to negotiate the carve up of Iraqi oil post-Saddam, though

officials told the Wall St Journal that Dick Cheney’s staff hosted an informational

meeting on Iraq with industry executives in October, with ExxonMobil,

ChevronTexaco, ConocoPhillips and Halliburton among the companies represented.

Both the Bush Administration and the companies deny that such a meeting ever took

As a recent Deutsche Bank report on the potential for Big Oil in post-sanctions Iraq

The biggest prize for these companies would of course be to secure control of the

greenfield sites – the new reserves. But the US knows full well that a peaceful

resolution to the current situation in Iraq is likely to leave its biggest oil companies

out in the cold.

November 2002

Financial Times, 5 November 2002

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ExxonMobil may be toeing the official Bush Administration line that this war has

nothing to do with oil, but industry experts place it at the forefront of the companies

likely to benefit from a changed regime in Iraq. An earlier report by Deutsche Bank

If its historic position in Iraq is anything to go by, the answer must be "yes". Exxon

and Mobil had significant stakes in the Iraq Petroleum Company before the industry

was nationalised in 1972. The Company was joint-owned by Royal Dutch-Shell, BP,

Exxon, Mobil and the French company CFP (now TotalFinaElf). Exxon and Mobil

between them held a 23.75% share in the company, given to them in the so-called Red

Line Agreement that divvied up Middle Eastern oil in 1928. This share was

apparently given only after intense diplomatic pressure from Washington on the

British, who had blocked the efforts of US oil companies in favour of their own

companies - BP and Shell.

While US firms have not bought oil directly from Baghdad since 1998, the US was

still Iraq’s main crude outlet as recently as 2001, taking nearly half of Iraq’s exports

through middlemen trading companies. ExxonMobil was one of the five biggest US

buyers and refiners of Iraqi crude in 2001, but stopped accepting Iraqi crude in Spring

2002, when Iraq added an illegal surcharge to its oil exports. However, as the

surcharge was gradually lowered and eventually scrapped, ExxonMobil’s purchase of

Iraqi oil rose again – from 70,000 barrels per day in July to more than 200,000 barrels

Meanwhile ExxonMobil is negotiating contracts with Kuwait for the development of

potential leadership of a huge new gas project – a deal that would be the first major

http://www.forbes.com/newswire/2002/10/14/rtr750028.html

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While no western companies have drilled in Saudi Arabia since nationalisation,

ExxonMobil’s CEO Lee Raymond has confirmed that the company is currently the

ExxonMobil has told investors that it aims to grow its global oil output by an

ambitious 3% this year, but as Deutsche Bank points out, the company’s margins are

increasingly lower as its mature fields decline, and its actual production volumes are

One of Raymond’s deputies, Morris E Foster (President of ExxonMobil Development

For a company that still refuses to diversify into renewable forms of energy (unlike

some of its major competitors) access to new oil reserves will remain a top priority.

ExxonMobil has a record of funding right-wing industry front groups who lobby on

their behalf to ‘protect US business’ and keep the US addicted to oil. It is no

coincidence that many of these groups have an analysis of foreign policy that leads

them to lobby for an attack on Iraq.

Lee Raymond is vice chair of the Board of Trustees of the American Enterprise

Television.

http://www.exxonmobil.com/Corporate/files/corporate/public_policy1.pdf

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AEI’s vice president for foreign and defence policy studies recently suggested that

most influential resident fellows is Richard Perle – who is also one of the most vocal

and hardline of theWashington hawks. A former Reagan official, he is now Chair of

Bush’s Defence Policy Board. He has been actively advocating a war against Saddam

Another pro-war front group funded by ExxonMobil is the Heritage Foundation, who

received $65,000 from ExxonMobil in 2001. Their public statements recommend that

Anthony H. Cordesman of the Centre for Strategic and International Studies (which

In 2001 ExxonMobil also gave $20,000 to the Pacific Research Institute for Public

ExxonMobil has done more than any other company to keep the US hooked on oil.

Its campaign to increase American oil dependency has been executed mainly in the

arena of US climate and energy policy, where ExxonMobil has continually steered the

http://www.csis.org/hill/ts010301cordesman.html]

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US away from action to reduce the consumption of fossil fuels. It is this dependency

on oil which is now driving the US into a war to acquire access to and control of yet

more of the black gold.

In the words of Frank Sprow, ExxonMobil Vice President for health, safety and

charge against US participation in the Kyoto Protocol, waging a ten-year campaign of

ExxonMobil’s strategy involves attempting to distort and undermine the accepted

science on climate change, often through funding and promoting notorious scientists

who are sceptical of the case for human induced climate change. It also funds and

supports industry lobby groups to wage campaigns of misinformation, aimed at

stalling international climate negotiations, and misleading the public and policy

makers over the cost implications of tackling climate change.

ExxonMobil has a history of interference with the workings of the UN

Intergovernmental Panel on Climate Change (IPCC), including lobbying

(unsuccessfully) to have a sentence removed from the most recent IPCC report which

2002, when Dr Robert Watson was removed from the chair of the IPCC. Watson had

been a powerful voice in support of action to tackle climate change, and as the head of

the UN’s global warming body he had sway over governments. Dr Watson’s removal

followed concerted lobbying by the Bush Administration at the behest of

ExxonMobil.

Within days of Bush entering the White House, a fax sent by Arthur G. Randol III,

Senior Environmental Advisor at ExxonMobil, was sent to the new administration. It

answer, evidently, was ‘yes’. Exxon claims it was forwarding a previously written

document on behalf of an anonymous third party – but there is no mention of this on

the cover sheet and the document is dated as written on the day it was sent. Thus it

was that ExxonMobil were able, through their influence over Bush, to have Watson

removed from his position.

ExxonMobil has spent the last decade attempting to stop international agreements to

tackle climate change, achieving eventual success when Bush pulled the US out of the

Kyoto protocol in 2001. Bush’s route to office was paved with oil money, and Exxon

gave more than any other oil company to the Republicans in 2000 – over $1 million.

announcement of President Bush’s cabinet in January, it emerged that over half the

members (including Vice President Cheney) were drawn from the oil and gas

at http://www.greenpeace.org/reports/

11

industry. Bush’s under secretary for Economic Affairs in the Commerce Department

was the former Chief Economist for Exxon, Kathleen Cooper. Lobbying soon began

in earnest to get Bush to withdraw the US from the Kyoto protocol.

Two days before the President’s inauguration, ExxonMobil published advertisements

in the US press outlining its recommendations for ‘An Energy Policy for the New

Soon after Bush’s statement, in March 2001, of his formal opposition to the Kyoto

Protocol his team began drafting an "alternative". By October, Rene Dahan, an

Executive Vice President of ExxonMobil, was predicting in the Financial Times that

every ExxonMobil policy on climate change. Bush’s approach to carbon reductions is

entirely voluntary and would result in an increase in US carbon emissions of around

29% on 1990 levels, as opposed to the Kyoto target of a minimum reduction of 5.2%

on 1990 levels.

Full details of ExxonMobil’s lobbying activities on climate change, and their

By sabotaging any US attempts to tackle climate change, and steering the US into

increased dependence on oil, ExxonMobil is fuelling not only global warming, but a

war to secure a region with the largest reserves of oil in the world.