The ongoing display of new wealth and power consumption by the Chinese during the Beijing Olympics adds a new wrinkle to the discussion on U.S. Middle East policy: Why did we attack Iraq, and what are the reasons behind out current position on Iran, considering other global issues related to oil production and consumption and possible WMD threats? The United State's assistance in the sharp increase Asian oil demands contribute to market instability[3], and is just one of many pieces of information that conflict with two popular views of U.S. Mid East policy: where a conflation of oil is positioned on one side, and a conflation of Israel on the other. Unfortunately, adherence to these exclusive paradigms obfuscates the many instances where these two categories (as crude conflations) thread together, revealing a more complicated picture where neither explanation is truly adequate as a sole explanation. Revealing the complexity of Mid East policy needs to break with these exclusive and restrictive paradigms as both of these viewpoints (among others) can bring information that serves to illustrate the larger, multifaceted picture.
(revised draft version- I'm not sure if this is too long for this site and may need to chop it up and re-post)
The ongoing display of new wealth and power consumption by the Chinese during the Beijing Olympics adds a new wrinkle to the discussion on U.S. Middle East policy: Why did we attack Iraq, and what are the reasons behind out current position on Iran, considering other global issues related to oil production and consumption and possible WMD threats? Alone, China, from the period after the first Gulf War to the ongoing second gulf war, moved from a net exporter of oil, to a rapidly growing country consuming roughly twice the value of Iraqi total oil production[1][2]. The United State's assistance in the sharp increase Asian oil demands contribute to market instability[3], and is just one of many pieces of information that conflict with two popular views of U.S. Mid East policy: where a conflation of oil is positioned on one side, and a conflation of Israel on the other. Unfortunately, adherence to these exclusive paradigms obfuscates the many instances where these two categories (as crude conflations) thread together, revealing a more complicated picture where neither explanation is truly adequate as a sole explanation. Revealing the complexity of Mid East policy needs to break with these exclusive and restrictive paradigms as both of these viewpoints (among others) can bring information that serves to illustrate the larger, multifaceted picture.
Oil
There is a great deal of discussion on Iraq, Iran and oil companies, and often this premise is positioned in contrast to Israel; However, an exploration of efforts by the oil companies reveals a much more complicated picture. While neoconservatives were writing about
[1996]This effort can focus on removing Saddam Hussein from power in Iraq — an important Israeli strategic objective in its own right
.....
An effective approach, and one with which American can sympathize, would be if Israel seized the strategic initiative along its northern borders by engaging Hizballah, Syria, and Iran, as the principal agents of aggression...
[1998] We urge you [Clinton] to articulate this aim, and to turn your Administration's attention to implementing a strategy for removing Saddam's regime from power. This will require a full complement of diplomatic, political and military efforts. Although we are fully aware of the dangers and difficulties in implementing this policy, we believe the dangers of failing to do so are far greater. We believe the U.S. has the authority under existing UN resolutions to take the necessary steps, including military steps, to protect our vital interests in the Gulf. In any case, American policy cannot continue to be crippled by a misguided insistence on unanimity in the UN Security Council.
Oil companies were fighting and lobbying to increase trade to both Iraq and Iran. In the late 1990's, Iraq was begging to sell their oil, and countries like France, Russia, UK, and Italy [4][5], and U.S. companies like ExxonMobil (and the American Petroleum Institute) were lobbying to ease the sanctions [6][7][8*][9*]. Oil corporations were not looking to invade Iraq before the war, as the neoconservatives were: the oil companies pushed hard to reduce sanctions.
In Iran, the U.S. oil companies ran into intense lobbying efforts in the 1990's that turned the trade relationship from U.S. oil companies as the biggest customers to severe sanctions that not only curbed U.S. companies, but imposed penalties on foreign companies trading with Iran as well[10][11]. By the mid 1990's, US oil companies were already Iran's biggest customers (a fact exposed, in part by an AIPAC research paper[12*]), despite laws forbidding the import of Iranian oil[12*][13*]. Conoco sought out to have the first production agreement with Iran to develop two large Iranian oil and gas fields. In a move wholly unanticipated by Conoco, AIPAC, Senator D'Amato (D-NY), and wealthy activists like Charles, Edgar (Jr.), and Edgar (Sr.) Bronfman successfully lobbied Congress to terminate the deal, over objection by U.S. oil companies[12*][13*][14*][15]. The resulting Iran and Libya sanctions act[10] placed stiff penalties on domestic and foreign companies, raising the ire of some of traditional American allies[13*][16].
Dick Cheney, both the oil industrialist and a man often associated with neoconservative foreign policy, broke sharply with neoconservative goals in the 1990's on both Iraq and Iran vis-a-vis oil. While neoconservatives were motivated by a lost opportunity for regime change in Iraq during the first Gulf war, and wrote about pre-emption in 1992[17], Cheney, broadcasting from the AEI (a neoconservative think tank), broke with this sentiment for pre-emption and famously and prophetically stated at great length how an invasion of Iraq would result in a "quagmire"[18]. Cheney vis-a-vis Iran also merges with this conflated topic of Israel. Cheney, in contrast to AIPAC, the Bronfmans (a family with various political and philanthropic associations to Israel[19][20][21][22]) , and neoconservative authors, called the US government "sanctions happy"[23*] and urged Congress to ease sanctions against Iran and enter into diplomatic discussions with the country’s leaders so the oilfield services company could legally do business there [24][25]. Furthermore, while Cheney publicly called Iraqi sanctions a good idea, he privately was conducting millions of dollars in business in Iraq (1997-2000) at roughly the same time he was railing against the Iran-Libya Sanctions Act [24][25][26]. Cheney moved in sync with these neoconservative goals for Iran and Iraq after September 11[27]. Thus Dick Cheney's positions in the 1990's ran contrary to the goals of the neoconservatives, AIPAC, and individual philanthropists associated with Israel.
A often cited follow up to this issue is the mysterious "Energy Task Force," (2001) a group designed to develop a national energy plan. While there's a great deal of speculation surrounding this meeting, unfortunately, nearly all of the activities have not been disclosed to the public. It would be interesting if FOIA requests could provide any reputable information on if "Big Oil" changed positions after lobbying intensely to drop sanctions and trade with Iraq in the 1990's. Another curious problem with this is, of course, American corporate and political implementation of neo-liberal economic policies that served to hyper-accelerate Asian oil demand in amounts that far outstrip Iraqi oil production. In other words, if the goal was to secure oil, or as greg Palast often writes, to control price fluctuations [28], then all of the collective US efforts that help ramp up demand in Asia (China alone moved from a net exporter to importing roughly twice what Iraq produces, and now India imports roughly Iraq's total production [29]) contrubutes to tighter margins, unstable conditions[3], and offsets theorized increases in Iraqi production. In addition, the US military currently imports 3 million gallons of fuel per day for Operation Iraqi Freedom, and this "a key reason for the soaring cost of the war effort" [30*]. Nobel prize economist J Stiglitz notes that the Iraq war itself has had severely deleterious effects on the U.S. economy, notably issues related to oil[31 pdf]. While there is debate on how tight the oil markets are, current events highlight motives to stabilize oil production, and not to drive consumers to alternative fuel sources. It is unclear whether the Saudis are able to ramp up production enough to offset the predicted drop in production that would come from a military strike on Iran [32]. However, it is clear that the Saudi's haven't increased production significantly[33][34][35][36], despite fears from industry experts on how a strike on Iran would 'roil oil markets,' and Saudi Arabia's fears of an "intensified search by the West for alternative energy" and desires for lower prices[34][37]. Furthermore, its hard to reconcile the aversion oil men, such as G.H.W. Bush and James Baker, to the Iraq war[38] and how the Iraq Study Group's (Baker) report was recieved by the neocons[39][40][41]. The ISG was ignored and the neocon "surge" plan was implemented instead [42]. Considering the undesirable market instability aided by increased demand (that far outstrips Iraqi oil production), the fear of high prices driving a demand for alternative fuels, the Saudi's desire for lower prices, industry expert's fears of a strike on Iran and the Saudi's inability (or unwillingness) to raise production to offset the loss coming from a military strike on Iran, the Iraq war's assistance in driving up oil prices, and the deleterious effects the war and high oil prices has on the U.S. economy in general, its unclear how a meeting with no real public disclosure can contribute to this discussion.
Another often cited point regarding oil and U.S. policy in the Middle East is the Carter Doctrine. The relevant passage that is often cited is
Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.
This doctrine was designed in response to Soviet military actions [43] by Carter's National Security Advisor Zbigniew Brzezinski[44]. Unfortunately for those attempting to use the Carter Doctrine passage as an explanation for U.S. moves on Iraq and Iran, Zbigniew Brzezinski has made some very strong condemnations of U.S. actions on both countries. Brzezinski called the Iraq war "a historic, strategic and moral calamity" and says to "stop the trappings of colonial tutelage"[45]. Brzezinski also said that the "U.S. is in danger of stampeding into a war against Iran[46], and Bush should dissuade Israel from attacking Iran[47]. Interestingly, even the Brzezinski-Carter Doctrine narrative spills over to the conflated "Israel" topic. Brzezinski has made recent news in his role as an adviser to Obama: namely his criticisms from the "pro-Israel community," and have contributed to concerns on Obama's stance vis-a-vis the Mid East[48][49]. One point of concern that is routinely mentioned is Brzezinski's stance on engaging Iran to help stabilize Iraq[50][51]. Other concerns are calls for the US to initiate dialogue with Hamas, description of Israel's action in the Second Lebanon War as a killing campaign against civilian hostages, and visits with Syria's President Assad [52]. Clearly, the author of the oft-cited Carter Doctrine passage (that was written roughly 30 years ago in connection with a Soviet threat) is at odds with neoconservative plans for the Iraq, Iran, and the Middle East.
One other monocausal or primary paradigm put forth is that of petro dollars. Curiously, while Saddam threatened to make this shift in Nov. 6, 2000[53][54], neoconservatives had directly written on regime change for Iraq more than 4 years prior to this announcement. Even McCain, the neoconservative's choice for candidate in 2000[55], discussed "overthrow[ing] regimes in rogue states such as Iraq," months before Saddam's announcement while Bush "emphasized more than McCain that the United States should intervene in conflicts when it is in the nation's direct interest to do so"[56].
The erroneously juxtaposed oil/Israel debate for Iraq often assumes that neoconservatives fit under a conflation of "Israel" (neoconservatives are not aligned with the Israeli left, for example) and oil is somehow absent from neoconservative plans in the Middle East. In fact, as mentioned above in the neoconservative 1996 paper, efforts to remove Saddam Hussein from power, and engage Iran, Syria, and Lebanon are presented as beneficial for Israel and the United States[57]. Similar to the struggles between Colin Powell (State Department) and the neoconservatives over Middle East policy, where Powell was pushing for an expansive courtship of Arab countries, pressure on Israel to make concessions to the Palestinians, and a willingness to "overlook the organizations and states that Israel would like to see crushed as terrorists and supporters of terrorists (Hamas, Hezbollah, the various armies of the Palestine Liberation Organization, Syria, Iran)" in a "virtually exclusive focus on Osama bin Laden and his network"[58][59][60*][61][62][63][64][65][66][67][68][69][70] and neoconservatives were pushing for regime change and pressure on Iraq, Iran, Syria, and Hezbollah[16][71][72][73][1996][74], neoconservatives fought with "big oil" over Iraq.
Neoconservatives looked to use Iraqi oil wealth to flood the fungible global oil market, weaken the Saudi's, and crush OPEC with low fuel prices. Saudi influence weakened considerably during the Bush (43) presidency[68][75], and at times, there were bellicose statements directed at the Saudis from the neoconservatives. In 2002, William Kristol announced a "vast U.S. foreign policy agenda, beginning with a war against Iraq and ending with replacing the monarchy in Saudi Arabia" in an "America-Israel centered" speech that unsettled many European allies[76]. Oil factored into the neoconservative plan for regime change among the region. As Peter Kiernan[27] states
Oil as a geostrategic factor also figured in the neo-conservative mission to unseat Saddam as the first step of politically transforming the Middle East. Removal of his regime was seen as crucial to undermining the other established oil powers in the region, Saudi Arabia and Iran. These states are, respectively, the largest and second-largest oil producers in the Organization of Petroleum Exporting Countries (OPEC), a group dominated by Middle East oil exporters.
A US-friendly Iraq that abandoned OPEC and pumped more oil would, some neo-conservatives argued, weaken Saudi Arabia and Iran and break the grip of OPEC on the global oil market. In this way, so the theory went, the petrodollars that strengthen the grip on power of the House of Saud and Iran's mullahs and fund terrorist networks in the Middle East would dry up. The mission to remake the Middle East could be done by flooding the market with Iraqi oil.
The oil factor in the plan for a regional transformation in the Middle East was pushed by some conservative journals and think-tanks in the run-up to the Iraq invasion. The National Review, for example, wrote in January 2002, "There are two principal sources of power for Middle Eastern states and terrorist groups hostile to the West: weapons of mass destruction and oil. Therefore, the war on terrorism should also seek to diminish the influence of - and perhaps destroy - OPEC." In November that year the National Review also claimed, "Iraqis could withdraw from OPEC [after Saddam's ouster] and begin fully pumping oil into the world market, thus reducing Saudi market power and one of the incentives for the US to appease the [Saudi] regime."
In March 2003 the Washington, DC-based Heritage Foundation released a paper on Iraq's oil that recommended privatization of its oil industry and Iraq's departure from OPEC. It wrote, "Iraq's restructuring and privatization of its oil-and-gas sector could become a model for oil-industry privatizations in other OPEC states as well, weakening the cartel's influence over global energy markets ... and depending on the dynamics of global economic growth and world oil output, Iraq's increase in oil-production capacity could bring lower oil prices in the long term." The report also claimed, "An Iraq outside of OPEC would find available from its oil trade an ample cash flow for the country's rehabilitation."
(Also see [77][78][79][80])
Indeed, this neoconservative - neoliberal[81] view was accepted as the plan for Iraqi oil[27][78][79]. With neocons looking to secure short term supplies to flood Opec and starve the Saudis others of oil revenues, oil companies were worried about the short-term danger and the supposed long-term benefits of intervention[82][83]. However, as Greg Palast frequently points out, these plans have changed after the invasion revealed failures in the neoconservative's plans. Plans were to have gone back to nationalizing the oil companies, yet this issue is still not resolved. Moreover, the Iraqi government is extra sensitive to any designs on "taking their oil," and have fought against it; and despite the recent news that Iraq is now prepared to offer technical support contracts for major Western firms, U.S. oil companies have poor chances in securing a major field, or a major production sharing agreement [84].
Despite the ongoing and unresolved issue of who may profit from Iraqi oil after the neoconservative accepted plan to flood opec was discarded, it remains the plan used for the war - which is the focus of this paper. In other words, arguments espousing "War for oil" often looks at information acts separate from why we went to war. Greg Palast, the journalist who focuses on oil companies and Iraq, notes how
The industry-favoured plan was pushed aside by a secret plan, drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields. The new plan was crafted by neo-conservatives intent on using Iraq's oil to destroy the Opec cartel through massive increases in production above Opec quotas.[78]
Oil companies had serious reservations against the neoconservative plan. Phillip Carrol, the former CEO of Shell oil thought the plan "would only be thought about by someone with no brain"[78]. The Council of Foreign Relations and the James A Baker Institute wrote a joint paper warning
"against rosy scenarios about the ability of Iraq's petroleum to influence oil markets quickly, as well as of the receptiveness of Iraqis toward outsiders trying to influence decision-making on the big-picture issues (such as privatization and OPEC membership).
It commented, "There has been a great deal of wishful thinking about Iraqi oil." The report cautioned against expectations of an Iraqi oil bonanza with the assessment that "Iraq's oil industry is in desperate need of repair and investment" after more than two decades of wars and sanctions. It also warned that the pace of recovery in Iraq's oil sector would depend on the post-invasion political and security environment. [27]
The neoconservatives and "big oil" arguments over oil in what was a neoconservative push for the Iraq war over the objections of Colin Powell and the State Department, highlight the problems in simply labeling one category as "oil." Moreover, The neoconservatives direct language in describing [1996] how "removing Saddam Hussein from power in Iraq — an important Israeli strategic objective in its own right, and their general "unwavering support for Israel"[57] glosses over how they believed that this woud benefit America. It also conflates how "good for Israel" focuses on the Israeli right- as highlighted by the sharp breaks that occurred when Rabin took power and by current Jewish groups breaking with this trend[85][86][87][88][89]. Therefore, one should be careful not to conflate "pro-Israel" to the Israeli right - or buy into the conspiracy theory that this represents "all Jews".
Revealing the complexity of Mid East policy needs to break with these exclusive and restrictive paradigms of simply either oil or Israel and look at those who's Mid East model was ultimately accepted in 2002: and both of these topics together can help reveal a larger, more complicated picture. While neoconservatives wrote in 1996 on Iran, and are currently pressing for war[90][91][92][93][94][95][96][97][98][99], Oil industry experts are especially worried on how a strike on Iran may roil Oil markets[34]. Combined with the (U.S. assisted) increase in demand from Asia that far outstrips Iraq's total production, the deleterious economic effects of the Iraq war on the U.S. economy, Saudi concerns about pushing consumers to use alternative fuels and for market stability, the deep need to fix our crumbling domestic infrastructure[100][101][102][103] contrasted the money spent in Iraq, which leaves the U.S. economy, and the aversion of "Oil men" to the neoconservative plan for Iraq, simply stating "war for oil" is grossly misleading due conflation. Moreover, simply contrasting this subject into a dichotomy of oil and Israel is also grossly misleading. More on this subject will be covered in a second installation.
[8]Iraq Says It Welcomes U.S. Firms if Sanctions End --- Foreign Companies Are Eager to Play Role in RebuildingBy Stephen J. Glain. Wall Street Journal. (Eastern edition). New York, N.Y.: Nov 24, 1999. pg. A.14
[9]Over a Barrel in Iraq? Clinton Policy Sidelines U.S. Firms in the Rush for Rights to Tap `Super-Giant' Field; [FINAL Edition]The Washington Post May 7, 1995. pg. H.01...U.S. companies, in contrast, are sitting on the sidelines as their competitors rush to woo Baghdad. Although some U.S. giants, such as Mobil Corp., had close ties with the Iraqis before the Persian Gulf War, none of them attended the Baghdad conference. The American firms are blocked by the Clinton administration, which -- nearly alone among its allies -- insists that the U.N. economic sanctions against Baghdad should continue indefinitely."The U.S. companies are going to be way behind once the sanctions are lifted," said Lawrence Goldstein, president of the industry-supported Petroleum Industry Research Foundation. "On Iraq, the U.S. oil companies clearly have to follow the administration, and the administration is not going to budge on this," he said."U.S. companies cannot go as far as the Europeans," agreed a senior U.S. oil company official, who asked not to be identified. "The U.S. government has given us very clear guidance. We can't go to Iraq. We can't pay for an Iraqi's dinner. The French are in a very different bargaining position."...
[12] Wall Street Journal
Jun 18, 1996. pg. A24, 1 pgs
...snip..
The measure, which the House is expected to approve today with the Clinton administration's blessing, infuriates some of the U.S.'s closest European allies. Last week in an undiplomatic outburst, the European Union's top executive turned to President Clinton during a joint news conference to complain that it wasn't "justifiable or effective for one country to impose its tactics on another."
But for Aipac, known formally as the American Israel Public Affairs Committee, the measure isn't just a way to fight international terrorism. It offers the chance for a comeback of sorts, a badly needed way to burnish its own image. Aipac isn't a political-action committee; it is the chief U.S. lobbying group for Israel and is financed by private fund-raising in this country.
Aipac staffers insist that it is business as usual -- they are working on Capitol Hill to promote Israel's interests. But the group's interest in Iranian terrorism at least partly reflects a recent dilemma. Over the past few years, Israel's active pursuit of peace with its Arab neighbors and warm ties with Washington made Aipac's mission less clear. The group no longer needed to mobilize its troops to thwart U.S. arms sales to Arab states or vilify Palestinian leader Yasser Arafat. Instead, American Jews were divided over issues such as the future of Jerusalem and the prospect of a Palestinian state.
"The consensus surrounding Israel has diminished and this, among other things, has reduced somewhat the centrality of Aipac in the American Jewish community," says Benjamin Ginsberg, a Johns Hopkins University professor who writes on American-Jewish politics.
Aipac's funk began in 1992 when Israeli voters elected the Labor Party's Yitzhak Rabin as prime minister, ending 15 years of dominance by the hard-line Likud bloc. On a visit here, Mr. Rabin met privately with Aipac's top leaders, many of whom are conservative and cozy with Likud. The new prime minister read them the riot act, gruffly telling Aipac officials that he would conduct foreign policy directly with the White House and that they should stay out of the way.
Shocked and searching for a way to remain relevant, Aipac hit upon the perfect vehicle -- Sen. Alfonse D'Amato. Since 1993, the New York Republican had been offering sweeping Iran sanctions bills. Despite the general animosity toward Tehran, the bills languished in Congress. Aipac recognized that all that was needed was an organized effort to refine the legislation and push it through. The lobbying group decided to become the locomotive.
When the Republicans took over Congress in early 1995 and Sen. D'Amato became chairman of the Banking Committee, the bill's fortunes -- and Aipac's -- were about to change. The administration regularly attacked Iran's support of international terrorism and urged its allies not to do business with Tehran. Then, thanks partly to an Aipac research paper shared with the White House, the administration learned to its embarrassment that U.S. oil companies were Iran's biggest customers by far.
In March of last year, to show its resolve, the White House intervened to stop Conoco Inc., the energy unit of DuPont Co., from going ahead with plans to help develop two Iranian oil fields. But casting the spotlight on Iran also gave Sen. D'Amato's bill momentum. Soon, the administration was conducting separate discussions with the senator's office and with Aipac.
Sen. D'Amato's bill focused on imposing U.S. penalties on foreign companies for trading with Iran. (The bill also includes sanctions against Libya, though Iran remains Aipac's principle focus.) But the administration, believing such a sweeping bill would violate international trade law, suggested another approach: it would punish foreign companies that in the future invested at least $40 million in Iran's energy sector, which is vital to its economy. The sanctions would include barring U.S. Export-Import Bank support on sales to those foreign companies and would ban such companies from receiving loans of more than $10 million from a U.S. financial institution. The administration hoped such an approach would be less offensive to America's allies. Aipac, recognizing the broader appeal of such a measure, signed on. So did Sen. D'Amato. The bill moved through the Senate with no opposition.
Next, Aipac prepared for a tougher fight in the House, where powerful interests traditionally oppose so-called secondary boycotts. In a world-wide campaign closely coordinated with Sen. D'Amato, Aipac and the New York Republican helped raise the stakes by publicizing pending business deals involving foreign firms and Iran.
In February of this year, for instance, the Australian Jewish Review published an article saying that Broken Hill Proprietary Co., Australia's largest company, was about to sign a $1 billion deal with Iran. A few days later, the Australian Financial Review's Washington correspondent wrote a similar report, including a letter to the firm by Sen. D'Amato. The company, under pressure, denied that such a deal was pending.
Meanwhile, the House International Relations Committee approved a bill that included certain trade sanctions and was tougher than Sen. D'Amato's measure. But GOP Rep. Bill Archer of Texas, chairman of the Ways and Means Committee that also has jurisdiction, strongly opposed trade sanctions.
With the two House committees at loggerheads, Aipac played the key role of go-between, sitting with Ways and Means staffers in the office of Thelma Askey, staff director of the panel's trade subcommittee, to try to resolve differences. In recent weeks, Aipac won support for a measure favored by the International Relations Committee that could lower the investment threshold to $20 million after a year if other nations don't agree to join the U.S. effort against Iran. But Aipac failed in efforts to extend sanctions to banks that finance energy deals in Iran. The Senate is expected to accept the House's version of the final bill.
Ironically, the recent election victory of Israel's hard-line Likud party, which is likely to stall peace talks, could create tensions between the U.S. and Israel -- and re-energize Aipac's basic mission. "If Clinton tries to put pressure on Israel," says Morris Amitay, a former executive director of Aipac, "he'll find that Aipac will be working with a lot of people in Congress, particularly the Republican majority, who will be happy to take on the White House."
[13] Clinton Bars U.S. Oil Pacts With Iran;Executive Order Blocks Conoco Production Deal
Washington Post Mar 15, 1995 pg. A.01
President Clinton yesterday decided to ban American companies from producing oil in Iran, thus blocking Houston-based Conoco Inc.'s deal to develop two of that country's Persian Gulf oil fields.
The White House and Conoco said the company agreed to terminate its contract with Iran if an executive order was issued. Edgar Bronfman Sr., a key member of the board of directors of DuPont Co., Conoco's parent company, also had lobbied vigorously on Capitol Hill against the deal.
...snip...
American companies are permitted to purchase Iranian oil -- indeed, they are believed to be the world's biggest purchasers of Iranian crude -- although they are forbidden by law to import it into the United States.
The Conoco deal would have been the first production agreement between a U.S. oil company and Iran since the fall of the shah in 1979. Oil industry analysts said Conoco's investment in the two Iranian oil and gas fields might have totaled as much as $1 billion.
Bronfman, his brother, Charles, and son, Edgar Jr., are top officers of Seagram Co., which owns 24.2 percent of DuPont. They met last week with half a dozen Capitol Hill leaders, according to Israel Singer, secretary general of the World Jewish Congress, who was present at the meetings.
Bronfman encouraged them to oppose the deal, telling Senate Majority Leader Robert J. Dole (R-Kan.), House Speaker Newt Gingrich (R-Ga.), House Minority Leader Richard A. Gephardt (D-Mo.) and others that Iran is a "terrorist state."
...snip..
The collapse of the Conoco deal was bad news for other American oil firms, which have been eager to increase their business dealings with Iran. They were watching for the Clinton administration's reaction to the deal to see whether it would adhere to the hard line in force during the Republican White House years.
By killing the deal, the administration strengthened its position as it pursues a diplomatic effort with the European nations and Russia to cut their business with Iran.
Conoco's contract with Iran's National Iranian Oil Co., which was announced March 5, would have permitted it to install platforms and wells, and to pump oil and gas from two fields located just south of a small Iranian island in the Persian Gulf. At the time, the White House raised concerns but did not strongly condemn the action.
Under the agreement with Iran, Conoco's Dutch affiliate, Conoco Iran NV, would have installed the platforms and other equipment. As part of the deal, Conoco then would have bought the oil from the Iranians at favorable prices and resold it abroad.
The deal had raised the ire of Sen. Alfonse M. D'Amato (R-N.Y.), who has proposed banning all trade with Iran. McMurry, in an uncommon sympathetic word for a Republican, said the White House "understands the concerns" of the senator but had not decided on whether to support the legislation.
Edward Krapels, director of ESAI, a District-based research firm that focuses on energy markets, said Conoco "badly miscalculated" reaction to the Iran deal. By attracting so much negative publicity, Krapels said, Conoco angered other U.S. oil companies that had hoped to do more business with Iran.
...snip...
"Iran was clearly hoping to counter the D'Amato bill, but their move has backfired," said Kenneth Timmerman, publisher of Iran Brief, a newsletter in Kensington dealing with Iranian strategy and trade.
"This oil deal was particularly damaging to U.S. policy because it involved developing new oil field export capacity -- and Iran did not have to put up a penny," he said. "It would have meant Iran would have had more ready cash to support overseas terrorism and its expensive nuclear projects with Russia and China."
[14] WallStreet Journal Mar 24, 1995 pg. A.1
CLINTON SCRAMBLES to stay ahead of Congress on pressuring Iran.
A bill planned by New York Sen. D'Amato to restrict trade with Iran gathers steam after the administration's blocking of Conoco's $1 billion oil-development contract with Tehran. D'Amato aides mull toughening the measure to penalize foreign companies that sell Iran strategic goods. Aipac, the pro-Israel lobby, plans to push the bill when it is introduced in a few weeks.
Clintonites debate an executive order that would selectively tighten existing sanctions on Iran but be less Draconian than the D'Amato bill. Christopher leads an effort to punish Iran, but a senior deputy questions the legality of penalizing foreign companies or overseas units of U.S. corporations. Commerce and Energy department officials prefer that any new sanctions be mild. But Clintonites insist they won't be outflanked by D'Amato.
"Nobody gets to the right of us on Iran," vows a top U.S. official.
[23] Halliburton chief calls U.S. 'sanctions-happy'
Cheney criticizes government policy in Cato Institute address
Jim Landers Washington Bureau of The Dallas Morning News
June 24, 1998
Federal economic sanctions affecting more than 70 countries are harming both U.S. policy goals and business, Halliburton Co. chairman Dick Cheney said Tuesday. "Our government has become sanctions-happy," Mr. Cheney told a conference at the Cato Institute, a libertarian policy center.
Mr. Cheney, secretary of defense during the Bush administration and a former Wyoming congressman, focused his remarks on the policy impact of sanctions.
..snip...
[30] Oil for War
After invading one of the most petroleum-rich countries on earth, the U.S. military is running on empty.
American Conservative
March 10, 2008
Robert Bryce
Napoleon famously said that an army marches on its stomach. That may have been true for his 19th-century force. But the modern American military runs on jet fuel—and lots of it.
Today the average American G.I. in Iraq uses about 20.5 gallons of fuel every day, more than double the daily volume consumed by U.S. soldiers in Iraq in 2004. Thus, in order to secure the third-richest country on the planet, the U.S. military is burning enormous quantities of petroleum. And nearly every drop of that fuel is imported into Iraq. These massive fuel requirements—just over 3 million gallons per day for Operation Iraqi Freedom, according to the Pentagon’s Defense Energy Support Center—are a key reason for the soaring cost of the war effort.
Controlling Iraq’s oil has historically been a vital factor in America’s involvement in Iraq and was always a crucial element of the Bush administration’s plans for the post-Saddam era. Of course, that’s not how the war was sold to the American people. A few months before the invasion, Secretary of Defense Donald Rumsfeld declared that the looming war had "nothing to do with oil, literally nothing to do with oil." The war was necessary, its planners claimed, because Saddam Hussein supported terrorism and, left unchecked, he would unleash weapons of mass destruction on the West.
Nevertheless, oil was the foremost strategic focus for the U.S. military in Iraq. The first objectives of the invading forces included the capture of key Iraqi oil terminals and oilfields. On March 20, 2003, Navy SEALs engaged in the first combat of the war when they launched a surprise invasion of the Mina al-Bakr and Khor al-Amaya oil loading terminals in the Persian Gulf. A few hours later, Marine Lt. Therral Childers became the first U.S. soldier to die in combat in the invasion when he was killed fighting for control of the Rumaylah oil field in southern Iraq.
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[60] Battle Joined, a Hawk Spreads His Wings
Forward . New York, N.Y.: Oct 12, 2001. Vol. CV, Iss. 31,362; pg. 6
WASHINGTON -- As the television cameras have captured him, Deputy Defense Secretary Paul Wolfowitz is the official whose feral-sounding surname and bellicose sound-bites have marked him as the administration's wild-eyed warmonger, the wooly counterpoint to that suave and sensible diplomat, Secretary of State Colin Powell.
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As he showed at the hearing, Mr. Wolfowitz, a longtime academic as well as policymaker, combines an impressive scholarly understanding of war with a formidable political agility at skirting red tape -- qualities that have made him one of the most important figures in the Defense establishment. He has also emerged, with Vice President Dick Cheney and Mr. Rumsfeld, as one of the administration's leading hawks and one of Israel's most important allies.
As an official in the Reagan and first Bush administrations, he advocated for hard-line, interventionist positions on China and the Balkans. During the Gulf War, he argued that the United States should march on Baghdad to eliminate the regime of Saddam Hussein, a position that put him at odds with Mr. Powell. (In his autobiography, Mr. Powell playfully labeled his longtime adversary a "right-wing nut.")
A vocal critic of Clinton-administration Iraq policy and the Oslo peace process, Mr. Wolfowitz has since September 11 pushed for the new war against terrorism to target Saddam, again drawing Mr. Powell's fire. Speaking at the Pentagon two days after the September attacks, Mr. Wolfowitz called for "ending states who sponsor terrorism" -- at the time an echo of the president's stance. Mr. Powell later delivered an icy riposte to the comment, saying, "I think `ending terrorism' is where I would leave it and let Mr. Wolfowitz speak for himself."
Mr. Wolfowitz remains undaunted. Although the October 4 hearing focused on planning minutiae, he was quick to raise the menace of Iraq, denouncing the Iraqi dictator's ability to wreak havoc on the energy market and calling on the United State to "reduce the number of people who have their hands on that kind of trigger."
Even if, in the initial stages of the war on terrorism, Mr. Powell appears to have the upper hand, capital watchers do not underestimate the influence of Mr. Wolfowitz, who was among those considered to head the Pentagon. The deputy secretary brings impressive academic credentials to the party -- he has written authoritatively on a number of foreign-policy issues, from Russian and Southeast Asian policy to arms control -- and, unlike the pragmatic Mr. Powell, he comes to the craft of policymaking with a distinct philosophy.
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