to idiots who think it was about democracy

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    A desire to loosen Opec's stranglehold on petroleum prices lies behind Bush's interest in Africa and his plans for Iraq, writes Randeep Ramesh

    Friday July 11, 2003 UK Guardian

    America's new world order appears founded on a declaration of independence. George Bush, an oil man from an oil state, wants America to wean itself off a dangerous addiction to faraway hydrocarbons.
    As the president's national energy plan puts it, this is "a condition of increased dependency on foreign powers that do not always have American interests at heart".

    Although admirably blunt, this statement has haunted the Bush administration since it was made in May 2001 - months before the attacks of September 11. America's war on terrorism is often viewed as a scramble for black gold.

    There is a logic to this. Getting gas out of the Caspian is a lot easier if you are faced with a pliant Afghanistan. If Iraq is not run by a dictator determined to use oil as a weapon of war - as Dick Cheney said "[to] seek domination of the entire Middle East" - then Americans could sleep easier.

    So no surprise that when Mr Bush landed in Africa, whose western coast floats above rich oil-bearing sea beds, the image is of the president as plunderer of a continent's mineral wealth rather than provider of American benevolence.

    Oil is not scarce - but most of it lies under the sands of the Middle East. Since 1973, when Arab nations imposed an embargo on oil exports to the US, US presidents have been promising to end America's reliance on energy from potentially unfriendly sources.

    Mr Bush may succeed where his predecessors failed. The reason is simply this: America is moving swiftly from influencing the affairs of other nations to controlling them.

    This shift sees the dovetailing of two strategic imperatives: energy security and terrorism. The hatred and contempt of America is undoubtedly fed by US high-handedness but it can also be funded by oil revenues.

    So oil-rich states that have turned a blind eye to militant anti-Americanism will pay a heavy price. Any that seek to use their wealth to buy weapons of mass destruction will also be threatened with American military might. Viewed from such a perspective, it is easy to see why Iran has been targeted by the Bush administration.

    Unlike the imperialists of the British empire who sought control of the Middle East's vast oil reserves by owning them, America's approach is more subtle. Getting oil from many different sources - Africa's share of US imports could replace the Middle East's this decade - is not enough of an answer.

    It is the price of oil that can bring the American economy to its knees. To see just how destructive oil price shocks can be, it is worth noting that they have cost America $7 trillion dollars (£4.2 trillion) in the past 30 years.

    Oil is a fungible commodity, worth nothing until sold. How can America ensure that the price of oil is stable - low enough for its citizens to afford but high enough for producers to recoup investment costs and make tidy profits?

    The answer is to tame unruly regions and coax friendly oil-rich nations to pump more oil on to the world markets. Neither is easy especially given that, as populous nations such as China and India grow, the demand for energy will rise, putting upward pressure on the oil price in decades to come.

    From such a vantage point, it is easier to understand how America's interests are served by occupying Iraq. Sitting on top of the globe's second largest oil reserves, Iraq has the potential to become one of the world's biggest petrol pumps.

    Installing a US-friendly administration in Baghdad would not only serve foreign policy objectives - securing an ally in a troubled region - but also the American economy. America aspires to having the same relationship with Iraq as it had, before September 11, with Saudi Arabia.

    In this future scenario, Baghdad would displace Riyadh as America's friendly swing producer - able to flood the market if there was any attempt to send oil prices skyward by cutting back on production. Of course this will require massive investment and a sustained nation-building effort, but as Mr Bush puts it America is in for the long haul.

    All this points to the US's latent intent: to finish the oil cartel Opec. It will be interesting to see whether Mr Bush can convince Nigeria that its interests lie in an alliance with Washington not with the Middle East.

    If Lagos were to leave Opec or even argue America's case, then Mr Bush's African expedition would have yielded a significant gain for America. Another triumph would be if Mexico, whose president is in political trouble, allowed foreign investment into its inefficient, state-owned petrol industry. Helping Mexico to pump more oil will help loosen the grip that Opec has on the current oil price.

    Perhaps the most interesting American advance is that which is least talked about. US oil companies are reckoned to have brought rights to almost 75% of the oil and gas output from the Caspian, which potentially contains tens of billions of barrels of oil.

    The region's powers - Iran, China and Russia - all are wary of a growing US military presence in central Asia. But seen from Capitol Hill, it makes sense to have troops around to secure American investment and the route of potential pipelines in the face of rival powers.

    If America's attempt to rebuild Iraq and Afghanistan is not ground to dust by the warlordism and chaos that threatens both countries, Washington may reap a significant future peace dividend in the shape of lower oil prices. Oil was not the (stated) reason for going to war, but it appears a good enough reason to win the peace.

 
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