A Crude Case for War?

"Companies don't like and won't make investments where there's uncertainty, and war is the biggest uncertainty of all," said Rob McKee, the former number two executive at ConocoPhillips and a former top U.S. official overseeing Iraq's oil sector. "On the other hand, companies were hoping that Iraq would open up, and as long as Saddam was there, Iraq couldn't. . . . From that point of view, maybe they were happy that there would be a change."

Still, the big firms had trepidations. In a conversation with a consultant shortly before the invasion, the chief executive of one of the five major oil companies described what he would say if asked to invest billions of dollars in Iraq after the war: Tell me about the contract system, arbitration, physical security and social cohesion, then I'll decide.

Five years later, he still hasn't decided, and physical security is so tenuous that the oil giants are still declining Iraqi invitations to send their employees to inspect existing fields.

This wasn't what Bush administration planners had expected.

Leading administration officials expected a postwar Iraq to reclaim its former position among oil exporters. "We are dealing with a country that can really finance its own reconstruction and relatively soon," then-Deputy Defense Secretary Paul Wolfowitz told Congress just after the invasion, predicting that oil would generate $50 billion to $100 billion in revenues within two to three years. Ironically, Iraq might approach that figure this year because of high prices, not higher production.

Prewar planning settled who would oversee Iraq's oil sector. The Pentagon picked Phil Carroll, a well-respected former top executive at Royal Dutch Shell, who was succeeded by McKee. War critics point to such industry ties as evidence of nefarious influence, but former administration members say the choices were made on the basis of expertise. "If you wanted to get someone to help run an oil industry, who would you choose?" asked one person involved in selecting Carroll. "A broker on an exchange? An environmental expert? Or the head of an oil company?"

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The controversial details were all part of the larger strategic picture. "When we first decided on the war, I don't remember oil playing an important part," says Brent Scowcroft, national security adviser under the elder Bush and a critic of the current president's decision to invade.

But that's because concern about oil supplies is part of the architecture of U.S. foreign policy. Scowcroft notes that oil can't be disregarded because Iraq and its neighbors sit on two-thirds of the world's oil reserves. But oil needn't be mentioned either because it's self-evident. War critics might call that the perfect conspiracy.

In a sense, though, all Americans are part of that conspiracy. We have built a society that is profligate with its energy and relies on petroleum that happens to be pooled under some unstable or unfriendly regimes. We have frittered away energy resources with little regard for the strategic consequences. And now it's hard and expensive to change our ways.

Zaab Sethna, a business consultant and former official of the Iraqi National Congress, says that he attended many Pentagon and State Department meetings and never heard postwar oil policy discussed.

But, he says, "Let's not kid ourselves. Iraq is sitting on a very large portion of oil itself and is in a key region of the world. And that makes it important for U.S. security interests. . . . The Iraqi opposition . . . realized that Rwanda wouldn't be getting the attention of the superpower."

Until Rwanda discovers oil.

mufsons@washpost.com

Steven Mufson covers energy for The Post.