Sunday, March 18, 2007

Four years ago this week, the tanks rolled for what President Bush originally called, "Operation Iraqi Liberation" -- O.I.L. I kid you not.

And it was four years ago that, from the White House, George Bush, declaring war, said, "I want to talk to the Iraqi people." That Dick Cheney didn't tell Bush that Iraqis speak Arabic … well, never mind. I expected the President to say something like, "Our troops are coming to liberate you, so don't shoot them." Instead, Mr. Bush told, the Iraqis,

"Do not destroy oil wells."

Nevertheless, the Bush Administration said the war had nothing to do with Iraq's oil. Indeed, in 2002, the State Department stated, and its official newsletter, the Washington Post, repeated, that State's Iraq study group, "does not have oil on its list of issues."

But now, we've learned that, despite protestations to the contrary, Condoleezza Rice held a secret meeting with the former Secretary-General of OPEC, Fadhil Chalabi, an Iraqi, and offered Chalabi the job of Oil Minister for Iraq. (It is well established that the President of the United States may appoint the cabinet ministers of another nation if that appointment is confirmed by the 101st Airborne.)

In all the chest-beating about how the war did badly, no one seems to remember how the war did very, very well -- for Big Oil.

The war has kept Iraq's oil production to 2.1 million barrels a day from pre-war, pre-embargo production of over 4 million barrels. In the oil game, that's a lot to lose. In fact, the loss of Iraq's 2 million barrels a day is equal to the entire planet's reserve production capacity.

In other words, the war has caused a hell of a supply squeeze -- and Big Oil just loves it. Oil today is $57 a barrel versus the $18 a barrel price under Bill "Love-Not-War" Clinton.

Since the launch of Operation Iraqi Liberation, Halliburton stock has tripled to $64 a share -- not, as some believe, because of those Iraq reconstruction contracts -- peanuts for Halliburton. Cheney's former company's main business is "oil services." And, as one oilman complained to me, Cheney's former company has captured a big hunk of the rise in oil prices by jacking up the charges for Halliburton drilling and piping equipment.

But before we shed tears for Big Oil's having to hand Halliburton its slice, let me note that the value of the reserves of the five biggest oil companies more than doubled during the war to $2.36 trillion.

And that was the plan: putting a new floor under the price of oil. I've have that in writing. In 2005, after a two-year battle with the State and Defense Departments, they released to my team at BBC Newsnight the "Options for a Sustainable Iraqi Oil Industry." Now, you might think our government shouldn't be writing a plan for another nation's oil. Well, our government didn't write it, despite the State Department seal on the cover. In fact, we discovered that the 323-page plan was drafted in Houston by oil industry executives and consultants.

The suspicion is that Bush went to war to get Iraq's oil. That's not true. The document, and secret recordings of those in on the scheme, made it clear that the Administration wanted to make certain America did not get the oil. In other words, keep the lid on Iraq's oil production -- and thereby keep the price of oil high.

Of course, the language was far more subtle than, "Let's cut Iraq's oil production and jack up prices." Rather, the report uses industry jargon and euphemisms which require Iraq to remain an obedient member of the OPEC cartel and stick to the oil-production limits -- "quotas" -- which keep up oil prices.

The Houston plan, enforced by an army of occupation, would, "enhance [Iraq's] relationship with OPEC," the oil cartel.

And that's undoubtedly why Condoleezza Rice asked Fadhil Chalabi to take charge of Iraq's Oil Ministry. As former chief operating officer of OPEC, the oil cartel, Fadhil was a Big Oil favorite, certain to ensure that Iraq would never again allow the world to slip back to the Clinton era of low prices and low profits. (In investigating for BBC, I was told by the former chief of the CIA's oil unit that he'd met with Fadhil regarding oil at Bush's request. Fadhil recently complained to the BBC. He denied the meeting with the Bush emissary in London because, he noted, he was secretly meeting that week in Washington with Condi!)

Fadhil, by the way, turned down Condi's offer to run Iraq's Oil Ministry. Ultimately, Iraq's Oil Ministry was given to Fadhil's fellow tribesman, Ahmad Chalabi, a convicted bank swindler and neo-con idol. But whichever Chalabi is nominal head of Iraq's oil industry in Baghdad, the orders come from Houston. Indeed, the oil law adopted by Iraq's shaky government this month is virtually a photocopy of the "Options" plan first conceived in Texas long before Iraq was "liberated."

In other words, the war has gone exactly to plan -- the Houston plan. So forget the naïve cloth-rending about a conflict gone haywire. Exxon-Mobil reported a record $10 billion profit last quarter, the largest of any corporation in history. Mission Accomplished.


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Greg Palast is the author of the New York Times bestseller, Armed Madhouse: From Baghdad to New Orleans -- Sordid Secrets and Strange Tales of a White House Gone Wild. A new edition, updated and expanded, will be released April 24.