Global Policy Forum

By Robert Dreyfuss*

If you were to spin the globe and look for real estate critical to building an American empire, your first stop would have to be the Persian Gulf. The desert sands of this region hold two of every three barrels of oil in the world -- Iraq's reserves alone are equal, by some estimates, to those of Russia, the United States, China, and Mexico combined. For the past 30 years, the Gulf has been in the crosshairs of an influential group of Washington foreign-policy strategists, who believe that in order to ensure its global dominance, the United States must seize control of the region and its oil. Born during the energy crisis of the 1970s and refined since then by a generation of policymakers, this approach is finding its boldest expression yet in the Bush administration -- which, with its plan to invade Iraq and install a regime beholden to Washington, has moved closer than any of its predecessors to transforming the Gulf into an American protectorate.

In the geopolitical vision driving current U.S. policy toward Iraq, the key to national security is global hegemony -- dominance over any and all potential rivals. To that end, the United States must not only be able to project its military forces anywhere, at any time. It must also control key resources, chief among them oil -- and especially Gulf oil. To the hawks who now set the tone at the White House and the Pentagon, the region is crucial not simply for its share of the U.S. oil supply (other sources have become more important over the years), but because it would allow the United States to maintain a lock on the world's energy lifeline and potentially deny access to its global competitors. The administration "believes you have to control resources in order to have access to them," says Chas Freeman, who served as U.S. ambassador to Saudi Arabia under the first President Bush. "They are taken with the idea that the end of the Cold War left the United States able to impose its will globally -- and that those who have the ability to shape events with power have the duty to do so. It's ideology."

Iraq, in this view, is a strategic prize of unparalleled importance. Unlike the oil beneath Alaska's frozen tundra, locked away in the steppes of central Asia, or buried under stormy seas, Iraq's crude is readily accessible and, at less than $1.50 a barrel, some of the cheapest in the world to produce. Already, over the past several months, Western companies have been meeting with Iraqi exiles to try to stake a claim to that bonanza.

But while the companies hope to cash in on an American-controlled Iraq, the push to remove Saddam Hussein hasn't been driven by oil executives, many of whom are worried about the consequences of war. Nor are Vice President Cheney and President Bush, both former oilmen, looking at the Gulf simply for the profits that can be earned there. The administration is thinking bigger, much bigger, than that.

"Controlling Iraq is about oil as power, rather than oil as fuel," says Michael Klare, professor of peace and world security studies at Hampshire College and author of Resource Wars. "Control over the Persian Gulf translates into control over Europe, Japan, and China. It's having our hand on the spigot."

Ever since the oil shocks of the 1970s, the United States has steadily been accumulating military muscle in the Gulf by building bases, selling weaponry, and forging military partnerships. Now, it is poised to consolidate its might in a place that will be a fulcrum of the world's balance of power for decades to come. At a stroke, by taking control of Iraq, the Bush administration can solidify a long-running strategic design. "It's the Kissinger plan," says James Akins, a former U.S. diplomat. "I thought it had been killed, but it's back."

Akins learned a hard lesson about the politics of oil when he served as a U.S. envoy in Kuwait and Iraq, and ultimately as ambassador to Saudi Arabia during the oil crisis of 1973 and '74. At his home in Washington, D.C., shelves filled with Middle Eastern pottery and other memorabilia cover the walls, souvenirs of his years in the Foreign Service. Nearly three decades later, he still gets worked up while recalling his first encounter with the idea that the United States should be prepared to occupy Arab oil-producing countries.

In 1975, while Akins was ambassador in Saudi Arabia, an article headlined "Seizing Arab Oil" appeared in Harper's. The author, who used the pseudonym Miles Ignotus, was identified as "a Washington-based professor and defense consultant with intimate links to high-level U.S. policymakers." The article outlined, as Akins puts it, "how we could solve all our economic and political problems by taking over the Arab oil fields [and] bringing in Texans and Oklahomans to operate them." Simultaneously, a rash of similar stories appeared in other magazines and newspapers. "I knew that it had to have been the result of a deep background briefing," Akins says. "You don't have eight people coming up with the same screwy idea at the same time, independently.

"Then I made a fatal mistake," Akins continues. "I said on television that anyone who would propose that is either a madman, a criminal, or an agent of the Soviet Union." Soon afterward, he says, he learned that the background briefing had been conducted by his boss, then-Secretary of State Henry Kissinger. Akins was fired later that year.

Kissinger has never acknowledged having planted the seeds for the article. But in an interview with Business Week that same year, he delivered a thinly veiled threat to the Saudis, musing about bringing oil prices down through "massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate."

In the 1970s, America's military presence in the Gulf was virtually nil, so the idea of seizing control of its oil was a pipe dream. Still, starting with the Miles Ignotus article, and a parallel one by conservative strategist and Johns Hopkins University professor Robert W. Tucker in Commentary, the idea began to gain favor among a feisty group of hardline, pro-Israeli thinkers, especially the hawkish circle aligned with Democratic senators Henry Jackson of Washington and Daniel Patrick Moynihan of New York.

Eventually, this amalgam of strategists came to be known as "neoconservatives," and they played important roles in President Reagan's Defense Department and at think tanks and academic policy centers in the 1980s. Led by Richard Perle, chairman of the Pentagon's influential Defense Policy Board, and Deputy Secretary of Defense Paul Wolfowitz, they now occupy several dozen key posts in the White House, the Pentagon, and the State Department. At the top, they are closest to Vice President Cheney and Defense Secretary Donald Rumsfeld, who have been closely aligned since both men served in the White House under President Ford in the mid-1970s. They also clustered around Cheney when he served as secretary of defense during the Gulf War in 1991.

Throughout those years, and especially after the Gulf War, U.S. forces have steadily encroached on the Gulf and the surrounding region, from the Horn of Africa to Central Asia. In preparing for an invasion and occupation of Iraq, the administration has been building on the steps taken by military and policy planners over the past quarter century.

Step one: The Rapid Deployment Force

In 1973 and '74, and again in 1979, political upheavals in the Middle East led to huge spikes in oil prices, which rose fifteenfold over the decade and focused new attention on the Persian Gulf. In January 1980, President Carter effectively declared the Gulf a zone of U.S. influence, especially against encroachment from the Soviet Union. "Let our position be absolutely clear," he said, announcing what came to be known as the Carter Doctrine. "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." To back up this doctrine, Carter created the Rapid Deployment Force, an "over-the-horizon" military unit capable of rushing several thousand U.S. troops to the Gulf in a crisis.

Step two: The Central Command

In the 1980s, under President Reagan, the United States began pressing countries in the Gulf for access to bases and support facilities. The Rapid Deployment Force was transformed into the Central Command, a new U.S. military command authority with responsibility for the Gulf and the surrounding region from eastern Africa to Afghanistan. Reagan tried to organize a "strategic consensus" of anti-Soviet allies, including Turkey, Israel, and Saudi Arabia. The United States sold billions of dollars' worth of arms to the Saudis in the early '80s, from AWACS surveillance aircraft to F-15 fighters. And in 1987, at the height of the war between Iraq and Iran, the U.S. Navy created the Joint Task Force-Middle East to protect oil tankers plying the waters of the Gulf, thus expanding a U.S. naval presence of just three or four warships into a flotilla of 40-plus aircraft carriers, battleships, and cruisers.

Step three: The Gulf War

Until 1991, the United States was unable to persuade the Arab Gulf states to allow a permanent American presence on their soil. Meanwhile, Saudi Arabia, while maintaining its close relationship with the United States, began to diversify its commercial and military ties; by the time U.S. Ambassador Chas Freeman arrived there in the late í”80s, the United States had fallen to fourth place among arms suppliers to the kingdom. "The United States was being supplanted even in commercial terms by the British, the French, even the Chinese," Freeman notes.

All that changed with the Gulf War. Saudi Arabia and other Gulf states no longer opposed a direct U.S. military presence, and American troops, construction squads, arms salesmen, and military assistance teams rushed in. "The Gulf War put Saudi Arabia back on the map and revived a relationship that had been severely attrited," says Freeman.

In the decade after the war, the United States sold more than $43 billion worth of weapons, equipment, and military construction projects to Saudi Arabia, and $16 billion more to Kuwait, Qatar, Bahrain, and the United Arab Emirates, according to data compiled by the Federation of American Scientists. Before Operation Desert Storm, the U.S. military enjoyed the right to stockpile, or "pre-position," military supplies only in the comparatively remote Gulf state of Oman on the Indian Ocean. After the war, nearly every country in the region began conducting joint military exercises, hosting U.S. naval units and Air Force squadrons, and granting the United States pre-positioning rights. "Our military presence in the Middle East has increased dramatically," then-Defense Secretary William Cohen boasted in 1995.

Another boost to the U.S. presence was the unilateral imposition, in 1991, of no-fly zones in northern and southern Iraq, enforced mostly by U.S. aircraft from bases in Turkey and Saudi Arabia. "There was a massive buildup, especially around Incirlik in Turkey, to police the northern no-fly zone, and around [the Saudi capital of] Riyadh, to police the southern no-fly zone," says Colin Robinson of the Center for Defense Information, a Washington think tank. A billion-dollar, high-tech command center was built by Saudi Arabia near Riyadh, and over the past two years the United States has secretly been completing another one in Qatar. The Saudi facilities "were built with capacities far beyond the ability of Saudi Arabia to use them," Robinson says. "And that's exactly what Qatar is doing now."

Step four: Afghanistan

The war in Afghanistan -- and the open-ended war on terrorism, which has led to U.S strikes in Yemen, Pakistan, and elsewhere -- further boosted America's strength in the region. The administration has won large increases in the defense budget -- which now stands at about $400 billion, up from just over $300 billion in 2000 -- and a huge chunk of that budget, perhaps as much as $60 billion, is slated to support U.S. forces in and around the Persian Gulf. Military facilities on the perimeter of the Gulf, from Djibouti in the Horn of Africa to the island of Diego Garcia in the Indian Ocean, have been expanded, and a web of bases and training missions has extended the U.S. presence deep into central Asia. From Afghanistan to the landlocked former Soviet republics of Uzbekistan and Kyrgyzstan, U.S. forces have established themselves in an area that had long been in Russia's sphere of influence. Oil-rich in its own right, and strategically vital, central Asia is now the eastern link in a nearly continuous chain of U.S. bases, facilities, and allies stretching from the Mediterranean and the Red Sea far into the Asian hinterland.

Step five: Iraq

Removing Saddam Hussein could be the final piece of the puzzle, cementing an American imperial presence. It is "highly possible" that the United States will maintain military bases in Iraq, Robert Kagan, a leading neoconservative strategist, recently told the Atlanta Journal-Constitution. "We will probably need a major concentration of forces in the Middle East over a long period of time," he said. "When we have economic problems, it's been caused by disruptions in our oil supply. If we have a force in Iraq, there will be no disruption in oil supplies."

Kagan, along with William Kristol of the Weekly Standard, is a founder of the think tank Project for the New American Century, an assembly of foreign-policy hawks whose supporters include the Pentagon's Perle, New Republic publisher Martin Peretz, and former Central Intelligence Agency director James Woolsey. Among the group's affiliates in the Bush administration are Cheney, Rumsfeld, and Wolfowitz; I. Lewis Libby, the vice president's chief of staff; Elliott Abrams, the Middle East director at the National Security Council; and Zalmay Khalilzad, the White House liaison to the Iraqi opposition groups. Kagan's group, tied to a web of similar neoconservative, pro-Israeli organizations, represents the constellation of thinkers whose ideological affinity was forged in the Nixon and Ford administrations.

To Akins, who has just returned from Saudi Arabia, it's a team that looks all too familiar, seeking to implement the plan first outlined back in 1975. "It'll be easier once we have Iraq," he says. "Kuwait, we already have. Qatar and Bahrain, too. So it's only Saudi Arabia we're talking about, and the United Arab Emirates falls into place."

LAST SUMMER, Perle provided a brief glimpse into his circle's thinking when he invited rand Corporation strategist Laurent Murawiec to make a presentation to his Defense Policy Board, a committee of former senior officials and generals that advises the Pentagon on big-picture policy ideas. Murawiec's closed-door briefing provoked a storm of criticism when it was leaked to the media; he described Saudi Arabia as the "kernel of evil," suggested that the Saudi royal family should be replaced or overthrown, and raised the idea of a U.S. occupation of Saudi oil fields. He ultimately lost his job when rand decided he was too controversial.

Murawiec is part of a Washington school of thought that views virtually all of the nations in the Gulf as unstable "failed states" and maintains that only the United States has the power to forcibly reorganize and rebuild them. In this view, the arms systems and bases that were put in place to defend the region also provide a ready-made infrastructure for taking over countries and their oil fields in the event of a crisis.

The Defense Department likely has contingency plans to occupy Saudi Arabia, says Robert E. Ebel, director of the energy program at the Center for Strategic and International Studies (CSIS), a Washington think tank whose advisers include Kissinger; former Defense Secretary and CIA director James Schlesinger; and Zbigniew Brzezinski, Carter's national security adviser. "If something happens in Saudi Arabia," Ebel says, "if the ruling family is ousted, if they decide to shut off the oil supply, we have to go in."

Two years ago, Ebel, a former mid-level CIA official, oversaw a CSIS task force that included several members of Congress as well as representatives from industry including ExxonMobil, Arco, BP, Shell, Texaco, and the American Petroleum Institute. Its report, "The Geopolitics of Energy Into the 21st Century," concluded that the world will find itself dependent for many years on unstable oil-producing nations, around which conflicts and wars are bound to swirl. "Oil is high-profile stuff," Ebel says. "Oil fuels military power, national treasuries, and international politics. It is no longer a commodity to be bought and sold within the confines of traditional energy supply and demand balances. Rather, it has been transformed into a determinant of well-being, of national security, and of international power."

As vital as the Persian Gulf is now, its strategic importance is likely to grow exponentially in the next 20 years. Nearly one out of every three barrels of oil reserves in the world lie under just two countries: Saudi Arabia (with 259 billion barrels of proven reserves) and Iraq (112 billion). Those figures may understate Iraq's largely unexplored reserves, which according to U.S. government estimates may hold as many as 432 billion barrels.

With supplies in many other regions, especially the United States and the North Sea, nearly exhausted, oil from Saudi Arabia and Iraq is becoming ever more critical -- a fact duly noted in the administration's National Energy Policy, released in 2001 by a White House task force. By 2020, the Gulf will supply between 54 percent and 67 percent of the world's crude, the document said, making the region "vital to U.S. interests." According to G. Daniel Butler, an oil-markets analyst at the U.S. Energy Information Administration (EIA), Saudi Arabia's production capacity will rise from its current 9.4 million barrels a day to 22.1 million over the next 17 years. Iraq, which in 2002 produced a mere 2 million barrels a day, "could easily be a double-digit producer by 2020," says Butler.

U.S. strategists aren't worried primarily about America's own oil supplies; for decades, the United States has worked to diversify its sources of oil, with Venezuela, Nigeria, Mexico, and other countries growing in importance. But for Western Europe and Japan, as well as the developing industrial powers of eastern Asia, the Gulf is all-important. Whoever controls it will maintain crucial global leverage for decades to come.

Today, notes the EIA's Butler, two-thirds of Gulf oil goes to Western industrial nations. By 2015, according to a study by the CIA's National Intelligence Council, three-quarters of the Gulf's oil will go to Asia, chiefly to China. China's growing dependence on the Gulf could cause it to develop closer military and political ties with countries such as Iran and Iraq, according to the report produced by Ebel's CSIS task force. "They have different political interests in the Gulf than we do," Ebel says. "Is it to our advantage to have another competitor for oil in the Persian Gulf?"

David Long, who served as a U.S. diplomat in Saudi Arabia and as chief of the Near East division in the State Department's Bureau of Intelligence and Research during the Reagan administration, likens the Bush administration's approach to the philosophy of Admiral Mahan, the 19th-century military strategist who advocated the use of naval power to create a global American empire. "They want to be the world's enforcer," he says. "It's a worldview, a geopolitical position. They say, 'We need hegemony in the region.'"

UNTIL THE 1970s, the face of American power in the Gulf was the U.S. oil industry, led by Exxon, Mobil, Chevron, Texaco, and Gulf, all of whom competed fiercely with Britain's BP and Anglo-Dutch Shell. But in the early '70s, Iraq, Saudi Arabia, and the other Gulf states nationalized their oil industries, setting up state-run companies to run wells, pipelines, and production facilities. Not only did that enhance the power of opec, enabling that organization to force a series of sharp price increases, but it alarmed U.S. policymakers.

Today, a growing number of Washington strategists are advocating a direct U.S. challenge to state-owned petroleum industries in oil-producing countries, especially the Persian Gulf. Think tanks such as the American Enterprise Institute, the Heritage Foundation, and CSIS are conducting discussions about privatizing Iraq's oil industry. Some of them have put forward detailed plans outlining how Iraq, Saudi Arabia, and other nations could be forced to open up their oil and gas industries to foreign investment. The Bush administration itself has been careful not to say much about what might happen to Iraq's oil. But State Department officials have had preliminary talks about the oil industry with Iraqi exiles, and there have been reports that the U.S. military wants to use at least part of the country's oil revenue to pay for the cost of military occupation.

"One of the major problems with the Persian Gulf is that the means of production are in the hands of the state," Rob Sobhani, an oil-industry consultant, told an American Enterprise Institute conference last fall in Washington. Already, he noted, several U.S. oil companies are studying the possibility of privatization in the Gulf. Dismantling government-owned oil companies, Sobhani argued, could also force political changes in the region. "The beginning of liberal democracy can be achieved if you take the means of production out of the hands of the state," he said, acknowledging that Arabs would resist that idea. "It's going to take a lot of selling, a lot of marketing," he concluded.

Just which companies would get to claim Iraq's oil has been a subject of much debate. After a war, the contracts that Iraq's state-owned oil company has signed with European, Russian, and Chinese oil firms might well be abrogated, leaving the field to U.S. oil companies. "What they have in mind is denationalization, and then parceling Iraqi oil out to American oil companies," says Akins. "The American oil companies are going to be the main beneficiaries of this war."

The would-be rulers of a post-Saddam Iraq have been thinking along the same lines. "American oil companies will have a big shot at Iraqi oil," says Ahmad Chalabi, leader of the Iraqi National Congress, a group of aristocrats and wealthy Iraqis who fled the country when its repressive monarchy was overthrown in 1958. During a visit to Washington last fall, Chalabi held meetings with at least three major U.S. oil companies, trying to enlist their support. Similar meetings between Iraqi exiles and U.S. companies have also been taking place in Europe.

"Iraqi exiles have approached us, saying, 'You can have our oil if we can get back in there,'" says R. Gerald Bailey, who headed Exxon's Middle East operations until 1997. "All the major American companies have met with them in Paris, London, Brussels, all over. They're all jockeying for position. You can't ignore it, but you've got to do it on the QT. And you can't wait till it gets too far along."

But the companies are also anxious about the consequences of war, according to many experts, oil-company executives, and former State Department officials. "The oil companies are caught in the middle," says Bailey. Executives fear that war could create havoc in the region, turning Arab states against the United States and Western oil companies. On the other hand, should a U.S. invasion of Iraq be successful, they want to be there when the oil is divvied up. Says David Long, the former U.S. diplomat, "It's greed versus fear."

Ibrahim Oweiss, a Middle East specialist at Georgetown University who coined the term "petrodollar" and has also been a consultant to Occidental and BP, has been closely watching the cautious maneuvering by the companies. "I know that the oil companies are scared about the outcome of this," he says. "They are not at all sure this is in the best interests of the oil industry."

Anne Joyce, an editor at the Washington-based Middle East Policy Council who has spoken privately to top Exxon officials, says it's clear that most oil-industry executives "are afraid" of what a war in the Persian Gulf could mean in the long term -- especially if tensions in the region spiral out of control. "They see it as much too risky, and they are risk averse," she says. "They think it has 'fiasco' written all over it."

About the Author: Robert Dreyfuss was named one of the "best unsung investigative journalists working in print" last year by the Columbia Journalism Review.