Will Iraq Be a Global Gas Pump? (Page 3)

This article originally appeared on TomDispatch.

A New Petro-State Servicing the Global Economy?

No one should underestimate the potential obstacles in the way of this objective. Any number of factors--a rise in opposition to giving away any part of the national "patrimony" to foreigners, a significant increase in insurgent violence, heightened factional fighting in Baghdad, a sharpening of tension between Baghdad and the Kurds, an increase in corruption--could prevent the realization of these ambitious goals. Moreover, pending the passage of a national oil and gas law (a goal pursued by US officials for years), the major foreign oil companies will remain reluctant to sink too much money into Iraq, fearful that their assets will not be protected.

Nevertheless, it appears that, for the first time since the outbreak of the Iran-Iraq War in 1980, the stars in the energy firmament are aligning in ways that may favor Iraq's reemergence as a major oil producer. Whereas the major powers once competed among themselves for influence in Iraq or backed one or another of Iraq's local rivals in efforts to weaken or contain that country, all now seem inclined to invest in, and benefit from, the reconstruction of its energy infrastructure. The Bush administration, which looked with alarm at Saddam Hussein's growing ties to Russia and China, invaded the country in part to reassert American dominance in the Persian Gulf region and diminish the role played by Moscow and Beijing. Today, Washington appears to welcome the growing role of Chinese and Russian firms in the rehabilitation of Iraq's dilapidated energy infrastructure.

It's a reasonable assumption that behind this unprecedented shift lies an acknowledgement of the inescapable reality of peak oil. As things stand now, the world will soon reach a maximum level of sustainable daily oil output, followed by an inevitable contraction in available supplies. Many experts believe that the peak in conventional (liquid) oil output is likely to occur in the very near future, perhaps in the 2010-2015 timeframe, with global output topping out about 5 to 10 million barrels per day higher than today's 85 million barrels.

Hitting the peak moment in that timeframe, and at that level, would prove devastating to the world economy, as global energy demand is expected to climb far higher, thanks to rising consumption patterns in China, India and other dynamos of the developing world. It's not hard, then, to do the math. An addition of perhaps 6 million supplemental barrels per day from Iraq would make a striking difference in the energy equation. In fact, it might prove the difference between squeaking by and a catastrophic worldwide shortage. Under such circumstances, it is understandable that--no matter what their governments felt about the Bush administration's invasion and occupation of Iraq--the major powers now share a common interest in facilitating that country's recovery as a major oil exporter.

For devastated Iraq, of course, these last years were a disaster, and real reconstruction of the country still remains a long way off. For the United States, gone are expectations of converting Iraq into a model Middle Eastern democracy, or of inserting a Western-trained, pro-US regime in Baghdad. Nor is there any expectation that the state-owned Iraq National Oil Company will be completely privatized--once the dream of Bush-era neocons. Nonetheless, the (re)emergence of a functioning Iraqi petro-state working closely with foreign energy firms to boost global oil supplies (with American troops, whether based in Iraq or neighboring countries, providing ultimate security) would be an outcome that could be sold to Congress and, presumably, a majority of the American public.

Within Iraq itself, conditions may favor such an outcome. Although various Iraqi factions have enormous differences, all recognize that their future prosperity rests on the successful development of the nation's hydrocarbon reserves. While Shiites, Sunnis and Kurds may each hope to benefit disproportionately from this great treasure, they all realize that some degree of cooperation--for example, in the construction and maintenance of export facilities--is essential to their ambitions, however disparate. While the bargaining over the terms of cooperation may seem endless, and violence may sometimes accompany these negotiations, it is likely that some sort of collaborative structure will, in the end, emerge. A gradual drawdown, if not total departure, of American forces will, in all likelihood, only accelerate this process.

So it has finally come to this dismal possible end point: after all the blood and tears, all the death and destruction, almost all interested parties seem to be returning to the only vision of the country, however depressing, that has demonstrated any viability. In the future, Iraq is likely to be an oil-fueled petro-state with no function other than to service global markets and enrich local elites as well as the technocrats that assist them. This may be not be an inspiring vision--especially for Iraqis who have suffered so much--but it might possibly be the only reality available that will circumvent the horrific bloodletting of the past thirty years.

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