May 27, 2003
No Oil Windfall for U.S.
by Donald G. Mashburn

The slogans were boringly similar: “No blood for oil,” and “No war for oil.” World figures launched charges that the United States was going to war for Iraq’s oil. Former president of South Africa, Nelson Mandela, told a meeting in Johannesburg, "All Bush wants is Iraqi oil.”

Other anti-American bleats came from African and European sources, including the usual suspects, the UN ambassadors of France and Germany. The gist of the criticism was that the Iraqi war was about the “oil windfall” that would come with a victory over Iraq. But an oil windfall was never part of the plan to oust Saddam Hussein’s regime.

Now, after a stunningly swift military victory in Iraq, it’s clear that any “oil windfall” will benefit the Iraqi people. America has never warred against nations to seize its natural resources. The U.S. critics in the United Nations – notably Jean-David Levitte of France, and his German counterpart – know this, along with the exceptional rebuilding record of the United States after World War II.

War critics know by now that the American-led coalition is trying to put an unstable Iraq on the road to recovery, while dealing with internal factions always on the boil. The key to that recovery will be Iraqi oil. Not as an oil windfall for outsiders, but as oil sold in the open market to fund Iraq’s recovery, for the benefit of the Iraqi people.

The Council on Foreign Relations (CFR) has published new figures stating that Iraq has 112.5 billion barrels of proved oil reserves. That figure may be too high. Industry sources gave that same number more than two years ago. Iraq’s oil reserves may be closer to 110 billion barrels, still the world’s second largest, behind Saudi Arabia’s huge reserve of some 260 billion barrels.

We have no reliable current estimate of proved oil reserves for Iraq. That’s because during the 12 years since the Persian Gulf War, Saddam Hussein’s regime exploited Iraq’s oil production, while letting the production, transportation and refining infrastructure deteriorate. Drilling ceased, equipment wore out and ran down, while construction priority was on new palaces for Saddam.

So the widespread assumption that Iraqi postwar oil production would quickly return to 3 million barrels per day is unrealistic and uninformed. Oil production is, however, the bright hope for Iraqi people, particularly if supervised by the United States and Great Britain. No nation outstrips these two countries in drilling and production expertise, and know-how in getting things done.

Additionally, the Iraqis bring a lot to the oil patch, too. Iraqi engineers and technicians are knowledgeable and capable, and are credited with keeping oil production going with insufficient financial and management support – and with a quirky-to-idiotic tyrant issuing orders from Baghdad.

Another piece of the silver lining for the Iraqis is that knowledgeable oilmen are convinced that additional exploration and development of oil prospects in Iraq can substantially increase its proven oil reserves. Those reserves would bring new production on line.

Savvy people, using modern technology in a stable political climate, can soon restore Iraq’s oil production to 3 million barrels per day. Drilling additional prospective areas could, in time, increase Iraqi daily oil production to perhaps 5 million barrels. That would make Iraq a strong second to Saudi Arabia’s approximately 8 million daily barrels.

Three million barrels of oil per day, in a democratic nation, would be a double windfall for the Iraqi people. And they could credit both to decisive action by President George W. Bush and Britain’s Prime Minister Tony Blair.

Bottom line, the war with Iraq was not about an oil windfall for the United States. The “windfall” from Iraqi oil will go the Iraqi people. And that’s the way it should be.