Blood for expensive oil
By
Bill Cecil
Published Jun 16, 2005 7:53 PM
It was the best of times, it was the worst of
times. For Wall Street fat cats and their flunky politicians, it was the spring
of hope. For masses of people in Eastern Europe, Asia, Africa and Latin America,
it was the winter of despair.
The time was the early 1990s. Wash ing
ton’s decades-long, $12-trillion-dollar Cold War had succeeded. The Soviet
Union and its vast planned economy had ceased to exist. From Saxony to Sakhalin,
across the vast expanse of Eurasia, plants built to produce for use, not profit,
closed their doors.
Production dropped by 50 percent. Hun dreds of
millions of people were plung ed into poverty. Life expectancy fell by more than
a decade. Infant mortality skyrocketed.
Hunger and disease stalked the
land. The suffering was not confined to the former Soviet bloc. Countries in
Africa, Asia and Latin America were devastated by the loss of Soviet aid and
trade.
For Corporate America, though, it was a bonanza.
Festival
of vultures
Wall Street soared as Eastern Europe’s new
capitalists poured stolen gains into Western stocks, bonds and real estate. The
dollar shot up in value as it became the de facto currency of the former Soviet
bloc.
The U.S. share of world industrial production jumped nearly 20
percent—the first big increase since the 1940s. The collapse of Soviet
industry left poor countries at the mercy of Wall Street banks and IMF
Structural Adjustment Programs.
The collapse of the Soviet military gave
the Pentagon a free hand to bomb and invade, from Iraq to Sudan to
Yugoslavia.
It was a festival of vultures.
President Bill Clinton
called the U.S. economic boom of the 1990s “the longest peacetime
expansion ever.” But it was the product of destruction on the scale of a
major war.
For the giant oil monopolies, the overthrow of the USSR created
an opportunity to grab that country’s vast energy resources. But it posed
a problem as well.
The Soviet Union produced more oil and gas than any
other country. But most of it was consumed inside the socialist bloc. New
capitalist Russia produced much less than the USSR had. But it exported much
more, even while many Russians now had no heat in the winter.
Cheap
Russian oil and gas flooded world markets. And Russia’s energy industry
was closed to outside investment. It was the impoverished country’s chief
source of foreign exchange. Even the corrupt Yeltsin regime couldn’t
afford to let Western firms take it over.
The regimes in the oil-rich
republics of Azerbaijan and Kazakhstan, far from the sea, welcomed U.S.
investment. Exxon Mobil and ChevronTexaco developed fields in Kazakhstan, while
BP focused on Azer baijan’s Apsheron peninsula. Unocal took an interest in
Turk menistan’s natural gas.
Expensive pipelines were planned to
bring those resources to faraway ports.
Not the oil, but the
profits
Many opponents of Bush’s war in Iraq call it a war for
cheap oil. But companies like BP, ExxonMobil and ChevronTexaco are not in
business to give people heat and gas. They’re in business to make
money—profit, the maximum return on their invested capital.
Their
great fear is not an oil shortage but an oil glut—too much oil coming on
the market, pushing down prices and profits and the value of their
investments.
This may seem contrary to other capitalist interests. Oil,
however, is central to the world position of U.S. and British monopoly capital.
Big Oil is the wealthiest and most powerful section of the U.S. capitalist
class. It is closely tied to the biggest banks, which were founded on oil money,
finance drilling and exploration, and recycled oil income.
The richest
U.S. capitalist dynasties—the Rockefellers and the Morgans—are now
united in the JPMorganChase Bank and the ExxonMobil Oil Company.
In 1998
two events rocked the oil industry. The collapse of the Russian ruble, coming on
the heels of the East Asian currency crisis, pushed oil prices below $10 a
barrel. And in February 1998 the United Nations authorized Iraq, which had been
under U.S./UN sanctions since 1990, to sell its oil directly to foreign
buyers.
The Feb. 28, 1998, San Francisco Chron icle warned the UN’s
move “would devalue British North Sea oil, undermine Amer ican oil
production and—much more important—it would destroy the huge profits
which the United States stands to gain from its massive investment in Caucasian
oil production, especially in Azerbaijan.”
The article was
headlined “Iraq Oil Poses Threat to West.”
The Clinton regime,
thinking of long-term U.S. corporate interests, begged the oil companies not to
drop their pipeline projects. If U.S. firms didn’t grab the region’s
resources, someone else would—perhaps Russia or France or China.
Profits came first, however. Unocal dropped its plans to build a natural
gas pipeline to the Indian Ocean through Afghanistan. And oil executives told
the Clinton regime a pipeline across the Caucasus would not be worth it unless
oil rose to $40 a barrel and stayed there. It seemed like a distant prospect at
the time.
Clinton ordered a massive bombing of Iraq later that
year.
Fast forward to 2002. U.S. troops have occupied Afghanistan. The
Bush regime is openly preparing to invade Iraq. Oil prices—and oil company
profits—spiral upward. The business media calls it the “war
premium.”
On Aug. 1, bankers, oil executives and then-U.S. Energy
Secretary Spencer Abra ham met in London to announce the Baku-Tbilisi-Ceyhan
Pipeline (BTC) would go forward. Construction began on Sept. 18.
Seven
months later Bush’s tanks roared across the Iraqi border.
It is now
2005. Iraq is in ruins, with over 100,000 civilians dead. The price of oil has
been pushed to around $50 a barrel. Oil profits are at record
highs—ExxonMobil made $25 billion last year. And Azeri oil is flowing
through the Baku pipeline.
CIA-backed coups have changed regimes in
Georgia and Ukraine, and U.S. Special Forces are supervising Georgia’s
military. In April Donald Rumsfeld visited Baku to seek U.S. military bases on
Azeri land. Azerbaijan borders Russia on the north and Iran on the
south.
The Pentagon has also allocated $100 million to organize a force
called the Cas pian Guard, supposedly to protect BTC and U.S. oil investments in
Kazakh stan. Kazakhstan borders Russia and China.
All this accompanies the
Bush regime’s growing belligerence toward Iran, Russia and
China.
For workers in the U.S., high fuel prices amount to a wage cut. For
China, Japan and Western Europe, they mean a big transfer of their wealth to
U.S. and British banks and oil companies. For poor oil-importing countries, they
mean devastation.
Mass murder in Iraq made BTC profitable. Big Oil and the
banks behind it will demand more wars to maintain their rate of profit. They
will not stop unless the people stop them.
Articles copyright 1995-2012 Workers World.
Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.
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