Skip to comments.U.S. Considers Tapping Iraqi Oil to Pay for War's Aftermath
Posted on 01/12/2003 3:28:26 PM PST by kattracks
If the U.S. occupies Iraq in the wake of an invasion, Iraq may be forced to cough up the multi-billion dollar cost.
That's a possibility now under consideration in the Bush White House, and if the plan is approved, the tab will be paid with Iraqi oil revenues, Newsday reports.
Officially, the Administration claims that Iraqi oil revenue would play an important role during an occupation, but insists it would only be for the benefit of Iraqis, a National Security Council spokesman told Newsday.
But sources say oil revenues will pay the cost of any occupation.
"It [the oil] is going to fund the U.S. military presence there," an insider told Newsday Special Correspondent Knut Royce. "... They're not just going to take the Iraqi oil and use it for Iraq's purpose. They will charge the Iraqis for the U.S. cost of operating in Iraq. I don't think they're planning as far as I know to use Iraqi oil to pay for the invasion, but they are going to use it to pay for the occupation."
Another source Royce describes as having "worked closely with the office of Vice President Dick Cheney told him that a number of officials there too are urging that Iraq's oil funds be used to defray the cost of occupation.
That cost, according to the Congressional Budget Office could run as high as $48 billion a year, and officials think an occupation of Iraq could last 1-1/2 years or more.
And Iraqi oil could pick up a lot of that tab. Iraq's proven oil reserves are second in the world only to Saudi Arabia's, Royce reports. According to the budget office Iraq now is producing nearly 2.8 million barrels a day, with 80 percent of the revenues going for the United Nations Oil for Food Program or domestic consumption.
The remaining 20 percent, worth about $3 billion a year, comes from oil smuggling, and much of it goes to support Saddam's military. In theory that is the money that could be used for reconstruction or to help defer occupation costs.
"Yet with fresh drilling and new equipment Iraq could produce much more," Royce wrote. By it could take as much as 10 years to fully restore Iraq's oil industry, according to some estimates. And if Hussein torches the fields, as he did in Kuwait in 1991, it could take a year or more to resume even a modest flow. Laurence Meyer, a former Federal Reserve Board governor who chaired a Center for Strategic and International Studies conference in November on the economic consequences of a war with Iraq, told Royce that those who believe Iraq's oil could cover some of the occupation costs may be "too optimistic about how much you could increase [oil production] and how long it would take to reinvest in the infrastructure and reinvest in additional oil."
But the idea of using Iraqi oil to pay occupation costs has strong support among some inside the White House, a source told Royce.
"There are people in the White House who take the position that it's all the spoils of war," the source told Royce. "We [the United States] take all the oil money until there is a new democratic government [in Iraq]."
He added, however, that the Justice Department has urged caution. "The Justice Department has doubts," he said, adding that department lawyers are unsure "whether any of it [Iraqi oil funds] can be used or has to all be held in trust for the people of Iraq."
On the minus side, the use of Iraqi oil to pay for an occupation would convince many in the Mideast that the conflict is really all about control of oil, not about getting rid of Iraq's weapons of mass destruction, Halim Barakat, a recently retired professor of Arab studies at Georgetown University, warned Royce.
"It would mean that the real ... objective of the war is not the democratization of Iraq, not getting rid of Saddam, not to liberate the Iraqi people, but a return to colonialism," he said. "That is how they [Mideast nations] would perceive it."
But National Security Council spokesman Mike Anton assured Royce that should the U.S. invade and the occupy Iraq, the oil revenues would be used "not so much to fund the operation and maintaining American forces but for humanitarian aid, refugees, possibly for infrastructure rebuilding, that kind of thing."
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True, but the left has a field day with just about everything. I think this is an excellent idea.
How many countries in history are capable of doing what's right and getting the hell out?
I hope we don't need the "coalition" to do right by the US people.
The price we will pay in young lives is too great a cost already.
Where is it written that the victim has to bear the cost of aggression?
As for those US lawyers... got to be great lawyers, but dumb as a sack of rocks...
But I repeat myself.
Let them try to explain to the American people why THEY (we) should pay for this.
The plan should be scuttled. It is a world-class bad idea.
That is a plan. This other idea will do nothing good.
"CONSIDERS???" Just do it!
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