of war insist it's not about oil. But global oil
production is on the brink of terminal decline and when
the West begins to run short of supplies - could be a
March 7.30pm BBC2
After World War I,
the oil companies carved up Iraq. Shell, BP, Exxon and
Total all had stakes in the Iraq Petroleum Company. They
paid pennies for each barrel of oil and built a pipeline
to take it away.
In 1972 the Iraqis
nationalised the industry and threw the foreigners out.
From then on Western oil companies could only dream of
Iraq’s oil reserves - the second largest in the world.
With Saddam Hussein
came decades of war followed by sanctions and Iraq's
massive reserves lay largely untouched. But with
Hussein's regime under threat, at last there was a
chance to get back in.
It's not greed
that’s driving big oil companies - it's survival. The
rate of oil discovery has been falling ever since the
1960's when 47 billion barrels a year were discovered,
mostly in the Middle East.
In the 70's the
rate dropped to about 35 billion barrels while the
industry concentrated on the North Sea. In the 80's it
was Russia’s turn, and the discovery rate dropped to 24
billion. It dropped even further in the 90's as the
industry concentrated on West Africa but only found some
14 billion barrels.
In America, always
the greediest consumer of oil, production has been
falling for 30 years. Americans guzzle 20 million
barrels of oil a day, but now they have to import over
60% of it.
pattern is being repeated elsewhere. Geologist Dr Colin
Campbell predicted a decline in the North Sea
several years ago and claims by 2015 Britain may have to
import over half its oil needs. "In 1999 Britain went
over the top and is declining quite rapidly," he says.
"It's now 17% down
in just three years, and this pattern is set to
continue. That means that Britain will soon be a net
importer, imports have to rise, the costs of the imports
have to rise, and even the security of supply is
becoming a little uncertain," Campbell adds.
In Norway the
government forecasts that in the next ten years its
North Sea production will halve. In Argentina oil
production has been down for several years and in
Columbia, which was a big producer in the 90's,
production is now past its peak.
When George Bush
took power two years ago, his administration was already
worried about the vulnerability of America’s oil
supplies - the buzzword was ‘energy security’.
"I think it’s quite
possible that the United States realises the key
importance of the Middle East generally to world supply
in fact, and especially its own, and that it sees Saddam
Hussein as a ready-made villain," points out Campbell.
finds this a convenient way in which to establish a
military presence in the Middle East -
aimed partially at Iraq by all means but with a wider
significance to control the production elsewhere there."
The US pushed its
allies hard to support military action against Iraq.
With resolution 1441 last November they seemed to be
making progress. But in December America’s energy
security took yet another turn for the worse. Venezuelan
oil workers went on strike and oil prices soared -
hitting $35 a barrel.
Iraqi oil for
As preparations for
war gathered pace there were massive demonstrations
around the world. The widespread view that it was all
about oil worried the US and British governments so much
that they came up with a plan - they would safeguard
Iraq’s oil for the Iraqi people.
"We will make sure
natural resources are used for the benefit of their
owners, the Iraqi people," President Bush told the
But even if the
post-Saddam regime retains control of oil exports, at
least the boost in Iraqi output will provide a growing
supply to the West.
For a war supposedly not about oil, military
planners made a high priority of securing the oilfields.
Apart from a handful of wells torched by Iraqi troops,
the huge southern oilfields were taken largely intact.
But other major oil-producing regions are still in Iraqi
hands and there is still a danger that, as in Kuwait 12
years ago, massive sabotage may hit oil production for
years to come.
rebuilding Iraq will be a
huge job and only US companies have been invited to bid
Dr Salah Al-Shaikhly, of the Iraqi National Accord,
admits Britain and America will benefit from helping
remove Saddam. "Well definitely those who have helped
us, all along, with regime change. Obviously they should
have a little edge over the rest. I think even in
economics, this is quite acceptable… as well as the
But even if Iraq
does boost its oil production ironically the effect
could be short lived. Its vast reserves represent just
four years of world consumption and by the time Iraqi
oil is flowing freely, global oil production may already
be in terminal decline.
Campbell thinks the
decline will start by 2010. "It starts with a price
shock due to control of the market by a few countries,
and it is followed by the onset of physical shortage,
which just gets worse and worse and worse," he says.
So if alternatives
to oil are not found soon the changes could be radical.
Unlimited use of cars and cheap flights around the world
may well be a thing of the past. While international
trade - the very basis of the global economy - will