Few lies have wound up injuring Americans more—in everything from automobile gas tanks and winter heating bills to diminished U.S. global standing—than a rarely revisited three-year-old fib-fest involving George W. Bush, Donald Rumsfeld, and Tony Blair. Since World War I, history is clear: the British and Americans have been pre-occupied with only one thing in Iraq—oil. Yet in 2003, as their troops again disembarked, the pretense was all about good and evil, democracy and freedom. The disastrous outcome of the unacknowledged Middle Eastern mission, the struggle for petroleum, has rarely been discussed.

In part, that’s because a credulous press has swallowed an extraordinary fraud. Speaking on behalf of George W. Bush, then White House Press Secretary Ari Fleischer insisted in February 2003, “If this had anything to do with oil, the position of the United States would be to lift the sanctions so the oil could flow. This is not about that. This is about saving lives by protecting the American people.” In November 2002, Defense Secretary Donald Rumsfeld had likewise declared, “it has nothing to do with oil, literally nothing to do with oil.” On the other side of the Atlantic, British Prime Minister Tony Blair told Parliament in early 2003, “Let me deal with the conspiracy theory that this has something to do with oil. There is no way whatever that if oil were the issue, it wouldn’t be simpler to cut a deal with Saddam Hussein.”

Horse manure. In the run-up to war, from Alberta to Texas, oilmen gossiped about the centrality of oil. Meetings of petroleum geologists buzzed about the so-called “peak oil” forecast that a dangerous top in global production was only a decade or two away. Specialized publications guesstimated how much taking over Iraqi oil could mean for profits and Exxon and Chevron. Polls of ordinary citizens from Europe to Latin America and the Mideast produced similar findings: people thought the invasion was about oil.

The Gulf War in 1991 certainly had been. When the first President Bush went into the Persian Gulf in force that year, it was indeed about petroleum. He openly stated, “our jobs, our way of life, our own freedom and the freedom of friendly countries around the world would all suffer if control of the world’s great oil reserves fell into the hands of Saddam Hussein.” The idea that Saddam Hussein was a second Hitler was a rhetorical embellishment. Back during the Cold War, even when Washington worried about the Soviet Union rolling into Iran and reaching the Persian Gulf, American concern arose out of the geopolitics of oil, not some abstract commitment to representative government and democracy.

The British had indulged their own motivational buncombe in the aftermath of the First World War when the Marquess of Curzon, Britain’s foreign secretary, said that the influence of oil in the new boundaries drawn for Iraq was “nil.” “Oil,” he said, “had not the remotest connection with my attitude, or with that of His Majesty’s Government, over Mosul.” By 1924, as the British agreed to cut American oil companies in for a share of Iraq’s oil production, the centrality of oil was obvious. Curzon’s claim that London sought to bring freedom and self-government to the Arabs was mocked in Parliament and on Fleet Street.

But that was 80 years ago, and today’s opinion-molding elites—in the United States, at least—are far more gullible. Too many are still psychologically embedded in the hard-charging pretense that surrounded the 2003 U.S. military incursion. The revelation that Saddam’s much trumpeted weapons of mass destruction seem not to have existed has yet to lead to the next logical re-evaluation: just how much more credibility should be given to the three sweeping “it wasn’t about oil” assurances quoted earlier? After all, if oil was involved, then the U.S. disaster in Iraq, doubly bungled, represents the greatest wartime failure since James Madison let the British burn Washington in 1814.

Vice President Dick Cheney, the one top official who avoided denying that oil had anything to do with the Iraq invasion, is precisely the man whose attentions must be examined to illustrate the depth of oil motivations. In 1999, when Cheney was still the head of Halliburton, the oil-services giant, he made a shrewd speech to the London Institute of Petroleum in which he gloomed over coming oil-supply problems: “By some estimates, there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a 3 percent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional 50 million barrels a day.”

Those barrels would have to come largely from the Middle East, and a few years earlier the Wall Street Journal had reported an Anglo-American oil company consensus: that Iraq, specifically, was “the biggie” in terms of potential future reserves. During 2001, the energy task force that became Cheney’s first major assignment as vice president spent much time poring over maps of the oilfields in Iraq and the rival nations—China, Russia, and France among them—to whom Saddam Hussein intended to give the concessions for development. Part of Cheney’s mandate involved “actions regarding the capture of new and existing oil and gas fields.”

This was getting down to the primal underpinnings of the 2003 invasion. According to Paul Roberts in his 2004 book The End of Oil, Cheney and his task-force colleagues

    pored over maps of Iraqi oilfields to estimate how much Iraqi oil might be dumped quickly on the [post-invasion] market. Before the war, Iraq had been producing 3.5 million barrels a day, and many in the industry and the administration believed that the volume could easily be increased to 7 million by 2010. If so—and if Iraq [under U.S. control] could be convinced to ignore its OPEC quota and start producing at maximum capacity—the flood of new oil would effectively end OPEC’s ability to control prices.

The Anglo-American firms, in turn, would be in the catbird’s seat.

As for the supposed weapons of mass destruction, these had already played a crucial role. The United Nations sanctions imposed in the early 1990s included provisions that Saddam could not sign over development of the big Iraqi oilfields to foreign companies. On one hand, this gave the French, Russians, and Chinese an incentive to get Iraq out from under the sanctions. But on another, the key allegations that enabled the U.S. and Britain to keep sanctions in place were—what else?—Saddam’s alleged weapons of mass destruction. Without WMD, the sanctions would have fallen away, and the rivals of the U.S. and Britain would have gotten the “biggie” oilfields.

In short, the weapons of mass destruction drumbeat was substantially tied to oil and had already done its essential job by the time the invasion took place. Accept this logic and it makes mincemeat out of the Bush-Rumsfeld-Blair pretense.

The cynic will say, yes, but why could Bush and Rumsfeld not talk a little bit about oil just as the first Bush had prior to the Gulf War? Strategically, there were major differences. In 2003, there was no Kuwait to liberate as a justification for tangling with Saddam. This time it was a flat-out invasion to topple Saddam and take control. Admitting that oil was a principal motivation would have lost the public-relations battle not just in the Middle East but around most of the world. The administration had to have some larger, more noble rationale, and the war on terror offered a broad umbrella. At every opportunity, officials of the Bush administration, not least the president himself, tried to tie Saddam Hussein to terrorism and, indirectly, even to 9/11.

Furthermore, the White House had to consider the huge religious and biblical element of the coalition that elected Bush in 2000. Newsweek polling back in 1999 found that 45 percent of American Christians believed in Armageddon and the end times, and almost as many thought that the Antichrist was already alive and on the earth. Because such beliefs concentrate among very pro-Bush evangelicals, fundamentalists, and Pentecostals, my estimate is that some 55 percent of the people who voted for Bush in 2000 would have told pollsters about believing in the end times and Armageddon.

This will strike many as an exaggeration, but the phenomenon is an important one. Richard Cizik of the National Association of Evangelicals noted in 2003 that since the break-up of the USSR, “evangelicals have substituted Islam for the Soviet Union. The Muslims have become the modern-day equivalent of the Evil Empire.” According to University of Wisconsin historian Paul Boyer, by the 1990s many prophecy believers saw Saddam as the Antichrist or his forerunner, partly because Saddam was rebuilding the ancient evil city of Babylon. The Left Behind series by Tim LaHaye fictionalized the Rapture-Tribulation-Armageddon sequence so successfully that it sold a whopping 60 million copies in book and tape form. Most of the readers were Bush backers.

Politically, this confronted the White House with both a strategic dilemma and a parallel opportunity. On the plus side, the huge chunk of Bush voters would want to view the U.S. attempt to topple Saddam Hussein in terms of the war of good versus evil. Weapons of mass destruction were a prop but collateral to the larger biblical context. Invading Iraq would evoke that context because Saddam was one of the evil ones—maybe the Evil One, given his Babylon tie-in. Toppling him could aspire to biblical interpretation. Aiding Israel was also biblically vital. Bush had already carved out a related, overarching “good versus evil” posture with his heavily religious post-9/11 rhetoric.

The minuses were fewer but cautionary. It was fine for the White House to criticize the United Nations because the international body was a favorite whipping post among the high-octane preachers given to quoting the Book of Revelation. Oil, however, wasn’t part of the biblical prophecy framework. In LaHaye’s series, petroleum was a minor strategic gambit of the Antichrist, not the business of the good guys. Oil’s increasing centrality was a bad sign on the websites of omen-counters like raptureready.com.

Maybe this had something to do with the Bush-Rumsfeld-Blair posture of oil not being at all involved and maybe it didn’t. However, the rhetorical fact remains: oil-related motives and objectives were insistently forsworn, even if they were prominent—especially in Dick Cheney’s petroleum-savvy mind. Many Americans think his task force has been kept wrapped in secrecy because large oil companies were closely involved, but keeping oil-related war motivations hidden may have been even more vital.

If the Americans and British did act substantially for oil—and that seems highly likely—then it is fair to judge the Iraqi failure by oil-policy yardsticks and outcomes. The quick summation, obviously, is that whereas oil was selling at roughly $30 a barrel in 2002 as the White House was plotting its invasion and occupation, by late 2004 it cost a more painful $40 per barrel. By the time the operation was marking its third anniversary this spring, petroleum was flirting with $75 a barrel.

There is no room in this article to document that prior to the U.S. invasion in 2003, everything about Iraq (and neighboring Kuwait) generally boiled down to oil. Suffice it to say that Iraq’s new boundaries were drawn around oil after World War I; Axis forces invaded from Syria in 1941 in pursuit of petroleum; important Persian Gulf surveys generally concentrated on oilfields; the maps Cheney looked at in 2001 were about oil; and on entering Baghdad in 2003, the first government building U.S. troops occupied was the Oil Ministry, with its seismic maps of the rich Iraqi oilfields.

Anglo-American politics had also become increasingly shaped by oil. The Bush administration marked the first time that both the president and the vice president hailed from the oil industry. British Prime Minister Tony Blair, in turn, was so close to British Petroleum that wags called BP “Blair Petroleum.”

Besides, if oil had nothing to do with the invasion, why did top officials of the Bush administration mention it in predicting how well the invasion would work out? Cheney opined that by the end of 2003, Iraqi oil output would hit 3 million barrels a day, and Lawrence Lindsey, the White House economic adviser, talked about 3-5 million, saying in September 2002, “the key issue is oil, and a regime change in Iraq would facilitate an increase in world oil” so as to drive down prices. Paul Wolfowitz, Rumsfeld’s deputy in the Pentagon, enthused that increased Iraqi oil revenues could pay for the war. And White House speechwriter David Frum wrote in his 2003 book on Bush that the war on terror was designed to “bring new stability to the most vicious and violent quadrant of the earth—and new prosperity to us all, by securing the world’s largest pool of oil.”

The best way to assess the oil-related outcomes—all bungles, no boons—is to use three different yardsticks: postwar oil supplies and prices; recrimination against the U.S. dollar; and the rising portion of U.S. defense outlays that had to be spent on protecting land and deep-water oilfields, pipelines, and sea lanes vital to oil tankers.

The administration’s hope that a quick and overwhelming victory in Iraq would unleash enough new oil production to flood the markets and undercut OPEC, however absurd in retrospect, tantalized traders during the invasion weeks. On March 21, 2003, the Financial Times noted, “futures prices suggest that when it is over, OPEC will shower the world with crude and the price will fall out of its $22-28 band late next year.”

Instead, occupied Iraq turned into a quicksand of guerrilla and sectarian rivalry. Insurgents attacked and disrupted pipelines and refineries, and truck drivers refused to transport oil from the north. During the winter of 2005-2006, Iraqi production dropped as low as 1.1 million barrels a day, and covering this production gap took almost all of OPEC’s spare capacity and forced prices higher. Dalton Garis, an economist at the Petroleum Institute in Abu Dhabi, told the Associated Press in April 2006, “Iraq could be making a tremendous difference.” Instead, its shortfall is “a significant contributing factor to the high price of oil.”

American economists Joseph Stiglitz and Linda Bilmes, in a draft paper entitled “The Economic Costs of the Iraq War: An Appraisal Three Years After the Beginning of the Conflict,” reached a similar but much more detailed and buttressed conclusion. Publicly, Stiglitz and Bilmes attribute $5-10 of the increased per barrel cost of oil to the mess in Iraq, but their private view seems to be that a very large portion of the now $45-per-barrel oil-price increase is attributable to Iraq.

That makes sense if one considers the hostile reactions of many of the world’s oil-producing nations to the behavior the Bush administration was exhibiting in Iraq and elsewhere. For several years prior to the 2003 invasion of Iraq, that nation had been insisting—contrary to global policies in effect since the 1970s—that it would price its oil sales in euros, not dollars. Other major OPEC producers—Venezuela and Iran—also began talking about kindred moves and so did elements of the European community. Just after the U.S. invasion, Newsweek’s Howard Fineman wrote that the real clash was not over weapons of mass destruction but over the dollar versus the euro—“who gets to sell—and buy—Iraqi oil, and what form of currency will be used to denominate the value of the sales … yet another skirmish in a growing economic conflict.” Few others had the courage to raise the issue.

Had a U.S. triumph in Iraq enabled Washington to control and open the oil spigots in Iraq, OPEC would have been obliged to desist from talking about dropping the dollar to price oil in euros or a so-called basket of currencies. But as the various dimensions of U.S. failure became clear in 2003 and 2004, other nations—Indonesia, Malaysia, and Russia (not an OPEC member)—began to show their currency claws. Six months after the U.S. invasion, as Iraqi oil output shrank in the face of relentless sabotage of pipelines and other facilities by insurgents, even Saudi Arabia displayed its disdain, not by currency actions but by giving a big gas-development contract to French Total instead of ExxonMobil.

As of 2006, the U.S. dollar has been dropping again, with the ever more conspicuous failure of Bush administration energy policy—this year the U.S. will spend $300-350 billion on imported oil—a significant backdrop. Should these trends intensify and OPEC cease to price oil in dollars, the added burden on Americans will register in everything from home heating oil in northern winters to the prohibitive cost of long-distance driving in the remote exurbs of metropolitan commuter belts. The effects of the great bungle in Iraq may only be beginning.

Still another oil cost-burden that the Iraqi failure imposes on the American people involves the huge and finally starting to be noticed portion of U.S. defense outlays that are undertaken to protect foreign oil supplies from disruption. Michael Klare, a leading U.S. scholar on resource wars and oil geopolitics, has tabulated oil-related tasks being assumed by the military from South America and West Africa to the Persian Gulf, Central Asia, and the Straits of Malacca. His conclusion: the military “is being used more and more for the protection of overseas oil fields and the supply routes that connect them. … Such endeavors, once largely confined to the Gulf area, are now being extended to unstable oil regions in other parts of the world. Slowly but surely, the U.S. military is being converted into a global oil-protection service.” How much do these tax-financed costs effectively add to the price of a gallon of gas or heating oil sold in the U.S.—25 cents, 40, 85?

In sum, the energy-related price of the administration’s dishonesty and massive miscalculation in Iraq ought to be a central discussion point in this election year and again in 2008. The citizenry has to comprehend just how much is at stake and how the nation’s future has been jeopardized.

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Kevin Phillips’s latest book, American Theocracy: The Perils and Politics of Radical Religion, Oil, and Borrowed Money, was published in March by Viking Penguin.