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msnbc.com

The American campaign to overthrow Iraqi President Saddam Hussein, even as al-Qaida’s terrorism thrives around the world and the national economy falters, has many people in America and abroad asking: What’s really motivating Washington to take on Saddam? His record of perfidy and willingness to inflict damage beyond his borders is a matter of record. For many, particularly in post-9/11 America, that is argument enough. But others believe that Saddam and his lust for ever more powerful weaponry is only part of the story. Largely missing from the debate is a simple fact: Iraq sits atop the world’s second-largest reserves of oil — a resource that translates into hundreds of billions of dollars and enormous economic power.

Within America, street protests accusing the administration of yearning to launch an “oil war” occur occasionally, but they pale in comparison to the vehemence of that charge in foreign capitals and newspapers. In European and Asian capitals, and in the restive Muslim world in particular, an “imperialistic quest for oil,” as Saddam himself frames it, is taken by many to be the ultimate goal of American policy toward Iraq. Even friendly Arab nations see it so. Al Ahram, the government-controlled newspaper of record in Egypt, led its editorial page recently with a piece by Palestinian-American Professor Edward Said, who wrote:

“Second to Saudi Arabia, Iraq has the largest oil reserves on earth, and the roughly 1.1 trillion dollars worth of oil — much of it already committed by Saddam to Russia, France and a few other countries ... is a crucial aim of U.S. strategy.”

‘Not a factor'
The Bush administration vigorously denies this. “It is not a factor,” President Bush’s press secretary, Ari Fleischer, said last month. “This is about preserving the peace and saving the lives of Americans.”

But evidence suggesting the opposite is easy to find. Early last month, for instance, as American diplomats twisted Security Council arms to win maximum maneuverability for a strike against Baghdad, the American undersecretary of commerce, Grant Aldonas, told a business forum hungry for good economic news that a war in Iraq “would open up this spigot on Iraqi oil, which certainly would have a profound effect in terms of the performance of the world economy for those countries that are manufacturers and oil consumers.”

Facts and figures
No reputable analyst denies the windfall that might result for Western energy firms and the economies they power from an extended American occupation of Iraq. While Iraq’s political landscape is complex and potentially explosive, many see a post-Saddam Iraq as an opportunity to ensure that Iraq’s vast potential as an oil supplier, long retarded by Saddam’s aggression and U.N. sanctions, can be used to stabilize or even lower world oil prices for decades to come.

“It is not necessarily easy, but the scenario exists whereby Britain and the United States, by handling Iraq’s oil resources a certain way, could carve out the ultimate ‘strategic petroleum reserve,’ ” says Dr. F.J. Chalabi, a former Iraqi deputy oil minister who left in 1976 and now runs an energy consulting firm in London. “It is certainly feasible.”

Such speculation about long-term American motives is bolstered by the deep ties between senior Bush administration officials, including the president and vice president, and the energy industry.

Among the facts that raise eyebrows:

The president, vice president and national security adviser all claim a stunning pedigree. Bush is a former director of Harken Energy Corp.; Cheney served as chief executive officer of Halliburton Energy Services Corp.; and National Security Council Director Condoleezza Rice served on the board of directors of Chevron, which later named a super-tanker after her.

Financial disclosure forms reviewed by the Center for Public Integrity, a non-partisan watchdog group, report that the top 100 officials in the Bush administration have the majority of their personal investments, almost $150 million, in the traditional energy and natural resource sectors. For instance, Rice holds $225,000 worth of Chevron stock in a blind trust.

Cheney’s commission on energy policy, which submitted a report last year recommending that the United States “conduct an immediate policy review toward Iraq” that includes “military ... assessments.”

Added to all this is a key geo-political fact of the post 9/11 world: America’s deep displeasure with Saudi Arabia, currently America’s largest oil supplier in the Middle East and the nation that, by and large, controls the world’s oil markets through its own enormous reserves and its lock on the internal politics of the oil cartel, OPEC — the Organization of Petroleum Exporting Countries.

Leveraging the resource
A war against Iraq may or may not happen, of course. Even if war did begin, there is no guarantee the United States would be able to prevent Iraq from sparking a larger Mideast conflict with its chemical or biological weapons, or from splintering into ethnic chaos in the scramble to divvy up what Saddam leaves behind.

The oil pipelineIraqi oil clearly is part of the discussion at the United Nations, where the Security Council is debating how to disarm Iraq. While the five permanent Security Council members — each of whom can veto any new Iraq resolution — reject the idea that oil is playing a role in their maneuvers, a three-way struggle has emerged. This competition pits Saudi Arabia and its OPEC allies, concerned about seeing their leverage diminished by a sudden deluge of Iraqi oil, against Russia, France and other Iraqi creditors, and finally the United States, which with its American oil companies would be perched in the cat-bird seat in a war that ousted Saddam from power.

“I think the French and the Russian ought to be told, not so much by the U.S., but by the Iraqi opposition to Saddam, that they are right on the edge of dealing themselves out of any hand in post-Saddam Iraq by the way they are trying to protect Saddam,” says James Woolsey, a former CIA director who has been a prominent voice in favor of toppling Saddam. “If the new Iraqi government should ask us for advice after Saddam, I think I would have a very hard time finding those French and Russian telephone numbers.”

Vested interests
Understanding this dynamic is essential to understanding the alignment of the Security Council. Russian and French oil companies have billions of dollars at stake if a post-Saddam Iraq tears up oil agreements and IOUs. Russia is owed some $8 billion dating to the 1980s, and is contracted to be the leading source of Iraq’s technical know-how and heavy equipment if U.N. sanctions are ever lifted.

“The Russians and the French may think that with a new government in Baghdad, they may lose the opportunity to have access to this really abundant and cheap oil,” says Chalabi. “Iraq is the only country in the world that could, conceivably, replace Saudi Arabia as the guarantor of world oil price stability. Given America’s feelings about Saudi Arabia right now, it is not hard to imagine how a U.S.-backed government will deal with oil policy.”

America's oil giants
Sitting on the sidelines ever since the United Nations slapped sanctions on Iraq in 1990 are the giant American oil companies, which have watched enviously over the past decade as Saddam signed deals with Russian, Chinese, European and other firms to exploit new oil fields once sanctions are lifted.

Oil industry representatives largely declined to talk on the record, because, an official at one company explained, the industry is horrified at the prospect of being associated with talk of war in Iraq.

But privately, industry leaders are furious at the accusation that, somehow, they are part of a pro-war conspiracy.

“To argue that Bush is driven by his history in the oil industry is just silly,” said an officer of one industry trade group, who spoke on condition of anonymity. “It just doesn’t add up. It’s not how it works.”

Industry leaders said that if anything, freeing up Iraq’s estimated 112 billion barrels of crude oil for export would damage their bottom lines. They said there is no shortage of oil and that Iraq’s reserves would flood the market, further driving down demand and, with it, prices.

A new day?
That is hardly the consensus among independent analysts. Samer Shehata, a Middle East expert at the Center for Contemporary Arab Studies in Washington, notes that well before Sept. 11, 2001, the Bush administration was pushing “to make energy security a priority of our trade and foreign policy,” as the President’s National Energy Policy report said.

“Russia, China, France have the highest stakes in the Iraqi oil industry,” Shehata said. “Once Saddam is out, everything becomes null and void and there is no legal authority to enforce those claims.” Then, she said, “the U.S. oil industry will post a major challenge to Saudi Arabia’s position as market leader.”

Over the next week, MSNBC.com will explore each side of this complex story. In a series of reports from around the world, our correspondents will look at:

Russia’s drive to guarantee its interests in Iraq while setting itself up as a viable alternative source of oil for the United States as Washington seeks to reduce its dependency on the Middle East.

The stakes for American oil companies, which have relied for price stability on an accommodation with the Saudis for three decades but now appear to be positioning themselves for maximum benefit if the ground suddenly shifts.

The dilemma facing the Saudis, whose relationship with the United States is in tatters after Sept. 11 but who will fight furiously to maintain their hold on world oil markets.

The frustration of American environmentalists, who say the political system is rigged to ensure that, regardless of the costs, oil and other fossil fuels remain the country’s energy of choice despite the promise of other energy sources to wean America from its foreign dependency.

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