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 lifeline.
26 March 7.30pm BBC2
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.
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.
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
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.
70's the rate dropped to about 35 billion barrels
while the industry
concentrated on the North Sea. In the 80's it was
turn, and the discovery rate dropped to 24 billion.
even further in the 90's as the industry concentrated
on West Africa but only found some
14 billion barrels.
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%
That 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.
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.
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
George Bush took power two years ago, his administration
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
"It 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
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 Iraqi
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
will make sure that Iraq’s natural resources
are used for the benefit of their owners, the Iraqi
people," President Bush told the world.
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.
Whatever happens, rebuilding Iraq will be a huge job and
only US companies have been invited to bid for
leader 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 politics."
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
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
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 suffer.