On April 5, 2003, Reuters reported that the State Department's "Future of Iraq" project headed by Thomas Warrick, special adviser to the Assistant Secretary of State for Near Eastern Affairs, held its fourth meeting of the oil and energy-working group.
Documents obtained by Reuters showed that "a clear consensus among expert opinion favoring production-sharing agreements to attract the major oil companies."
"That is likely to thrill oil companies harboring hopes of lucrative contracts to develop Iraqi oil reserves," the news agency reported. "Short-term rehabilitation of southern Iraqi oil fields already is under way, with oil well fires being extinguished by US contractor Kellogg Brown and Root ...
"Long-term contracts are expected to see US companies ExxonMobil, ChevronTexaco and ConocoPhillips compete with Anglo-Dutch Shell, Britain's BP, TotalFinaElf of France, Russia's LUKOIL and Chinese state companies."
After US troops captured Baghdad in April 2003, they were ordered to protect the Oil Ministry even as looters ransacked priceless antiquities from Iraq's national museums and stole explosives from unguarded military arsenals.
Unacceptable Options
In April 2001, the report laid out a series of unacceptable options, including helping Iraq under Saddam Hussein extract more oil by easing embargoes that were meant to hem Hussein in.
"The US could consider reducing restrictions on oil investment inside Iraq," the report said. But if Hussein's "access to oil revenues was to be increased by adjustments in oil sanctions, Saddam Hussein could be a greater security threat to U.S. allies in the region if weapons of mass destruction, sanctions, weapons regimes and the coalition against him are not strengthened."
Iraq is a "key swing producer turning its taps on and off when it has felt such action was in its strategic interest," the report said, adding that there was even a "possibility that Saddam Hussein may remove Iraqi oil from the market for an extended period of time" in order to drive up prices.
"Under this scenario, the United States remains a prisoner of its energy dilemma, suffering on a recurring basis from the negative consequences of sporadic energy shortages," the report said. "These consequences can include recession, social dislocation of the poorest Americans, and at the extremes, a need for military intervention."
The report recommended Cheney move swiftly to integrate energy and national security policy as a means to stop "manipulations of markets by any state" and suggested that his task force include "representation from the Department of Defense."
"Unless the United States assumes a leadership role in the formation of new rules of the game," the report said, "US firms, US consumers and the US government [will be left] in a weaker position."
Two years after the Baker report, the United States - along with Great Britain and other allies - invaded Iraq. Now, more than six years later, the US oil industry finally appears to be in a strong position relative to Iraq's oil riches.
However, the price that has been paid by American troops, Iraqi civilians and the US taxpayers has been enormous.
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