iraq war yergin
WAR IN IRAQ
In late 2002, Philip Carroll received a phone call from an official in the Pentagon. The Department of Defense was putting together an advisory group on oil, and Carroll was a sensible stop. Twice retired—first as CEO of Shell Oil USA and then the engineering company Fluor—Carroll came equipped with considerable international experience in the logistics and infrastructure of energy supply, as well as a reputation for diplomatic skill.
The questions were about how and what to plan for, in terms of oil, in the event of war. Two things were known: Iraq was highly prospective but had not really been explored since the 1970s and indeed was one of the least explored of all the major oil-exporting countries. And its industry was in poor condition, although no one really knew how poor. Carroll recommended that the DOD do an in-depth study and think through how the industry could be managed during postwar transition. A few months later, in early 2003, Carroll was formally asked if he would go out to Iraq as oil adviser following U.S. military action. He would become one of about twenty other senior advisers, each to advise and help direct an Iraqi ministry. By that time it was more than clear that the United States, along with Britain, Australia, Japan, and a score of other nations, in what was called “the coalition of the willing,” would shortly be going to war.
WHY THE WAR?
Iraq was an oil country. Its only export was oil. It was a nation defined by oil, and as such was a country of great significance to the global energy markets. But the ensuing war was not about oil. It resulted from a convergence of factors: the primary ones were the September 11, 2001, attack and its consequences, the threat of weapons of mass destruction, the way the 1991 war ended, the persistence of Saddam’s intransigent and ruthless rule, and the way in which analysis was, and was not, carried out.
Saddam had an “addiction to weapons of mass destruction,” as the head of the U.N. weapons inspection program put it on the eve of the war. For decades the Iraqi dictator had devoted a significant part of the country’s resources to the development of chemical, biological, and nuclear weapons. Despite his agreements with the United Nations after the Gulf War, both Western and neighboring countries believed that Saddam was continuing to develop WMD and that, if not restrained, would indeed acquire them. For instance, a 1998 National Intelligence Estimate reported that while Iraq’s WMD capability had been damaged by the Gulf War, “enough production components and data remain hidden and enough expertise has been retained or developed to enable Iraq to resume development and production of WMD . . . Evidence strongly suggests that Baghdad has hidden remnants of its WMD programs and is making every effort to preserve them.”
For the war planners, the likely use of such weapons by the Iraqi regime was a central factor in military planning, right up to and into the war itself, when, as a result of intercepted signals, some units carried bulky, cumbersome masks, impermeable gowns, and individual antidotes for chem-bio attacks. The postwar failure to find WMD capabilities, despite much effort, undermined the credibility of the decision making in the eyes of many. Some parts of the U.S. intelligence community—notably the State Department’s Bureau of Intelligence and Research and some in the CIA—had dissented, arguing the view that Saddam was probably still not pursuing the weapons but their arguments were discounted. The general view was that Saddam certainly was acting on his addiction. And there was within the U.S. intelligence community, the Middle East National Intelligence Officer Paul Pillar wrote, “a broad consensus that such programs existed.” There was, however, no agreement on their scale, timing, effectiveness, and utility.1
France and Germany—along with Russia—opposed the decision to go to war at every step. French president Jacques Chirac emerged as a particular foe to supporters of war, stating that “nothing today justified a war,” and that there was, in his view, “no indisputable proof ” of weapons of mass destruction. But Chirac was reflecting the view of the French intelligence service. “We had no evidence that Iraq had weapons of mass destruction,” recalled a senior French policymaker. “And we had no evidence that it did not. It may be that sanctions had worked much better than we had thought.”2
But Saddam made several miscalculations. He thought that the scale of the antiwar demonstrations in Europe would somehow ensure that the coalition would not actually invade. In what proved to be a massive miscalculation, he chose to convey ambiguity as to what he was doing about such weapons—and what he was covering up. To do otherwise, he apparently thought, would have weakened his regime vis-à-vis both Iran and domestic opponents. As he told his inner circle, “The better part of war was deceiving.” To an interrogator after the war, who asked him why the illusion, he had a one-word reply: Iran.
There was also the matter of assuming that others saw the world the way he did. It has been suggested that Saddam could never have believed that the 1991 coalition would have stopped short of Baghdad for something so mushy as the “CNN effect” on television viewers around the world and because of the fear of splintering the coalition. He would not believe it because he would not have acted on such reasons. It had to be because they feared that he had equipped his forces with chemical and biological weapons for the final defense of Baghdad. This was a very compelling reason to maintain the illusion.3
From the coalition side, there was good cause to proceed on a worst-case assumption: in the aftermath of the First Gulf War, it was discovered, with some shock, that the Iraqi regime was six to eighteen months away from a crude nuclear weapon. In retrospect, had Saddam not been so hasty but instead waited to invade Kuwait until 1993 or 1994 rather than 1990, he would have been in a much stronger position—equipped with some kind of nuclear weapon capability, and operating in a much tighter world oil market. All this would have reduced the flexibility of his opponents.
With the United States’ having underestimated Saddam’s capabilities once, the Bush administration was not going to repeat that mistake. There was all the more reason for such a response given 9/11 and in light of Saddam’s evident appetite for WMD and his hunger for revenge after 1991. Laura Bush later wrote of her husband, “What if he gambled on containing Saddam and was wrong?” Bush himself said, “That was not a chance I was willing to take.” This gamble seemed all the more risky in the state of permanent anxiety and tension that followed 9/11: after the attacks, a daily litany of reports flowed into the U.S. government about plots and attacks prevented, which only added to the constant apprehension about those plots that might not be nipped in time. “ We lived with threat assessments more disturbing than any ever spoken on the air,” said Laura Bush.
As a senior State Department official wrote to Secretary of State Colin Powell prior to the war, “September 11 changed the debate on Iraq. It highlighted the possibility of an Iraqi version of September 11, and underscored concerns that containment and deterrence will be unable to prevent such an attack.” Some argued that Iraqi intelligence had direct links to, and had perhaps even coached, Al Qaeda. Others said that such a link was highly dubious, indeed unlikely, and certainly unsubstantiated. “The intelligence community never offered any analysis that supported the notion of an alliance between Saddam and al Qaeda,” said Paul Pillar, the national intelligence officer. But that did not mean that, under the premise of “the enemy of my enemy is my friend,” there could not be cooperation in the future given their common enmity toward the West.4
Iraq was already at the top of the agenda of some of the senior policymakers prior to their taking office in the administration of George W. Bush. A policy review of options related to Iraqi sanctions had been launched in the summer of 2001. A few days after 9/11, at a meeting of President Bush with his senior advisers at Camp David, some sought to add Iraq as a target for counterattack, alongside Al Qaeda and Afghanistan. At that point Bush was firm in his rejection. In early October 2001, the U.S. ambassador to the United Nations was instructed to read “the toughest message I’d ever been asked to deliver” to Iraq’s ambassador, warning of the dire consequences for Iraq if it tried to take advantage of the 9/11 attacks. But it was not until 2002, fueled with the confidence from what seemed to be the very successful and very short campaign to evict the Taliban from Afghanistan that plans really began to congeal around a war with Iraq. And, in the aftermath of 9/11, it was going to be a preventative war—launched under what became known as the policy of preemption.5
To the inner circle of decision makers, 9/11 demonstrated the risks of not acting in advance to prevent Saddam’s acquisition of such weapons. Vice President Dick Cheney, who had been secretary of defense during the Gulf crisis, was central to the Iraq decisions. “As one of those who worked to assemble the Gulf War coalition,” he said in 2002, “I can tell you that our job then would have been infinitely more difficult in the face of a nuclear-armed Saddam Hussein.”
President Bush laid out the fundamentals of the new policy in a speech at West Point in June 2002. Traditional “deterrence” did not work against “shadowy terrorist networks.” And “containment” did not work “when unbalanced dictators with weapons of mass destruction can deliver these weapons on missiles or secretly provide them to terrorist allies.” The only answer was “preemptive action,” Bush added, “if we wait for threats to fully materialize, we will have waited too long.”
There was also a conviction among some that the existing political systems and stagnation in the Middle East were the breeding grounds for the likes of Al Qaeda and terrorism. A “new” Iraq could be the beginning of the answer. The skillful and clever Iraqi émigré Ahmed Chalabi, claiming to speak both for the exile community and those within the country, convinced some policymakers that an Iraq without Saddam would welcome the coalition as liberators and would quickly embrace representative democracy. These decision makers were convinced that “a pluralistic and democratic Iraq” would have a transformative effect in the Middle East, and in something akin to the fall of communism, set off a process of “reform” and “moderation” throughout the region.6
Contrary intelligence and analyses that did not fit this vision were pushed aside. Moreover, after thirty-five years of Baathist dictatorship, some could argue that, in any event, not much was really known about such “facts on the ground” as religious cleavages, sectarian rivalries, the importance of tribal loyalties, and the role of Iran. Those who did know something about these details, or who questioned the basic policy convictions, or who warned that these assumptions were too optimistic, were progressively squeezed out of the decisionmaking process.
The shock of 9/11 created a determination to demonstrate the strength of the United States, reassert a balance of power, and seize the initiative. There was also the desire to finish the “unfinished business” of 1991. After the 1991 Gulf War, Saddam conducted a brutal war against the disenfranchised Shia, which might have been prevented had the armistice not permitted Saddam’s forces to use helicopters in the south.
Some critics said that the war was conducted for the benefit of Israel. The elimination of Saddam’s military power would certainly be a boon for Israel, on which Iraqi Scud rockets had rained during the 1991 Gulf War. But Saddam was already contained and his military much weakened. Israel was much more worried about the Iranian nuclear program. As Richard Haass, the head of policy planning in the State Department, wrote, “The Israelis did not share the administration’s preoccupation with Iraq. Actually, it was just the opposite. The Israelis . . . feared that Iraq would distract the United States from what they viewed as the true threat, which was Iran.” Both Israeli officials, including the minister of defense, who happened to be Iraqi-born, and Israeli experts warned that the administration was greatly underestimating the postwar troubles that would await them in Iraq. As one of Israel’s leading specialists put it at a prewar conference in Washington, D.C., someone needed to tell the U.S. president that American forces would have to be in Iraq for up to five years and “they will not have an easy time there.”7
“OIL”
Oil did not play the same role as these other factors in defining policy. The significance of oil was because of the nature of the region—the centrality of the Persian Gulf in world oil and thus the critical importance of the balance of power in that region. It had been determined U.S. policy since Harry Truman to prevent the Persian Gulf and its oil from falling under the sway of a hostile power. But the possibility of a hostile power—Iraq—achieving dominance in the region, and thus over the region’s oil, loomed much larger during the Gulf crisis of 1990–91, when Iraq had conquered Kuwait and was threatening the Saudi oil fields, than in the run-up to the subsequent Iraq War. At the same time, in 2003, neither the Americans nor the British were pursuing a mercantilist 1920s-style ambition to control Iraqi oil. The issue was not who owned the oil at the wellhead, but whether it was available on the world market. Iraqi oil could be purchased on the world market, albeit managed under the U.N. sanctions program. Indeed, in 2001 the United States imported 800,000 barrels per day from Iraq. A democratic Iraq, it was certainly thought, would be a more reliable provider and, not being under sanctions, could expand its capacity. In the minds of some policymakers, noting the number of Saudi nationals involved in 9/11, the prospect of Iraq’s becoming a much larger exporter that would counterbalance Saudi Arabia was attractive, but this was far from a wellshaped—or well-informed—strategic objective.8
While a variety of ideas were being tossed around for the postwar organization of the industry, the clear policy determination was that the decisions about the future of Iraq’s oil would be made by a future Iraqi government. Nothing should be done to prejudice the prerogatives of the eventual government—even including the subject of OPEC membership—although a nongovernmental oil industry was seen as highly preferable in order to facilitate the introduction of the technology and the tens of billions of dollars of investment that the industry would need. Even in that case, however, a liberated Iraq, with its strong nationalist tradition, was likely to offer terms to investors that were as tough as those of any other petroleum-exporting countries, or tougher.
As war approached in 2002–3, the dominant attitude among the major international oil companies was one of skepticism and caution, and some alarm over the entire idea of war. Many of them were familiar with the region and feared a backlash. They were very doubtful that a stable, peaceful, new-style democracy could be quickly created from the wreckage of the Baathist state.
“You know what I’ll say to the first person in our company who comes to us with a proposal to invest a billion dollars in Iraq?” asked the CEO of one of the supermajors a month before the war. “I’ll say, ‘Tell us about the legal system, tell us about the political system. Tell us about the economic system and about the contractual and fiscal systems, and tell us about arbitration. And tell us about security, and tell us about the evolution of the political system. Tell us all those things, and then we’ll talk about whether we’re going to invest or not.’ ”9
“BEYOND NATION BUILDING”
The immediate issue in 2003 was the state of the Iraqi oil industry and the need to ensure that it operated to provide the revenues that the country required. That, however, would depend upon overall conditions in Iraq.
In overseeing the planning for the war, Defense Secretary Donald Rumsfeld was driven by an imperative—to prove that his design for the light and lethal “new model army” (to borrow a term from Oliver Cromwell) was the model for the army of the future. Rumsfeld was intent on prevailing over the uniformed leadership in the Pentagon, which he considered too cautious, too risk averse, and much too conservative. He was determined to overturn the “overwhelming force” doctrine championed by the then-chairman of the Joint Chiefs of Staff Colin Powell during the 1990–91 Gulf crisis (and now Secretary of State). Instead he wanted to demonstrate on the battlefield that smaller but highly skilled and disciplined, technologically advanced forces—with “speed and agility and precision,” in his words, were more than sufficient to win a swift victory. And, indeed, a very effective fighting force successfully demonstrated that capability on the battlefield in Iraq in 2003.
But war and postwar—defeating an army on the field and occupying a country—were two very different propositions. In cultural, logistics, training, and regional political terms, little had been done to prepare the military or the civilian arms of the U.S. government for an occupation of open duration. As it turned out, the troop levels required for a swift victory were much less, perhaps only a third, of what was needed after the war to occupy and stabilize the country. Shortly before the war, Army Chief of Staff Eric Shinseki had told a Senate committee that, based on U.S. experience ranging from post–World War II Germany to Bosnia in the 1990s, “several hundred thousand” troops—on the order of 260,000—was the right size. To say his comments were unwelcome would be an understatement. He was immediately disavowed and summarily retired. For good measure, the secretary of the army, who had supported his view, was also fired.
Rumsfeld was also determined to denigrate and banish the kind of “nation building” that had engaged U.S. forces in the Balkans during the Clinton administration in the 1990s. A month before the Iraq War, Rumsfeld delivered a speech titled “Beyond Nation Building,” in which he proclaimed Afghanistan a complete victory and contrasted that to what he said was the “culture of dependence” in the Balkans in the 1990s. The prime example that he cited to prove what was wrong with nation building was that of a driver who, while shuttling aid workers around Kosovo, earned more than a university professor. “The objective is not to engage in what some call nation building,” he declared. “If the United States were to lead an international coalition in Iraq,” he added, the objective would be “to leave as soon as possible.”
Afghanistan, he said, was the proof of the right way to do things. For what seemed to be the remarkably swift victory in Afghanistan in the autumn of 2001 had reinforced Rumsfeld’s assumptions—and the self-confidence that underlay them. As Rumsfeld put it, the Soviets had hundreds of thousands of troops in Afghanistan “for year after year after year,” while the United States, with “tens of thousands” did in “eight, nine, ten, twelve weeks what [the Soviets] weren’t able to do in years.” (Some pointed out that the USSR had also made short work of its invasion; it was in the long occupation that it failed.)
But the intervention in the Balkans in southeast Europe, as difficult as it was, was a much simpler situation than invading Iraq, a major Arab country in the Middle East that had been under tight dictatorial control for thirty-five years, and then proceeding to demolish all of its institutions, creating a giant vacuum, all under the premise that, as one U.S. official in Iraq put it, a “Jeffersonian democracy” would sprout almost overnight.
Rumsfeld’s position was reinforced by the U.S. commander Tommy Franks, who made clear that his intention was to pull U.S. troop levels down as fast as possible after the initial victory. Some advocates within the Bush administration were further propelled by the belief that the war would not be difficult—that a “lightning victory” would be followed by a quick withdrawal and the emergence of that new Iraqi democracy. With such a mind-set, not much thought needed to be given to the planning for what would happen after the war. 10
Nor was much thought given to the budgetary implications, for a quick war would surely also be cheap. As it turned out, the war was not quick and the subsequent occupation cost more than a trillion dollars in direct outlays.
NOT A CAKEWALK
Some voices in and around the U.S. government urged caution. The intelligence community on its own initiative developed an analysis of “the principal challenges that any postwar authority in Iraq” would likely face. Among the principal conclusions: Iraq was not a “fertile ground for democracy” and any transition would be “long, difficult, and turbulent.” The intelligence analysts could feel “a strong wind consistently blowing,” but it was not in their direction.
One of the most widely respected senior statesmen in Washington was Brent Scowcroft. He had been national security adviser to two former presidents—Gerald Ford and George H. W. Bush. He had worked closely with Dick Cheney when Cheney was secretary of defense during Desert Storm, and the current national security adviser Condoleezza Rice had been one of his deputies during the George H. W. Bush administration. Moreover, he spoke with considerable current authority. He was, after all, chairman of the President’s Foreign Intelligence Advisory Board. “An attack on Iraq at this time would seriously jeopardize, if not destroy, the global counterterrorist campaign we have undertaken,” he wrote in a Wall Street Journal article in August 2002. “If we are to achieve our strategic objectives in Iraq, a military campaign in Iraq would likely have to be followed by a large-scale, long-term military occupation.” He added, “It will not be a cakewalk.”
Scowcroft had been among the key policymakers in the decision not to go to Baghdad and depose Saddam during the Gulf War in 1991. In Scowcroft’s mind, it was not only because of the “CNN factor” and the likely splintering of the coalition. It was exactly because of the risks of a long occupation. During the 1991 war, the first President Bush had ordered up a study on the lessons from previous conflicts. “Don’t change objectives in the middle of a war just because things are going well,” was one of the prime lessons that Scowcroft had taken away from that study. “We learned that from Korea.” In 1991 Scowcroft had been convinced that capturing Baghdad would “change the character of what we were doing. We would become the occupiers of a large country. We don’t have a plan. What do we do ? How do we get out?” Those were the same questions that troubled Scowcroft in 2002.
The month following Scowcroft’s article, Richard Haass, head of policy planning in the State Department, wrote to Secretary of State Colin Powell. “Once we cross the Rubicon by entering Iraq and ousting Saddam ourselves, we will have much greater responsibility for Iraq’s future.... Without order and security, all else is jeopardized.”
The inadequacy of forces would have far-reaching impact on what would transpire over the next several years in Iraq, including the fate of its oil industry and the direction of the global oil market. And, in turn, what would happen to the oil industry would be central to Iraq’s future.
Iraq was a petro-state—about three quarters of its GDP was derived from oil around the time of the war, and 95 percent of government revenues would come from oil after the war. There were extremely optimistic expectations about how quickly production and exports could be restored and put on a growth track. Just prior to the war, Deputy Defense Secretary Paul Wolfowitz had declared that, with restored oil exports, Iraq “can really finance its own reconstruction.” He suggested that Iraq could soon be at 6 million barrels per day, double its current capacity.11
The war began on March 20, 2003, Baghdad time, some twelve years after the end of the first Gulf war. By April 9, U.S. forces had captured Baghdad. That same day, American soldiers helped Iraqis pull down the giant statue of Saddam Hussein in a downtown square, a scene reminiscent of the end of communism in Eastern Europe and one that seemed to promise that a “pluralistic and democratic Iraq” was at hand. Up to this point, things had gone according to plan.
But what would happen thereafter? General Franks, the U.S. commander, thought he had the answer. Not long after that initial victory, he posited U.S. forces would be drawn down to 30,000 by September 2003—a little more than a tenth of what, others argued, historical experience suggested was the prudent number. 12
THE OIL INDUSTRY: “DILAPIDATED AND DEPLORABLE”
The actual conditions of the oil industry ensured that it was in no condition to meet the heady prewar expectations. The industry was suffering from years of neglect and lack of investment. With the collapse of Saddam’s regime, communication had broken down, the country was in chaos, and no one was in charge. Most of the government buildings in Baghdad were looted and burned. A notable exception was the oil ministry, which was secured by units of the U.S. Army’s 3rd Infantry.
A few days after the fall of Baghdad, an experienced Iraqi technocrat showed up at the gate of the ministry and asked to speak to someone about getting the industry restarted. This was Thamir Ghadhban, who had been chief geologist and then head of planning for the Iraq National Oil Company. He eventually connected over a satellite phone with Phil Carroll, who at this point had not yet arrived in Iraq. After several conversations, Carroll finally asked Ghadhban if he would like to be “chief executive” of the Iraqi oil industry, with Carroll as chairman. They became the core of the team charged with getting the oil sector up again. It was hard going.
Although Iraq’s potential was considerable, it had not been seriously explored since the 1970s. Out of eighty discovered oil fields, only twenty-three were put into production. In 1979–80 the Iraqi oil industry had worked out a plan to raise output to six million barrels per day, but it had never been put into effect because of the Iran-Iraq War in the 1980s and then the 1990–91 Gulf crisis. Instead the industry went into a long decline. Now, after the invasion, workers were frightened to go to work because of the lack of security. Carroll and Ghadhban concluded that the physical capacity of the Iraqi industry was just under 3 million barrels a day, less than half of the 6 million barrels per day that had been cited as a “reasonable” target. They set a series of more-reasonable targets aimed at reaching that 3 mbd level by the end of 2004. 13
But the obstacles were formidable. Despite fears prior to the war that Saddam’s forces might blow up the wells and then set oil fields on fire, as they had done in departing Kuwait in 1991, the oil infrastructure, in fact, went through the war largely unscathed. Yet the overall conditions of the industry were, in Carroll’s words, “dilapidated and deplorable.” The underground reservoirs had been damaged by years of mismanagement. The sanctions had also had their impact. Equipment was rusting and malfunctioning. The machinery and systems were obsolete. The control room in the key Daura Refinery, near Baghdad, said Carroll, “was a time warp, right out of the 1950s.” Indeed, it had been installed by an American company in the mid-1950s, when Iraq was still ruled by a king. Environmental pollution was also widespread. From a practical standpoint, what kept the industry going was the skill of Iraqi engineers; they were geniuses at improvisation. But now, with the looting and the breakdown in the infrastructure of the country in the aftermath of the war, conditions were even worse. There were no phone links to the refineries or the oil fields. Even the normal tools for measuring the flow of oil were absent.
As Carroll saw it from his vantage point, there were three priorities for the restoration of the Iraqi oil industry—and the rest of the economy—“security, security, and security.” But none of the three was being met. The collapse of the organized state and the inadequacy of the allied forces left large parts of the country very lightly guarded, and the forces that were there were overstretched. 14 And what crippled everything else was the disorder that was the consequence of two decisions haphazardly made by the Coalition Provisional Authority, the entity set up to run the American-led occupation.
“DE-BAATHIFICATION” AND THE ARMY’S DISSOLUTION
The first was “Order #1—De-Baathification of Iraqi Society.” Some two million people had belonged to Saddam’s Baath Party. Some were slavish and brutal followers of Saddam; some were true believers. Many others were compelled to join the Baath Party to get along in their jobs and rise up in the omnipresent bureaucracies and other government institutions that dominated the economy, and to ensure that their children had educational opportunities in a country that had been ruled by the Baathists for decades. The very choice of the name of the edict showed its model—the denazification program in Germany after World War II. But that program had actually been applied quite differently in very different circumstances. Postwar Iraq was not postwar Germany, nor for that matter postwar Japan; and the Coalition Provisional Authority under L. Paul Bremer III was not the military administration of General Lucius Clay, America’s proconsul in postwar Germany, or the occupation in Japan under General Douglas MacArthur.
Initially, de-Baathification was meant only to lop off the top of the hierarchy, which needed to be done immediately. But as rewritten and imposed, it reached far down into the country’s institutions and economy, where support for the regime was less ideological and more pragmatic. The country was, as one Iraqi general put it, “a nation of civil servants.” Many schoolteachers were turned out of their jobs and left with no income. The way the purge was applied removed much of the operational capability from government ministries, dismantled the central government, and promoted disorganization. It also eliminated a wide swath of expertise from the oil industry. Broadly, it set the stage for a radicalization of Iraqis—especially Sunnis, stripped of their livelihood, pensions, access to medical care, and so forth—and helped to create conditions for the emergence of Al Qaeda in Iraq. In the oil industry, the result of its almost blanket imposition was to further undermine operations.
Aleksander Kwaśniewski, president of Poland, one of the countries in the “coalition of the willing,” argued with Defense Secretary Rumsfeld that the post–World War II German model was misunderstood and was being misapplied. Rather, said Kwaśniewski, the United States should pay attention to the more recent model from Eastern Europe, where reformist wings of the former communist parties had been successfully integrated into the new political systems—an approach that had brought both cohesion and stability. Kwaśniewski’s Polish troops were welcomed into the coalition, but not his argument.15
The U.S. occupation arrived with a mélange of many ideas and analogies and lessons—ranging from a vision of a “New Middle East” to remembered film images of the joyous French tossing flowers at the U.S. soldiers liberating them from Nazi rule. Whatever their actual relevance to conditions in Iraq in 2003, these ideas nevertheless shaped the approach on the ground after the hostilities. Important realities of culture, history, and religion featured less.
The problem of inadequate troop levels was compounded by Order #2 by the Coalition Provisional Authority—“Dissolution of Entities”—which dismissed the Iraqi Army. Sending or allowing more than 400,000 soldiers, including the largely Sunni officer corps, to go home, with no jobs, no paychecks, no income to support their families, no dignity—but with weapons and growing animus to the American and British forces—was an invitation to disaster. The decision seems to have been made almost off-hand, somewhere between Washington and Baghdad, with little consideration or review. It reversed a decision made ten weeks earlier to use the Iraqi Army to help maintain order. In bluntly criticizing the policy to Bremer, one of the senior U.S. officers used an expletive. Rather than responding to the substance of the objection, Bremer said that he would not tolerate such language in his office and ordered the officer to leave the room.
The immediate effect of the army’s dissolution was “incendiary,” and the consequences would prove enormous. A plan was formulated to create a new military, but the ambition was pathetically small—initially just 7,000 troops, later lifted to 40,000. A separate oil police had guarded the entire petroleum sector. That too was dissolved, adding to the risks for the workers in the oil industry and leaving the oil system even more vulnerable to pillage and sabotage. 16
RAMPANT LOOTING
Looting seemed to have been endemic in Iraq whenever authority broke down, going back to the 1958 revolution. Widespread looting had broken out in the aftermath of the 1991 Gulf War. Yet that risk too seems to have gone largely unnoted in the planning for the postwar situation. In 2003 looting and vandalism started immediately, and on a massive scale. There was no Iraqi Army to help prevent the looting, but now a large number of disgruntled and unemployed former soldiers. When it first began, Defense Secretary Rumsfeld dismissed it with the famous phrase “Stuff happens.” But it undermined the entire economy and highlighted the immediate lack of security. Two of the three sewage plants in Baghdad were so thoroughly looted that they had to be rebuilt. Even police stations were stripped of their electric wires, phones, light fixtures, and doorknobs. The oil industry was a prime target for this stripping. For instance, all the water pumps, critical to its operation, were stolen from the giant Rumaila oil field. Only by mustering his workers with their private arms did the head of the Daura Refinery succeed in standing off an army of looters at the refinery gate.
One of the most devastating impacts resulted from the wholesale looting of the electric system, on which the whole economy depended. Vandals took down the electric wires and pulled down the transmission towers and carted their booty off to Iran or Kuwait to sell as scrap. Even the computerized control room of the power station that controlled Baghdad’s electric grid was looted. This continuing disruption hit the oil industry hard. Without electricity, many of the oil fields and the three surviving refineries simply could not operate. It also crippled the irrigation on which agriculture depended. 17
Despite the looting, in the first several months or so, the occupation seemed to be making some progress. And, such was the ingenuity of the Iraqi oil people that, even in the face of deprivation, petroleum production was being restored and was actually ahead of target. By late summer, one could detect a certain note of triumphalism in some commentaries along with a growing confidence that Iraq really did presage a “new” Middle East.
INSURGENCY AND CIVIL WAR
But the occupation was not going according to plan. Rumsfeld had called the emerging insurgents “dead-enders.” But soon the U.S. commander in Iraq was talking about “a classical guerilla-type campaign,” and one of the senior British representatives was warning that “the new threat” was “well-targeted sabotage of the infrastructure.” Unemployment was running at 60 percent. Yet this unemployment, even with all its obvious risks, was not the top economic priority. Instead U.S. officials were focused on transforming Iraq, which had a totally state-dominated economy, into a free-market state, and doing so as rapidly as possible. Meanwhile, as one American general warned, “the liberators” were coming to be seen as something else—“occupiers.”
By the autumn of 2003, a new, more difficult phase was beginning. In due course, some would call it a civil war; others, an insurgency. As events played out, it would be both—a civil war between Shia and Sunnis, and an insurgency manned by Baathists and other Sunni activists, increasingly conjoined with foreign jihadists, abetted by unemployed young men (who, for a hundred dollars or even fifty dollars, could be hired to open fire on the Americans).18
By the spring of 2004 it would become a war against the occupation. Private militias were battling each other. Foreign jihadists were infiltrating into the country. Killings and revenge killings became a daily occurrence. Roadside bombs were becoming increasingly lethal. Car bombs were going off outside restaurants and offices. The leadership of the occupation withdrew into the safety of the heavily secured Green Zone. In May 2004, Jeremy Greenstock, who had been the senior British representative in Baghdad, lamented that Bremer, as the U.S. head of the occupation, did not have a plaque on his desk that said “Security and jobs, stupid.”19
THE INDUSTRY UNDER ATTACK
The oil industry was by then under attack. The former Baath Party put high priority on sabotaging the industry in a plan it called its Political and Strategic Program for the Armed Iraqi Resistance. Pipelines were being blown up; the export line, from Iraq into Turkey and to the Mediterranean, was shut by repeated bombings. The great expectations for the rapid expansion of Iraqi output were being punctured. Increasingly, the struggle was to maintain exports, especially in the north.
With his term as oil adviser over, Phil Carroll returned to the United States in the autumn of 2003. He was succeeded by Rob McKee, who had headed exploration and production for ConocoPhillips around the world.
“From the moment I got there, I saw that we didn’t have enough people on the ground to do what needed to be done,” said McKee. “Everything was broken. There was no police, no order, no courts, no infrastructure, and lack of electricity and water. Every day was a firefight, literally and figuratively. You’d come in the morning and get word that something had been blown up or looted. And then you’d figure out how to get that fixed before you could turn back to the longer-term, bigger issues.”
On top of that were the procedures of the U.S. government. “All the bureaucracy over bidding and contracting, all that slowed things down to a crawl,” said McKee. “That was the most frustrating thing I had to deal with.”20
THE IRAQI DISRUPTION
But such was the effort that output in 2004 did come close to the prewar levels in several months but, for the year—as a result of the violence and of the economic disarray and electricity shortages—was more than 20 percent lower. Exports were often disrupted. In what could have been a disaster, two suicide bombers in a motorized dinghy came close to blowing up part of the critically important offshore oil export terminal, but the craft exploded short of its target. Naval patrols, thereafter, were much tighter.
As the insurgency stepped up its attacks, the effect was being felt in the world oil market. “Last week’s attacks on key pipelines,” reported Petroleum Intelligence Weekly in June 2004, “have reduced exports of around 1.6 million barrels per day to zero with no immediate prospect that they will resume. While bad enough for Iraq, the export outage has left world oil markets with a tiny sliver of spare capacity concentrated in Saudi Arabia.... Global oil supplies have relatively little slack.”21
Again and again, exports were reduced or temporarily halted. In the years following the invasion, Iraqi production remained, at best, at only two thirds of capacity. It was not until 2009 that it was able, on an annual basis, to reach the prewar level of 2001, itself still considerably below the kind of potential that the country could achieve with investment. Before the war there had been high expectations about how Iraq’s growing output would contribute to stability in the world oil market. Instead Iraq’s beleaguered oil industry, producing well below its capacity, ended up contributing, on a sustained basis, to the toll of the aggregate disruption.
WHAT DID YOU LEARN?
In the autumn of 2003, when Phil Carroll, the first oil adviser, finished his tour, he stopped in Washington on his way back to Houston to visit the Pentagon. He was taken in to see Defense Secretary Rumsfeld. The secretary mainly had two questions for Carroll: “Did you enjoy it?” And, “What did you learn?”
There was not much more to the discussion than that. Carroll headed on home.
In late 2002, Philip Carroll received a phone call from an official in the Pentagon. The Department of Defense was putting together an advisory group on oil, and Carroll was a sensible stop. Twice retired—first as CEO of Shell Oil USA and then the engineering company Fluor—Carroll came equipped with considerable international experience in the logistics and infrastructure of energy supply, as well as a reputation for diplomatic skill.
The questions were about how and what to plan for, in terms of oil, in the event of war. Two things were known: Iraq was highly prospective but had not really been explored since the 1970s and indeed was one of the least explored of all the major oil-exporting countries. And its industry was in poor condition, although no one really knew how poor. Carroll recommended that the DOD do an in-depth study and think through how the industry could be managed during postwar transition. A few months later, in early 2003, Carroll was formally asked if he would go out to Iraq as oil adviser following U.S. military action. He would become one of about twenty other senior advisers, each to advise and help direct an Iraqi ministry. By that time it was more than clear that the United States, along with Britain, Australia, Japan, and a score of other nations, in what was called “the coalition of the willing,” would shortly be going to war.
WHY THE WAR?
Iraq was an oil country. Its only export was oil. It was a nation defined by oil, and as such was a country of great significance to the global energy markets. But the ensuing war was not about oil. It resulted from a convergence of factors: the primary ones were the September 11, 2001, attack and its consequences, the threat of weapons of mass destruction, the way the 1991 war ended, the persistence of Saddam’s intransigent and ruthless rule, and the way in which analysis was, and was not, carried out.
Saddam had an “addiction to weapons of mass destruction,” as the head of the U.N. weapons inspection program put it on the eve of the war. For decades the Iraqi dictator had devoted a significant part of the country’s resources to the development of chemical, biological, and nuclear weapons. Despite his agreements with the United Nations after the Gulf War, both Western and neighboring countries believed that Saddam was continuing to develop WMD and that, if not restrained, would indeed acquire them. For instance, a 1998 National Intelligence Estimate reported that while Iraq’s WMD capability had been damaged by the Gulf War, “enough production components and data remain hidden and enough expertise has been retained or developed to enable Iraq to resume development and production of WMD . . . Evidence strongly suggests that Baghdad has hidden remnants of its WMD programs and is making every effort to preserve them.”
For the war planners, the likely use of such weapons by the Iraqi regime was a central factor in military planning, right up to and into the war itself, when, as a result of intercepted signals, some units carried bulky, cumbersome masks, impermeable gowns, and individual antidotes for chem-bio attacks. The postwar failure to find WMD capabilities, despite much effort, undermined the credibility of the decision making in the eyes of many. Some parts of the U.S. intelligence community—notably the State Department’s Bureau of Intelligence and Research and some in the CIA—had dissented, arguing the view that Saddam was probably still not pursuing the weapons but their arguments were discounted. The general view was that Saddam certainly was acting on his addiction. And there was within the U.S. intelligence community, the Middle East National Intelligence Officer Paul Pillar wrote, “a broad consensus that such programs existed.” There was, however, no agreement on their scale, timing, effectiveness, and utility.1
France and Germany—along with Russia—opposed the decision to go to war at every step. French president Jacques Chirac emerged as a particular foe to supporters of war, stating that “nothing today justified a war,” and that there was, in his view, “no indisputable proof ” of weapons of mass destruction. But Chirac was reflecting the view of the French intelligence service. “We had no evidence that Iraq had weapons of mass destruction,” recalled a senior French policymaker. “And we had no evidence that it did not. It may be that sanctions had worked much better than we had thought.”2
But Saddam made several miscalculations. He thought that the scale of the antiwar demonstrations in Europe would somehow ensure that the coalition would not actually invade. In what proved to be a massive miscalculation, he chose to convey ambiguity as to what he was doing about such weapons—and what he was covering up. To do otherwise, he apparently thought, would have weakened his regime vis-à-vis both Iran and domestic opponents. As he told his inner circle, “The better part of war was deceiving.” To an interrogator after the war, who asked him why the illusion, he had a one-word reply: Iran.
There was also the matter of assuming that others saw the world the way he did. It has been suggested that Saddam could never have believed that the 1991 coalition would have stopped short of Baghdad for something so mushy as the “CNN effect” on television viewers around the world and because of the fear of splintering the coalition. He would not believe it because he would not have acted on such reasons. It had to be because they feared that he had equipped his forces with chemical and biological weapons for the final defense of Baghdad. This was a very compelling reason to maintain the illusion.3
From the coalition side, there was good cause to proceed on a worst-case assumption: in the aftermath of the First Gulf War, it was discovered, with some shock, that the Iraqi regime was six to eighteen months away from a crude nuclear weapon. In retrospect, had Saddam not been so hasty but instead waited to invade Kuwait until 1993 or 1994 rather than 1990, he would have been in a much stronger position—equipped with some kind of nuclear weapon capability, and operating in a much tighter world oil market. All this would have reduced the flexibility of his opponents.
With the United States’ having underestimated Saddam’s capabilities once, the Bush administration was not going to repeat that mistake. There was all the more reason for such a response given 9/11 and in light of Saddam’s evident appetite for WMD and his hunger for revenge after 1991. Laura Bush later wrote of her husband, “What if he gambled on containing Saddam and was wrong?” Bush himself said, “That was not a chance I was willing to take.” This gamble seemed all the more risky in the state of permanent anxiety and tension that followed 9/11: after the attacks, a daily litany of reports flowed into the U.S. government about plots and attacks prevented, which only added to the constant apprehension about those plots that might not be nipped in time. “ We lived with threat assessments more disturbing than any ever spoken on the air,” said Laura Bush.
As a senior State Department official wrote to Secretary of State Colin Powell prior to the war, “September 11 changed the debate on Iraq. It highlighted the possibility of an Iraqi version of September 11, and underscored concerns that containment and deterrence will be unable to prevent such an attack.” Some argued that Iraqi intelligence had direct links to, and had perhaps even coached, Al Qaeda. Others said that such a link was highly dubious, indeed unlikely, and certainly unsubstantiated. “The intelligence community never offered any analysis that supported the notion of an alliance between Saddam and al Qaeda,” said Paul Pillar, the national intelligence officer. But that did not mean that, under the premise of “the enemy of my enemy is my friend,” there could not be cooperation in the future given their common enmity toward the West.4
Iraq was already at the top of the agenda of some of the senior policymakers prior to their taking office in the administration of George W. Bush. A policy review of options related to Iraqi sanctions had been launched in the summer of 2001. A few days after 9/11, at a meeting of President Bush with his senior advisers at Camp David, some sought to add Iraq as a target for counterattack, alongside Al Qaeda and Afghanistan. At that point Bush was firm in his rejection. In early October 2001, the U.S. ambassador to the United Nations was instructed to read “the toughest message I’d ever been asked to deliver” to Iraq’s ambassador, warning of the dire consequences for Iraq if it tried to take advantage of the 9/11 attacks. But it was not until 2002, fueled with the confidence from what seemed to be the very successful and very short campaign to evict the Taliban from Afghanistan that plans really began to congeal around a war with Iraq. And, in the aftermath of 9/11, it was going to be a preventative war—launched under what became known as the policy of preemption.5
To the inner circle of decision makers, 9/11 demonstrated the risks of not acting in advance to prevent Saddam’s acquisition of such weapons. Vice President Dick Cheney, who had been secretary of defense during the Gulf crisis, was central to the Iraq decisions. “As one of those who worked to assemble the Gulf War coalition,” he said in 2002, “I can tell you that our job then would have been infinitely more difficult in the face of a nuclear-armed Saddam Hussein.”
President Bush laid out the fundamentals of the new policy in a speech at West Point in June 2002. Traditional “deterrence” did not work against “shadowy terrorist networks.” And “containment” did not work “when unbalanced dictators with weapons of mass destruction can deliver these weapons on missiles or secretly provide them to terrorist allies.” The only answer was “preemptive action,” Bush added, “if we wait for threats to fully materialize, we will have waited too long.”
There was also a conviction among some that the existing political systems and stagnation in the Middle East were the breeding grounds for the likes of Al Qaeda and terrorism. A “new” Iraq could be the beginning of the answer. The skillful and clever Iraqi émigré Ahmed Chalabi, claiming to speak both for the exile community and those within the country, convinced some policymakers that an Iraq without Saddam would welcome the coalition as liberators and would quickly embrace representative democracy. These decision makers were convinced that “a pluralistic and democratic Iraq” would have a transformative effect in the Middle East, and in something akin to the fall of communism, set off a process of “reform” and “moderation” throughout the region.6
Contrary intelligence and analyses that did not fit this vision were pushed aside. Moreover, after thirty-five years of Baathist dictatorship, some could argue that, in any event, not much was really known about such “facts on the ground” as religious cleavages, sectarian rivalries, the importance of tribal loyalties, and the role of Iran. Those who did know something about these details, or who questioned the basic policy convictions, or who warned that these assumptions were too optimistic, were progressively squeezed out of the decisionmaking process.
The shock of 9/11 created a determination to demonstrate the strength of the United States, reassert a balance of power, and seize the initiative. There was also the desire to finish the “unfinished business” of 1991. After the 1991 Gulf War, Saddam conducted a brutal war against the disenfranchised Shia, which might have been prevented had the armistice not permitted Saddam’s forces to use helicopters in the south.
Some critics said that the war was conducted for the benefit of Israel. The elimination of Saddam’s military power would certainly be a boon for Israel, on which Iraqi Scud rockets had rained during the 1991 Gulf War. But Saddam was already contained and his military much weakened. Israel was much more worried about the Iranian nuclear program. As Richard Haass, the head of policy planning in the State Department, wrote, “The Israelis did not share the administration’s preoccupation with Iraq. Actually, it was just the opposite. The Israelis . . . feared that Iraq would distract the United States from what they viewed as the true threat, which was Iran.” Both Israeli officials, including the minister of defense, who happened to be Iraqi-born, and Israeli experts warned that the administration was greatly underestimating the postwar troubles that would await them in Iraq. As one of Israel’s leading specialists put it at a prewar conference in Washington, D.C., someone needed to tell the U.S. president that American forces would have to be in Iraq for up to five years and “they will not have an easy time there.”7
“OIL”
Oil did not play the same role as these other factors in defining policy. The significance of oil was because of the nature of the region—the centrality of the Persian Gulf in world oil and thus the critical importance of the balance of power in that region. It had been determined U.S. policy since Harry Truman to prevent the Persian Gulf and its oil from falling under the sway of a hostile power. But the possibility of a hostile power—Iraq—achieving dominance in the region, and thus over the region’s oil, loomed much larger during the Gulf crisis of 1990–91, when Iraq had conquered Kuwait and was threatening the Saudi oil fields, than in the run-up to the subsequent Iraq War. At the same time, in 2003, neither the Americans nor the British were pursuing a mercantilist 1920s-style ambition to control Iraqi oil. The issue was not who owned the oil at the wellhead, but whether it was available on the world market. Iraqi oil could be purchased on the world market, albeit managed under the U.N. sanctions program. Indeed, in 2001 the United States imported 800,000 barrels per day from Iraq. A democratic Iraq, it was certainly thought, would be a more reliable provider and, not being under sanctions, could expand its capacity. In the minds of some policymakers, noting the number of Saudi nationals involved in 9/11, the prospect of Iraq’s becoming a much larger exporter that would counterbalance Saudi Arabia was attractive, but this was far from a wellshaped—or well-informed—strategic objective.8
While a variety of ideas were being tossed around for the postwar organization of the industry, the clear policy determination was that the decisions about the future of Iraq’s oil would be made by a future Iraqi government. Nothing should be done to prejudice the prerogatives of the eventual government—even including the subject of OPEC membership—although a nongovernmental oil industry was seen as highly preferable in order to facilitate the introduction of the technology and the tens of billions of dollars of investment that the industry would need. Even in that case, however, a liberated Iraq, with its strong nationalist tradition, was likely to offer terms to investors that were as tough as those of any other petroleum-exporting countries, or tougher.
As war approached in 2002–3, the dominant attitude among the major international oil companies was one of skepticism and caution, and some alarm over the entire idea of war. Many of them were familiar with the region and feared a backlash. They were very doubtful that a stable, peaceful, new-style democracy could be quickly created from the wreckage of the Baathist state.
“You know what I’ll say to the first person in our company who comes to us with a proposal to invest a billion dollars in Iraq?” asked the CEO of one of the supermajors a month before the war. “I’ll say, ‘Tell us about the legal system, tell us about the political system. Tell us about the economic system and about the contractual and fiscal systems, and tell us about arbitration. And tell us about security, and tell us about the evolution of the political system. Tell us all those things, and then we’ll talk about whether we’re going to invest or not.’ ”9
“BEYOND NATION BUILDING”
The immediate issue in 2003 was the state of the Iraqi oil industry and the need to ensure that it operated to provide the revenues that the country required. That, however, would depend upon overall conditions in Iraq.
In overseeing the planning for the war, Defense Secretary Donald Rumsfeld was driven by an imperative—to prove that his design for the light and lethal “new model army” (to borrow a term from Oliver Cromwell) was the model for the army of the future. Rumsfeld was intent on prevailing over the uniformed leadership in the Pentagon, which he considered too cautious, too risk averse, and much too conservative. He was determined to overturn the “overwhelming force” doctrine championed by the then-chairman of the Joint Chiefs of Staff Colin Powell during the 1990–91 Gulf crisis (and now Secretary of State). Instead he wanted to demonstrate on the battlefield that smaller but highly skilled and disciplined, technologically advanced forces—with “speed and agility and precision,” in his words, were more than sufficient to win a swift victory. And, indeed, a very effective fighting force successfully demonstrated that capability on the battlefield in Iraq in 2003.
But war and postwar—defeating an army on the field and occupying a country—were two very different propositions. In cultural, logistics, training, and regional political terms, little had been done to prepare the military or the civilian arms of the U.S. government for an occupation of open duration. As it turned out, the troop levels required for a swift victory were much less, perhaps only a third, of what was needed after the war to occupy and stabilize the country. Shortly before the war, Army Chief of Staff Eric Shinseki had told a Senate committee that, based on U.S. experience ranging from post–World War II Germany to Bosnia in the 1990s, “several hundred thousand” troops—on the order of 260,000—was the right size. To say his comments were unwelcome would be an understatement. He was immediately disavowed and summarily retired. For good measure, the secretary of the army, who had supported his view, was also fired.
Rumsfeld was also determined to denigrate and banish the kind of “nation building” that had engaged U.S. forces in the Balkans during the Clinton administration in the 1990s. A month before the Iraq War, Rumsfeld delivered a speech titled “Beyond Nation Building,” in which he proclaimed Afghanistan a complete victory and contrasted that to what he said was the “culture of dependence” in the Balkans in the 1990s. The prime example that he cited to prove what was wrong with nation building was that of a driver who, while shuttling aid workers around Kosovo, earned more than a university professor. “The objective is not to engage in what some call nation building,” he declared. “If the United States were to lead an international coalition in Iraq,” he added, the objective would be “to leave as soon as possible.”
Afghanistan, he said, was the proof of the right way to do things. For what seemed to be the remarkably swift victory in Afghanistan in the autumn of 2001 had reinforced Rumsfeld’s assumptions—and the self-confidence that underlay them. As Rumsfeld put it, the Soviets had hundreds of thousands of troops in Afghanistan “for year after year after year,” while the United States, with “tens of thousands” did in “eight, nine, ten, twelve weeks what [the Soviets] weren’t able to do in years.” (Some pointed out that the USSR had also made short work of its invasion; it was in the long occupation that it failed.)
But the intervention in the Balkans in southeast Europe, as difficult as it was, was a much simpler situation than invading Iraq, a major Arab country in the Middle East that had been under tight dictatorial control for thirty-five years, and then proceeding to demolish all of its institutions, creating a giant vacuum, all under the premise that, as one U.S. official in Iraq put it, a “Jeffersonian democracy” would sprout almost overnight.
Rumsfeld’s position was reinforced by the U.S. commander Tommy Franks, who made clear that his intention was to pull U.S. troop levels down as fast as possible after the initial victory. Some advocates within the Bush administration were further propelled by the belief that the war would not be difficult—that a “lightning victory” would be followed by a quick withdrawal and the emergence of that new Iraqi democracy. With such a mind-set, not much thought needed to be given to the planning for what would happen after the war. 10
Nor was much thought given to the budgetary implications, for a quick war would surely also be cheap. As it turned out, the war was not quick and the subsequent occupation cost more than a trillion dollars in direct outlays.
NOT A CAKEWALK
Some voices in and around the U.S. government urged caution. The intelligence community on its own initiative developed an analysis of “the principal challenges that any postwar authority in Iraq” would likely face. Among the principal conclusions: Iraq was not a “fertile ground for democracy” and any transition would be “long, difficult, and turbulent.” The intelligence analysts could feel “a strong wind consistently blowing,” but it was not in their direction.
One of the most widely respected senior statesmen in Washington was Brent Scowcroft. He had been national security adviser to two former presidents—Gerald Ford and George H. W. Bush. He had worked closely with Dick Cheney when Cheney was secretary of defense during Desert Storm, and the current national security adviser Condoleezza Rice had been one of his deputies during the George H. W. Bush administration. Moreover, he spoke with considerable current authority. He was, after all, chairman of the President’s Foreign Intelligence Advisory Board. “An attack on Iraq at this time would seriously jeopardize, if not destroy, the global counterterrorist campaign we have undertaken,” he wrote in a Wall Street Journal article in August 2002. “If we are to achieve our strategic objectives in Iraq, a military campaign in Iraq would likely have to be followed by a large-scale, long-term military occupation.” He added, “It will not be a cakewalk.”
Scowcroft had been among the key policymakers in the decision not to go to Baghdad and depose Saddam during the Gulf War in 1991. In Scowcroft’s mind, it was not only because of the “CNN factor” and the likely splintering of the coalition. It was exactly because of the risks of a long occupation. During the 1991 war, the first President Bush had ordered up a study on the lessons from previous conflicts. “Don’t change objectives in the middle of a war just because things are going well,” was one of the prime lessons that Scowcroft had taken away from that study. “We learned that from Korea.” In 1991 Scowcroft had been convinced that capturing Baghdad would “change the character of what we were doing. We would become the occupiers of a large country. We don’t have a plan. What do we do ? How do we get out?” Those were the same questions that troubled Scowcroft in 2002.
The month following Scowcroft’s article, Richard Haass, head of policy planning in the State Department, wrote to Secretary of State Colin Powell. “Once we cross the Rubicon by entering Iraq and ousting Saddam ourselves, we will have much greater responsibility for Iraq’s future.... Without order and security, all else is jeopardized.”
The inadequacy of forces would have far-reaching impact on what would transpire over the next several years in Iraq, including the fate of its oil industry and the direction of the global oil market. And, in turn, what would happen to the oil industry would be central to Iraq’s future.
Iraq was a petro-state—about three quarters of its GDP was derived from oil around the time of the war, and 95 percent of government revenues would come from oil after the war. There were extremely optimistic expectations about how quickly production and exports could be restored and put on a growth track. Just prior to the war, Deputy Defense Secretary Paul Wolfowitz had declared that, with restored oil exports, Iraq “can really finance its own reconstruction.” He suggested that Iraq could soon be at 6 million barrels per day, double its current capacity.11
The war began on March 20, 2003, Baghdad time, some twelve years after the end of the first Gulf war. By April 9, U.S. forces had captured Baghdad. That same day, American soldiers helped Iraqis pull down the giant statue of Saddam Hussein in a downtown square, a scene reminiscent of the end of communism in Eastern Europe and one that seemed to promise that a “pluralistic and democratic Iraq” was at hand. Up to this point, things had gone according to plan.
But what would happen thereafter? General Franks, the U.S. commander, thought he had the answer. Not long after that initial victory, he posited U.S. forces would be drawn down to 30,000 by September 2003—a little more than a tenth of what, others argued, historical experience suggested was the prudent number. 12
THE OIL INDUSTRY: “DILAPIDATED AND DEPLORABLE”
The actual conditions of the oil industry ensured that it was in no condition to meet the heady prewar expectations. The industry was suffering from years of neglect and lack of investment. With the collapse of Saddam’s regime, communication had broken down, the country was in chaos, and no one was in charge. Most of the government buildings in Baghdad were looted and burned. A notable exception was the oil ministry, which was secured by units of the U.S. Army’s 3rd Infantry.
A few days after the fall of Baghdad, an experienced Iraqi technocrat showed up at the gate of the ministry and asked to speak to someone about getting the industry restarted. This was Thamir Ghadhban, who had been chief geologist and then head of planning for the Iraq National Oil Company. He eventually connected over a satellite phone with Phil Carroll, who at this point had not yet arrived in Iraq. After several conversations, Carroll finally asked Ghadhban if he would like to be “chief executive” of the Iraqi oil industry, with Carroll as chairman. They became the core of the team charged with getting the oil sector up again. It was hard going.
Although Iraq’s potential was considerable, it had not been seriously explored since the 1970s. Out of eighty discovered oil fields, only twenty-three were put into production. In 1979–80 the Iraqi oil industry had worked out a plan to raise output to six million barrels per day, but it had never been put into effect because of the Iran-Iraq War in the 1980s and then the 1990–91 Gulf crisis. Instead the industry went into a long decline. Now, after the invasion, workers were frightened to go to work because of the lack of security. Carroll and Ghadhban concluded that the physical capacity of the Iraqi industry was just under 3 million barrels a day, less than half of the 6 million barrels per day that had been cited as a “reasonable” target. They set a series of more-reasonable targets aimed at reaching that 3 mbd level by the end of 2004. 13
But the obstacles were formidable. Despite fears prior to the war that Saddam’s forces might blow up the wells and then set oil fields on fire, as they had done in departing Kuwait in 1991, the oil infrastructure, in fact, went through the war largely unscathed. Yet the overall conditions of the industry were, in Carroll’s words, “dilapidated and deplorable.” The underground reservoirs had been damaged by years of mismanagement. The sanctions had also had their impact. Equipment was rusting and malfunctioning. The machinery and systems were obsolete. The control room in the key Daura Refinery, near Baghdad, said Carroll, “was a time warp, right out of the 1950s.” Indeed, it had been installed by an American company in the mid-1950s, when Iraq was still ruled by a king. Environmental pollution was also widespread. From a practical standpoint, what kept the industry going was the skill of Iraqi engineers; they were geniuses at improvisation. But now, with the looting and the breakdown in the infrastructure of the country in the aftermath of the war, conditions were even worse. There were no phone links to the refineries or the oil fields. Even the normal tools for measuring the flow of oil were absent.
As Carroll saw it from his vantage point, there were three priorities for the restoration of the Iraqi oil industry—and the rest of the economy—“security, security, and security.” But none of the three was being met. The collapse of the organized state and the inadequacy of the allied forces left large parts of the country very lightly guarded, and the forces that were there were overstretched. 14 And what crippled everything else was the disorder that was the consequence of two decisions haphazardly made by the Coalition Provisional Authority, the entity set up to run the American-led occupation.
“DE-BAATHIFICATION” AND THE ARMY’S DISSOLUTION
The first was “Order #1—De-Baathification of Iraqi Society.” Some two million people had belonged to Saddam’s Baath Party. Some were slavish and brutal followers of Saddam; some were true believers. Many others were compelled to join the Baath Party to get along in their jobs and rise up in the omnipresent bureaucracies and other government institutions that dominated the economy, and to ensure that their children had educational opportunities in a country that had been ruled by the Baathists for decades. The very choice of the name of the edict showed its model—the denazification program in Germany after World War II. But that program had actually been applied quite differently in very different circumstances. Postwar Iraq was not postwar Germany, nor for that matter postwar Japan; and the Coalition Provisional Authority under L. Paul Bremer III was not the military administration of General Lucius Clay, America’s proconsul in postwar Germany, or the occupation in Japan under General Douglas MacArthur.
Initially, de-Baathification was meant only to lop off the top of the hierarchy, which needed to be done immediately. But as rewritten and imposed, it reached far down into the country’s institutions and economy, where support for the regime was less ideological and more pragmatic. The country was, as one Iraqi general put it, “a nation of civil servants.” Many schoolteachers were turned out of their jobs and left with no income. The way the purge was applied removed much of the operational capability from government ministries, dismantled the central government, and promoted disorganization. It also eliminated a wide swath of expertise from the oil industry. Broadly, it set the stage for a radicalization of Iraqis—especially Sunnis, stripped of their livelihood, pensions, access to medical care, and so forth—and helped to create conditions for the emergence of Al Qaeda in Iraq. In the oil industry, the result of its almost blanket imposition was to further undermine operations.
Aleksander Kwaśniewski, president of Poland, one of the countries in the “coalition of the willing,” argued with Defense Secretary Rumsfeld that the post–World War II German model was misunderstood and was being misapplied. Rather, said Kwaśniewski, the United States should pay attention to the more recent model from Eastern Europe, where reformist wings of the former communist parties had been successfully integrated into the new political systems—an approach that had brought both cohesion and stability. Kwaśniewski’s Polish troops were welcomed into the coalition, but not his argument.15
The U.S. occupation arrived with a mélange of many ideas and analogies and lessons—ranging from a vision of a “New Middle East” to remembered film images of the joyous French tossing flowers at the U.S. soldiers liberating them from Nazi rule. Whatever their actual relevance to conditions in Iraq in 2003, these ideas nevertheless shaped the approach on the ground after the hostilities. Important realities of culture, history, and religion featured less.
The problem of inadequate troop levels was compounded by Order #2 by the Coalition Provisional Authority—“Dissolution of Entities”—which dismissed the Iraqi Army. Sending or allowing more than 400,000 soldiers, including the largely Sunni officer corps, to go home, with no jobs, no paychecks, no income to support their families, no dignity—but with weapons and growing animus to the American and British forces—was an invitation to disaster. The decision seems to have been made almost off-hand, somewhere between Washington and Baghdad, with little consideration or review. It reversed a decision made ten weeks earlier to use the Iraqi Army to help maintain order. In bluntly criticizing the policy to Bremer, one of the senior U.S. officers used an expletive. Rather than responding to the substance of the objection, Bremer said that he would not tolerate such language in his office and ordered the officer to leave the room.
The immediate effect of the army’s dissolution was “incendiary,” and the consequences would prove enormous. A plan was formulated to create a new military, but the ambition was pathetically small—initially just 7,000 troops, later lifted to 40,000. A separate oil police had guarded the entire petroleum sector. That too was dissolved, adding to the risks for the workers in the oil industry and leaving the oil system even more vulnerable to pillage and sabotage. 16
RAMPANT LOOTING
Looting seemed to have been endemic in Iraq whenever authority broke down, going back to the 1958 revolution. Widespread looting had broken out in the aftermath of the 1991 Gulf War. Yet that risk too seems to have gone largely unnoted in the planning for the postwar situation. In 2003 looting and vandalism started immediately, and on a massive scale. There was no Iraqi Army to help prevent the looting, but now a large number of disgruntled and unemployed former soldiers. When it first began, Defense Secretary Rumsfeld dismissed it with the famous phrase “Stuff happens.” But it undermined the entire economy and highlighted the immediate lack of security. Two of the three sewage plants in Baghdad were so thoroughly looted that they had to be rebuilt. Even police stations were stripped of their electric wires, phones, light fixtures, and doorknobs. The oil industry was a prime target for this stripping. For instance, all the water pumps, critical to its operation, were stolen from the giant Rumaila oil field. Only by mustering his workers with their private arms did the head of the Daura Refinery succeed in standing off an army of looters at the refinery gate.
One of the most devastating impacts resulted from the wholesale looting of the electric system, on which the whole economy depended. Vandals took down the electric wires and pulled down the transmission towers and carted their booty off to Iran or Kuwait to sell as scrap. Even the computerized control room of the power station that controlled Baghdad’s electric grid was looted. This continuing disruption hit the oil industry hard. Without electricity, many of the oil fields and the three surviving refineries simply could not operate. It also crippled the irrigation on which agriculture depended. 17
Despite the looting, in the first several months or so, the occupation seemed to be making some progress. And, such was the ingenuity of the Iraqi oil people that, even in the face of deprivation, petroleum production was being restored and was actually ahead of target. By late summer, one could detect a certain note of triumphalism in some commentaries along with a growing confidence that Iraq really did presage a “new” Middle East.
INSURGENCY AND CIVIL WAR
But the occupation was not going according to plan. Rumsfeld had called the emerging insurgents “dead-enders.” But soon the U.S. commander in Iraq was talking about “a classical guerilla-type campaign,” and one of the senior British representatives was warning that “the new threat” was “well-targeted sabotage of the infrastructure.” Unemployment was running at 60 percent. Yet this unemployment, even with all its obvious risks, was not the top economic priority. Instead U.S. officials were focused on transforming Iraq, which had a totally state-dominated economy, into a free-market state, and doing so as rapidly as possible. Meanwhile, as one American general warned, “the liberators” were coming to be seen as something else—“occupiers.”
By the autumn of 2003, a new, more difficult phase was beginning. In due course, some would call it a civil war; others, an insurgency. As events played out, it would be both—a civil war between Shia and Sunnis, and an insurgency manned by Baathists and other Sunni activists, increasingly conjoined with foreign jihadists, abetted by unemployed young men (who, for a hundred dollars or even fifty dollars, could be hired to open fire on the Americans).18
By the spring of 2004 it would become a war against the occupation. Private militias were battling each other. Foreign jihadists were infiltrating into the country. Killings and revenge killings became a daily occurrence. Roadside bombs were becoming increasingly lethal. Car bombs were going off outside restaurants and offices. The leadership of the occupation withdrew into the safety of the heavily secured Green Zone. In May 2004, Jeremy Greenstock, who had been the senior British representative in Baghdad, lamented that Bremer, as the U.S. head of the occupation, did not have a plaque on his desk that said “Security and jobs, stupid.”19
THE INDUSTRY UNDER ATTACK
The oil industry was by then under attack. The former Baath Party put high priority on sabotaging the industry in a plan it called its Political and Strategic Program for the Armed Iraqi Resistance. Pipelines were being blown up; the export line, from Iraq into Turkey and to the Mediterranean, was shut by repeated bombings. The great expectations for the rapid expansion of Iraqi output were being punctured. Increasingly, the struggle was to maintain exports, especially in the north.
With his term as oil adviser over, Phil Carroll returned to the United States in the autumn of 2003. He was succeeded by Rob McKee, who had headed exploration and production for ConocoPhillips around the world.
“From the moment I got there, I saw that we didn’t have enough people on the ground to do what needed to be done,” said McKee. “Everything was broken. There was no police, no order, no courts, no infrastructure, and lack of electricity and water. Every day was a firefight, literally and figuratively. You’d come in the morning and get word that something had been blown up or looted. And then you’d figure out how to get that fixed before you could turn back to the longer-term, bigger issues.”
On top of that were the procedures of the U.S. government. “All the bureaucracy over bidding and contracting, all that slowed things down to a crawl,” said McKee. “That was the most frustrating thing I had to deal with.”20
THE IRAQI DISRUPTION
But such was the effort that output in 2004 did come close to the prewar levels in several months but, for the year—as a result of the violence and of the economic disarray and electricity shortages—was more than 20 percent lower. Exports were often disrupted. In what could have been a disaster, two suicide bombers in a motorized dinghy came close to blowing up part of the critically important offshore oil export terminal, but the craft exploded short of its target. Naval patrols, thereafter, were much tighter.
As the insurgency stepped up its attacks, the effect was being felt in the world oil market. “Last week’s attacks on key pipelines,” reported Petroleum Intelligence Weekly in June 2004, “have reduced exports of around 1.6 million barrels per day to zero with no immediate prospect that they will resume. While bad enough for Iraq, the export outage has left world oil markets with a tiny sliver of spare capacity concentrated in Saudi Arabia.... Global oil supplies have relatively little slack.”21
Again and again, exports were reduced or temporarily halted. In the years following the invasion, Iraqi production remained, at best, at only two thirds of capacity. It was not until 2009 that it was able, on an annual basis, to reach the prewar level of 2001, itself still considerably below the kind of potential that the country could achieve with investment. Before the war there had been high expectations about how Iraq’s growing output would contribute to stability in the world oil market. Instead Iraq’s beleaguered oil industry, producing well below its capacity, ended up contributing, on a sustained basis, to the toll of the aggregate disruption.
WHAT DID YOU LEARN?
In the autumn of 2003, when Phil Carroll, the first oil adviser, finished his tour, he stopped in Washington on his way back to Houston to visit the Pentagon. He was taken in to see Defense Secretary Rumsfeld. The secretary mainly had two questions for Carroll: “Did you enjoy it?” And, “What did you learn?”
There was not much more to the discussion than that. Carroll headed on home.
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