The Oil and the Glory
Paul Wolfowitz and the eternal return of energy optimism
Political hope and geological hype are never all that far apart. On the Caspian Sea in the 1990s, the hype came in the form of a U.S. government estimate that the sea — the venue of a nascent geopolitical struggle for influence between Washington and Moscow — held 200 billion barrels of oil. The true ...
Political hope and geological hype are never all that far apart. On the Caspian Sea in the 1990s, the hype came in the form of a U.S. government estimate that the sea — the venue of a nascent geopolitical struggle for influence between Washington and Moscow — held 200 billion barrels of oil. The true figure was closer to about 30 billion barrels, but never mind — the estimate helped to fuel a Western-led oil boom that climaxed with the construction of the U.S.-backed Baku-Ceyhan pipeline, which, at least for the moment, broke Russia’s economic grip on its former southern colonies.
This week, of course, has seen a much-discussed New York Times story on Afghanistan’s purported $1 trillion in mineral riches, which my FP colleagues, including Steve Walt, have discussed. Again, the subtext is, "This nation can stand on its own two feet."
Perhaps the most famous example of this, however, was then-Deputy Defense Secretary Paul Wolfowitz’s suggestion before Congress in 2003 that Iraq’s oil reserves would cover the cost of the country’s reconstruction after a U.S. invasion.
Wolfowitz was attempting to bat away worries about the cost of the war, and pegged Iraq’s potential oil revenues at somewhere between $50 billion and $100 billion. Today, Iraq does indeed enjoy revenues on the low end of Wolfowitz’s estimate from the 2.5 million barrels a day of oil that it produces, on which Baghdad relies to cover the strained state budget. But virtually none of it has gone toward reconstruction — the U.S. has paid for that, to the tune of $50 billion out of an estimated $728 billion total spent on Iraq, according to the National Priorities Project.
I’m bringing this up again because Wolfowitz, who went to ground after resigning as World Bank president in 2007, resurfaced for the first time over the weekend in an interview with Fareed Zakaria, who asked about the congressional hearing.
Here are Wolfowitz’s remarks at the March 27, 2003 hearing, taken from the official transcript from the Federal News Service. He is responding to a question about the cost of reconstruction:
I mean — we really don’t [know what it will be]. And the real number would be not what’s going to get you through the rest of the fiscal year, but what is it going to be over two to three years. And my — a rough recollection — well, I’m — the oil revenues of that country could bring between 50 and 100 billion dollars over the course of the next two or three years. Now, there are a lot of claims on that money, but that’s — we’re not dealing with Afghanistan that’s a permanent ward of the international community. We are dealing with a country that can really finance its own reconstruction and relatively soon.
In Sunday’s interview, the moment Zakaria brings this up is the only one in which Wolfowitz stumbles (the question comes at about 11:30 in the podcast).
Here’s a transcript:
Wolfowitz (responding to Zakaria): "Wait, wait Fareed, I was asked how much the war would cost. I said we had no idea how much the war will cost. I said that Iraq unlike Afghanistan is not going to become a permanent ward of the international community.
Zakaria: You said that we are dealing with a country that can finance its reconstruction, and relatively soon.
Wolfowitz: After the end of conflict. This war went on, in fact to some extent it still goes on today, and at this point I think Iraq is largely, I don’t know the numbers now. Okay I was somewhat, the sense was that the war wouldn’t last for six, seven years, and that this was a country with substantial oil resources.
There you have it: When government officials argue the resource wealth of countries in defense of a war they either wish to fight or are already prosecuting, they aren’t subject to the same rules as companies selling shares on the New York Stock Exchange. What they say doesn’t have to be verifiably true; it only needs to reflect their "sense" at the time.