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Blood of the Earth: Dilip Hiro on the Battle for the World’s Vanishing Oil Resources

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In his new book, veteran Middle East journalist Dilip Hiro offers a detailed account of how and why the planet’s limited supply of oil has come to revolutionize human behavior, politics and warfare across the globe. He joins us for a wide-ranging interview. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: As scientists in Paris finalize their report on the adverse effects of human-caused emissions on climate change, a new book offers a detailed account of how and why the planet’s limited supply of oil has come to revolutionize human behavior, politics and warfare across the globe. It’s called Blood of the Earth: The Battle for the World’s Vanishing Oil Resources, a detailed account of the history of oil, reveals that when states replaced coal with oil, they scrambled to meet an unprecedented global energy demand. The book details how states have attempted to meet that growing thirst for oil through economic expansion and all-out war. It also explores developments in alternatives or renewable sources of energy.

We’re joined now by the book’s author, Dilip Hiro, veteran journalist in the Middle East. His trilogy of books on Iraq and Iran are considered some of the most definitive histories of the wars in the Persian Gulf. Welcome to Democracy Now! How did oil become so central, Dilip Hiro?

DILIP HIRO: I think oil became important when the internal combustion engine was fueled by petroleum. See, in 1905 that happened. Before that, you could fuel internal combustion engine with electricity or with steam. You know, but then oil proved to be the most important. And then, 1905, Henry Ford, his mass production of cars, that really made the whole thing go up.

And in terms of warfare, it was during World War I that in the tank, internal combustion engine was fueled by petroleum products. And that made the whole technology, certainly of war, change in the way like the first finding of gun powder in 1041. Because, see, as a general you could now — see, before that, they had to depend on horses, cavalry, and the horses had to be fed, they had to rest and so on. But once you had a tank, you could go 30, 40 miles in a day. And that changed the whole way the war was fought. So oil is very important.

AMY GOODMAN: You begin your book with the Nobel brothers.

DILIP HIRO: Excuse me?

AMY GOODMAN: The Nobel brothers, who —

DILIP HIRO: Oh, yes, yes.

AMY GOODMAN: — who introduced the first oil-fueled steamship.

DILIP HIRO: Absolutely, Amy. You know, of course, there is a great book by Daniel Yergin called The Prize. You know, and when he goes on, it’s in 1859 in Titusville, Pennsylvania, oil was first drilled properly. I’m sorry, he is wrong. It first happened near Baku in 1846, and it was a Russian engineer, he did that. And everything we know about oil happened there first. It was first in the Caspian they changed from coal to oil. It was the first time in that part of the world they set up oil pipeline made of wood. For the first time, they had a tanker, oil tanker. So all of that actually originally comes from Azerbaijan and Baku. And, of course, you mentioned Nobel brothers. And, of course, you know, Rothschilds, they made their money there, as well. So I think the oil has been so important.

But what I have done in my book, I point out there was local Azeris who became very rich. One of them was totally illiterate, but he had a most wonderful library, and he built something like 135 buildings. So, I think the oil has been this very powerful mineral.

AMY GOODMAN: Can you talk about the history of countries nationalizing oil?

DILIP HIRO: Absolutely. You see, initially, of course, America was very much ahead in terms of extraction. You know, they were competing with Azerbaijan. But by the turn of the century, America took off because it’s much bigger, and more energy was put into it. And at that time, countries in the Persian Gulf area, you know, like Saudi Arabia, Kuwait, etc., etc., they did not have the technology, and so they were courting foreign companies, especially British companies, to come and find oil. And in the whole region, it was the British company, Anglo-Persian Oil Company, which got a contract. Except where? In Saudi Arabia.

In 1933, the Saudi king gave a concession to the Standard Oil Company of California. And from that day onwards, as we speak now, the nexus between Saudi Arabia and Washington, D.C., is so tight, that despite the fact that 15 out of 19 hijackers were Saudi citizens, nothing changed. Two days after 9/11, George W. Bush was smoking cigars around with the Saudi ambassador, Prince Bandar. Well, you know, he’s called not Prince Bandar, he’s called “Bandar Bush.” So, you see, that oil is absolutely and definitely important in shaping diplomacy.

Now, in terms of oil nationalization, it only came after 1973 Arab-Israeli war, because then oil price went up and those countries had more money, and so they bought up the foreign companies, you know, Western companies.

AMY GOODMAN: Let’s continue on the theme of Saudi Arabia and Washington, which you document well and you take us to Texas, as well. And particularly talk about the intermingling of the Saudi royal family and the Bush family in the United States.

DILIP HIRO: Absolutely, Amy. See, some of the things that I found, you know, they are actually something which can give you sleepless nights. Honestly. In the U.S.A. — I’m talking over land, I’m not talking offshore — in the U.S.A., there are half a million oil wells, and their output is about five million. On an average, the U.S. oil well produces 10 barrels a day. And I have been to Qatar. I have been to Kuwait. In that part of the world, oil well produces 2,500 barrels a day, 250 times more. Now, if you go to Qatar or Kuwait and say, “Have you seen a donkey pump?” they say, “What? I mean, we you don’t have donkeys here.” This pump that goes up and down, which you can see all over Texas and California, they don’t exist in the Persian Gulf area. Why? Because the pressure, natural pressure is so high that you don’t have to pump it out. You know, and that explains so much.

Another figure: In 1935, the U.S.A. produced 64 percent of world oil. Last year, they produced 8 percent. That means oil has been used up. And remember, Richard Nixon in 1973, he was the first one, oil independence: We will be free of oil imports by 1979. And Jerry Ford came in. He said, “No, we’ll be free in 1985.” Jimmy Carter came in. He said 1990. And then we have George W. Bush, last year, he woke up and he said American addiction to oil is undesirable. And then, you know what happened in last State of the Union speech? He said, “We are going to give 22 percent more federal money for research into alternative fuels.” And the next day, The New York Times reported that the National Renewable Laboratory is sacking people —

AMY GOODMAN: Renewable Energy Laboratory.

DILIP HIRO: — including researchers on wind and ethanol. They were being sacked. So, you see, everything that comes from the White House you should really take it with huge pinch of salt.

AMY GOODMAN: But I want to stay in Texas right now, and how central Texas is to oil and how central the Bush and Saudi — or how connected the Bush and Saudi family are around this issue.

DILIP HIRO: Absolutely. You know, as I see, that part of the U.S.A. has 25 percent of oil reserves. And, you know, by World War II, Texas became extremely important. As you know, they were giving — federal government was giving concessions to drillers, and they could write off their investment very quickly, and so on. And there is a nexus within America between oil and power. John Rockefeller — David Rockefeller, he was the most important kerosene exporter. And, of course, as you know, the antitrust law came in because of his monopoly on oil. Oil runs through the history of the U.S.A. And so, there’s a nexus within big oil and the U.S. government, and even Franklin D. Roosevelt tried to save the interests of the oil companies, and so on.

And going back to Saudi Arabia, Saudi Arabia was very much in need of money, because they were a very poor country, and during World War II, very few people were going there for pilgrimage. From there, they used to get money. And so, there was a Lend-Lease Act, 1941, during World War II, and that could only be given to the countries which were fighting for democracy against dictatorship. So, Franklin Delano Roosevelt, he wanted to help the Saudi king, but what could he do? He said Lend-Lease Act is for Democrats, but this man is a dictator. So how can we help him? And somebody came up with the idea that Roosevelt should say that the defense of Saudi Arabia is essential to the defense of United States, 1943. That hasn’t changed. Again, it’s oil.

Why it happened during that time? Because when U.S.A. joined the Allies in World War II after December 1941, they supplied 80 percent of oil to the Allies. And therefore, they were pumping too much oil in the U.S.A., and that concerned the officials and they said, “We should look outside.” And Saudi Arabia was the one where they saw the possibility after World War II.

AMY GOODMAN: President Bush Sr. moved to Midland, Texas. Then George W. Bush also lived in Midland, Texas. What about the bailing out of the Bushes by the Saudi family?

DILIP HIRO: Yeah, absolutely. You know, Midland is the administrative and financial center of oil in Texas, OK? And, of course, I think it’s very nice to say Bush Sr. was a successful oil man. You know, he drilled 128 wells, all of them good. You know, I mean, it’s wonderful. So he made his first million dollars there. Then he moved to Houston. And so, you see, the conjunction of oil and politics is —- you know, it’s interlinked. And then you take Houston, Houston is the international center of oil, and that’s where the Saudis and the Kuwaitis, they put their money, buying up stocks and shares, and so on, and properties, etc., etc. And because they said, “We will put money behind a company which has political muscle, and anything with Bush, anything with Carlucci,” who was the defense secretary under -—

AMY GOODMAN: Frank Carlucci.

DILIP HIRO: Yeah, Frank Carlucci, under Reagan. And then —- and so, that’s where the money went. And if you look at the -—

AMY GOODMAN: And didn’t Carlucci also become head of the Carlyle Group?

DILIP HIRO: Yeah, of course. You know, they set up their own — this private — the Carlyle Group. And all of — a lot of the money has come from there. So there is this kind of conjunction there. Now, specifically about the failed oil man, otherwise known as George Walker Bush, his company was going down the drain and, lo and behold, his company got a contract from the ruler of Bahrain to do offshore drilling when his company had never drilled a single hole offshore. And that is when he got his leg up and became, in quotes, a “successful” oil man. So, I think, you know, I’m giving all these illustrations to show the nexus of oil within the U.S.A., and that particular connection going into the Persian Gulf area, Saudis, Kuwaitis, United Arab Emirates, and that is not going to change.

AMY GOODMAN: You talk about the role of oil in the current war in Iraq and the occupation, Dilip Hiro.

DILIP HIRO: Yeah, Amy, from page 133 to 148, I’ve got 15 pages of evidence that oil was an important factor for invading Iraq. And there is — one of the piece of evidence I point out, BBC television, Newsnight program, aired a special feature on oil in March 2005. And they got some of the papers in the U.S.A., Freedom of Information Act. Now, a very important man, an Iraqi American oil consultant called Falah Aljibury. And he said, within weeks of George W. Bush entering the White House, they made plans to take over Iraqi oil company — I mean, according to him. And Mr. Jibury had a long track: during the days of Ronny Reagan, he was a back channel between Ronny Reagan and Saddam Hussein Iran-Iraq War.

So he points out at this particular moment that two plans came out. One was a State Department plan, that once we overthrow Saddam Hussein then American money will go into the oil industry, will push up the output. There was a secret Pentagon plan, that we will take their oil and privatize it and give it away to foreign companies. And, of course, remember after Saddam Hussein’s statue came down April 9, 2003, all the ministries were allowed to be burned down. You know, mobs came out. They burned all the ministries, all the public buildings, except oil. You know, all the Pentagon soldiers were surrounding it, because oil wells they wanted to keep, you see?

Now, you might say why has this privatization not happened? I’ll tell you three reasons. One is that they found out that the Geneva Convention on war says that occupying country or power should not change structure —- fundamentally change the economy of the occupied country. You know, and privatizing oil would have been beyond the pale. Secondly, the most important leader in Iraq, Grand Ayatollah Ali Sistani said oil is the property of the nation. And so, they could not go against him. And thirdly, more importantly, after the word had spread that Americans are going to privatize oil, you know, the oil employees started to blow up pipelines. They stole the pumps, and so on, so forth, so that you had two acts of sabotage every week. And that’s where Bremer, who was the American -—

AMY GOODMAN: Paul Bremer.

DILIP HIRO: Yeah. Pro-consul, he sat back, couldn’t do it. And now it’s too late. Why? New Iraqi Constitution, Article 109, says hydrocarbons are the national property. So they can’t actually now change that. Within that, they can give concessions, but it will remain in the public sector.

AMY GOODMAN: James Baker, his report, the so-called Baker-Hamilton report, recommended — and this was not one of the recommendations that was highlighted by the corporate media in the United States — the privatization of Iraq’s oil.

DILIP HIRO: Yeah, I think, you see, privatization can happen this way. Iran and Kuwait, they do this. What you do is that, you know, of course, it — if the public sector belongs — you know, government or government-owned oil company, but when you give contracts — in the old days, when you give contracts, the foreign company owned the whole area. They owned the whole land, 1,000 square miles, or whatever. But what they do now — it’s even in Iran where they do that — they give it to a foreign company and they say, “Listen, you put your money into this. Invest some money, etc., etc. When oil comes out, we’ll pay you in oil.” And that’s called production sharing agreement. And that is the kind of thing which would happen in Iraq, because I can assure you, Amy, anything to do with America — American company, American citizens or even surrogates — if they try to do anything on oil, they will be attacked.

AMY GOODMAN: Dilip Hiro, very briefly, if you can talk about the centrality of oil in China and India?

DILIP HIRO: Absolutely, you see, India and China are not just two nations. They are mega-nations. Between the two of them, they have 40 percent of world population. Two out of five human beings are Indians and Chinese. Now, in China —

AMY GOODMAN: Two out of five —

DILIP HIRO: — human beings are either Indian or Chinese. So it’s not simply two nations. You know, it’s 2.4 billion people. Last year, China’s oil consumption went up by 15 percent. That means they’re doubling oil consumption every five years, quadrupling it every 10 years. And, you know, India, of course, 8 percent. And what kind of a potential exists?

I’ll give you a very quick figure. In the U.S.A., there are 800 vehicles — passenger cars, buses, minivans, etc., etc. — for 1,000 American men, women and children. In India, there are eight vehicles for 1,000 Indians, men, women and children. Now, suppose India progresses economically, and you change that figure from 8 to 18 or 80, can you imagine how much oil will be required? And that is something which one has to face up to. And as I show, you know, there’s what you call, you know, oil, any mineral, you have a bell curve, and peak will reach in 10 years’ time, and then you start to go down. And at that time, India and China, the demand will rise. So what will happen? The price of oil will go up to — take a deep breath — $200 a barrel.

And, you see, the only other way, if you don’t want to have sleepless nights, Amy, what you have to say is this: The internal combustion engine can be fueled by natural gas, by hydrogen cells and by solar panels. And that’s already happening. You know, Toyota actually has hundreds of cars running on hydrogen cells. They have supplies of them in Tokyo. And I would say in 10 to 15 years’ time, a high proportion of cars will be run by fuel other than petroleum product. And that is the only way we can actually save ourselves from a catastrophe, which will come if we go on the present path.

AMY GOODMAN: Dilip Hiro, I want to thank you very much for being with us. His book is called Blood of the Earth: The Battle for the World’s Vanishing Oil Resources.

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