Chapter Twelve: Russia and Cheney’s Oil Wars
Going ‘where the oil is’
“You’ve got to go where the oil is. I don’t think about it [political volatility] very much,” Cheney told a meeting of Texas oilmen in 1998 when he was still CEO of Halliburton, the world’s largest oil services company.
The Bush-Cheney Administration, which held power in Washington from early 2001 to 2009, had one clear strategic mission—to engineer control of the vast, mineral-rich Eurasian continent by dividing Russia from China, by militarizing the region from the Middle East to Georgia to Afghanistan, and controlling oil and energy pipelines across the entire Eurasian landmass.
The Pentagon called it Full Spectrum Dominance—control of all land, sea and air space, as well as outer space and even cyberspace. To accomplish such a grandiose plan, they used all available tactics — from outright military invasion to more subtle Color Revolutions — to create Washington-friendly regime changes, even in places such as Georgia and Ukraine.
Iraq and the China danger
Months before the events of September 11, 2001 – which conveniently provided the pretext for a war against Saddam Hussein’s Iraq — Vice President Dick Cheney had been giving a lot of thought to going ‘where the oil was.’ The Bush Administration’s primary agenda was to implement the PNAC plan for Iraqi regime change through war; Dick Cheney was its leading advocate inside the Bush Cabinet.
On January 23, 2001, just three days after George W. Bush’s inauguration, newly appointed Secretary of State Colin Powell was advised that US policy was to topple Saddam Hussein.
The situation was becoming critical for Washington’s hawks and for the major US and British oil companies. UN economic sanctions had been imposed in 1990 initially to force Saddam Hussein’s troops to leave Kuwait, where Washington had manipulated the Iraqi invasion to force Kuwait to allow permanent US bases and to push the oil price up. Now, more than a decade after the end of the first Iraq war, as Cheney himself admitted, those sanctions were being seriously undermined, both by Saddam Hussein and by oil-hungry countries eager to secure a chunk of Iraq’s vast undeveloped oil riches.
Washington was facing rising international pressure through the UN and across the world to lift the Iraqi sanctions. Ending the sanctions that had kept Iraqi oil controlled since 1991 was a major reason for the timing of the war, as Cheney himself implied after the US invasion was a fait accompli. 
On the eve of the invasion, Cheney also confirmed that Iraq held the world’s second largest oil reserves after Saudi Arabia. Some oil experts believed it could even be larger than Saudi Arabia’s. Moreover, Iraqi oil was extraordinarily cheap to extract, at a cost of less than $1 a barrel.
By the end of the 1990s most of Iraq’s unexploited oil had been contracted out to select foreign oil companies by a cash-strapped Saddam Hussein. The major prospects went to three foreign oil companies—Russia’s Lukoil, France’s Total and China’s National Petroleum Company. The three companies had all signed major exploration contracts with Saddam Hussein’s government, including production-sharing in some of Iraq’s biggest and most lucrative fields. Lukoil reached an agreement for West Qurna, Total got Majnoun, while China National was granted North Rumaila, near the Kuwaiti border.
Not surprisingly, France, Russia and China, as Permanent Members of the UN Security Council, and with support from an increasing number of other countries, pressed for an easing of US-led sanctions. Since Iraq had first nationalized its oil company in 1972, privately owned British and American oil companies had been prohibited by Iraqi law from doing business in Iraq – a primary reason Cheney and company clearly wanted Saddam Hussein out. A sanction-free Iraq able to do major oil business on its own with China, Russia and France was clearly not part of Washington’s blueprint for sole global superpower hegemony.
‘It was about oil…’
In October 2002 — some five months before the Bush Administration launched its near-unilateral invasion of Iraq — The New York Times revealed that Halliburton had prepared a confidential 500-page document on how to handle Iraq’s oil industry after an invasion and occupation of Iraq. This, said the Times writer, was “a plan [Halliburton] wrote several months before the invasion of Iraq, and before it got a no-bid contract to implement the plan.” 
As Washington well knew, the minute the stringent US-imposed economic sanctions against Iraq would be lifted by the UN, France, Russia, and above all, China stood to gain enormous oil provinces in the country. The US and UK had been able to keep those contracts inoperable so long as sanctions were in place, but as pressure grew to lift sanctions for humanitarian and other reasons, Washington clearly decided the risk of losing Iraqi oil to China and Russia and France was far too great strategically. War was the only option they saw.
The Iraq ‘regime change’ policy, which became active after the collapse of the World Trade towers, had nothing to do with Osama bin Laden or September 11 events, though Defense Secretary Rumsfeld and other hawks in the Bush national security team argued that a false propaganda campaign linking Saddam Hussein to Osama bin Laden should be invented to justify to the American people the forced invasion of Iraq. 
Deputy Defense Secretary Paul Wolfowitz admitted only weeks after the collapse of Iraq in 2003 that the invasion of Iraq was not about terrorism. It was about oil.
The Iraqi war in 2003 was about creating a permanent chain of US military bases in Iraq from which to control and police the entire oil-rich Persian Gulf, as Cheney so poetically put it, “where the oil is.” 
In June 2003, Wolfowitz told a conference in Singapore, “The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil.” 
By 2009, six years after the initial US invasion – now an occupation — Iraqi oil production had not yet reached its pre-invasion output levels. Washington and the US and British Big Oil majors were not interested in a flood of Iraqi oil depressing the oil prices that had just begun rising after the US invasion. Exxon and Chevron had been among the strongest voices pressing the Bush Administration for a military occupation of Iraq and its oilfields. They wanted to cut Iraqi oil flows for a considerable period and to control it as well. It was the implementation of Cheney’s 1999 London remarks about the need to, in effect, bring control into private—read Anglo-American oil giants’—hands and out of the control of Middle East governments.
War on Terror or War on Oil?
The 2001 invasion of Afghanistan and the 2003 invasion of Iraq were centerpieces of a new, long-term US strategy to militarize the entire Eurasian land space.
Back in 1997 Zbigniew Brzezinski, former US National Security Adviser and former executive director of David Rockefeller’s Trilateral Commission, revealed the new US global strategy: following the collapse of the Soviet Union, the US goal was to prevent, at all costs, the emergence of a Eurasian economic rival to American hegemony. Formulating this strategy at a time when Russia was struggling to survive, and well before the emergence of China as an economic giant, Brzezinski stated it in the boldest possible terms:
Eurasia is home to most of the world’s politically assertive and dynamic states. All the historical pretenders to global power originated in Eurasia. The world’s most populous aspirants to regional hegemony, China and India, are in Eurasia, as are all the potential political or economic challengers to American primacy. After the United States, the next six largest economies and military spenders are there, as are all but one of the world’s overt nuclear powers, and all but one of the covert ones. Eurasia accounts for 75 percent of the world’s population, 60 percent of its GNP, and 75 percent of its energy resources. Collectively, Eurasia’s potential power overshadows even America’s.
Eurasia is the world’s axial super-continent. A power that dominated Eurasia would exercise decisive influence over two of the world’s three most economically productive regions, Western Europe and East Asia. A glance at the map also suggests that a country dominant in Eurasia would almost automatically control the Middle East and Africa. With Eurasia now serving as the decisive geopolitical chessboard, it no longer suffices to fashion one policy for Europe and another for Asia. What happens with the distribution of power on the Eurasian landmass will be of decisive importance to America’s global primacy….
Brzezinski was revealing that US foreign policy was, in fact, based on the axioms of British geopolitics founder, Sir Halford Mackinder, who had long ago figured out the central geopolitical importance of Eurasia for empire builders. Brzezinski even mentioned Mackinder by name in the book version of his essay.
As Brzezinski clearly stated, US foreign policy — defending “America’s global primacy” — left no room for rival power blocs, above all not in Eurasia where a strategic partnership between China and Russia could deal a major blow to Washington’s agenda of total geopolitical control. He stressed, “it is on the globe’s most important playing field —Eurasia—that a potential rival to America might at some point arise.”
The new energy wars
The wars in Afghanistan in 2001-2002 and in Iraq after 2003 — wars which ultimately cost US taxpayers more than $1,000,000,000,000 (one trillion dollars) by 2010  — were but the opening shots of a series of geopolitical oil and energy ‘pipeline wars’ — undeclared wars, but wars in every sense of the word. They were wars, covert and overt, spanning territory that stretched from the Caspian Sea in Central Asia to the South China Sea, from the Indian Ocean on down to the Persian Gulf and deep into Africa.
The energy wars were fought with bombs, with terror tactics and with devastating new remote-controlled pilotless drones. They were often also fought with sophisticated new methods of political destabilization of uncooperative regimes through what were called Color Revolutions.
The goal was simple: Pentagon control of all significant global oil deposits in order to be able in the future to control the emerging Eurasian economic colossus, especially China and Russia. The goal would be achieved by any means necessary.
By 2003, the most urgent strategic priority for Washington — now that Iraq had been militarily occupied by US and (mainly) British forces — was the control of Russian oil and gas and Russian energy pipelines.
A major oil pipeline that could take the vast oil reserves of Azerbaijan’s Baku region to Western markets, independent of Russian pipelines, was a Washington priority. For that to happen, a coup in the tiny Republic of Georgia was deemed essential, as well as a similar coup in Ukraine.
If pro-US regimes could be installed in both countries, not only would the military security of Russia itself be mortally threatened, but also Russia’s ability to control the export of its natural gas and oil to Western Europe would be severely hampered.
Zbigniew Brzezinski, no mere ivory tower academic, acted as a semi-official representative of the geopolitics he espoused, even though he was no longer a government official. He became, in effect, an oil lobbyist.
In 2005 Brzezinski showed up to celebrate the opening of the very costly — and politically motivated — alternative pipeline that would pump Caspian Sea oil from offshore Baku in Azerbaijan, formerly part of the Soviet Union, to Western Europe. Azerbaijan, as noted earlier, was a priority focus of Washington after the breakup of the Soviet Union. Strategically located in the South Caucasus region at the crossroads of Eastern Europe and Western Asia, it was in the heart of Eurasia.
Azerbaijan was bordered by Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to the south. It also sat on huge reserves of oil, as Dick Cheney knew from his days as CEO of Halliburton. In 1998 the US State Department had officially estimated that the Caspian region had reserves of oil and gas of 178 billion barrels or more, potentially making it one of the largest untapped oil regions then known. Such numbers were significantly higher than previous estimates during the Soviet era, as new data had been collected using advanced 3D seismic survey technology.
By comparison, the United States had known reserves of some 21 billion barrels, while the North Sea oil fields held an estimated 16 billion barrels. 
The world’s largest oil reserves were in Saudi Arabia, at that time estimated officially at 261 billion barrels. In short, Caspian Sea oil, like the oil in Iraq, was yet another “prize” worth grabbing, to use Cheney’s term.
Soon after the first public euphoria about Caspian Sea oil riches, the US State Department began to dramatically downplay the significance of Caspian oil. In a May 1998 broadcast, the US Government’s Radio Free Europe/Radio Liberty began a campaign to discredit talk of the Caspian Sea being a new Saudi Arabia in order to discourage investment in the region.  The less people realized the importance of oil in the region the better, thought Washington.
Meanwhile, British and American oil majors moved quietly and swiftly to take control of Caspian oil and gas resources. Along the northeastern shore of the Caspian Sea in Kazakhstan, Condi Rice’s old company Chevron took the major share of the huge Tenghiz field, while BP-Amoco, the British-US oil giant, dominated development in Azerbaijan’s part of the Caspian Sea around Baku.
By 2001 the Caspian Sea, the largest enclosed body of water on Earth, was rapidly becoming an Anglo-American lake in terms of oil control. Only Iran remained beyond their grasp and they were working on changing that, as well.
The problem in controlling the Caspian oil was building a secure pipeline from the Caspian oil fields that would bypass Russia and further weaken their former Cold War rival as a re-emerging Eurasian power.
Here Brzezinski stepped in to lobby hard for Washington investment in a major US pipeline running from Baku overland through the new Republic of Georgia, and from Tbilisi in Georgia over to NATO member Turkey and its Mediterranean port of Ceyhan. This would become known as the ‘BTC pipeline.’
Washington’s Rose Revolution
Now serving as the chief paid lobbyist for BP, Brzezinski used his impressive Washington connections to push the Baku-Tbilisi-Ceyhan oil pipeline even though costs were vastly more than would have been the case if the pipeline had been laid along existing Russian routes, including through Chechnya.
Brzezinski had been a consultant to BP since the late 1990s, during the Clinton era, when he first urged Washington to back BP’s Baku pipeline project, even acting as Clinton’s unofficial envoy to Azerbaijan to push the deal. He was on the board of the US-Azerbaijan Chamber of Commerce (USACC), whose chairman was also President of ExxonMobil Exploration.
Other USACC Board members included Henry Kissinger, and James Baker III, who in 2003 went to Tbilisi to tell the President, Edouard Shevardnadze that Washington wanted him to step aside in favor of the US-trained Mikheil Saakashvili. Brent Scowcroft, former National Security Adviser to George H.W. Bush, also was on the board of USACC. Dick Cheney was also a board member before he became Vice President. A more high-powered Washington team of geopolitical fixers would be hard to imagine. Caspian Sea oil control was clearly high on the Washington agenda.
In November 2003, Brzezinski’s geopolitical oil agenda moved forward as the US State Department and a group of Non-Governmental Organizations it influenced — including the National Endowment for Democracy, the Freedom House and several others — orchestrated a bloodless coup in Georgia.
In January 2004, the so-called Rose Revolution put into power Washington’s candidate for President of Georgia, Mikheil Saakashvili. He had been clearly groomed for the job while studying at Columbia Law School. Saakashvili’s first call as President was for Georgia to join NATO, a demand that did not go down well in Moscow. 
With the pro-NATO Saakashvili firmly installed as their man in Tbilisi — euphemistically called a democratic revolution — BP and the Anglo-American oil consortium moved swiftly to complete an 1800 kilometer pipeline from Baku via Tbilisi to Ceyhan in Turkey’s Mediterranean, at a cost of some $3.6 billion, making the BTC pipeline one of the most expensive oil projects in history. BP’s controversial chairman, Lord Browne, a close adviser to Britain’s Tony Blair, played a key role in wooing Azerbaijan to the British oil company.
With construction of the Baku-Tbilisi-Ceyhan pipeline for BP’s Baku/Caspian oil, a major part in the weakening of Russia’s oil and energy independence appeared in place.
Tbilisi to Kiev: Ukraine’s Orange Revolution
Within weeks, Washington moved even closer to Moscow’s doorstep by financing what CNN and other western media called the “Orange Revolution.” In November 2004, eight months after the Georgia coup, Viktor Yushchenko—whose wife was an American citizen who had served in the Reagan Administration—became Ukraine’s controversial new President. The US State Department reportedly spent more than $20 million to get their man in as President. Another ‘democratic’ revolution.
Ukraine, far more even than Georgia, was of utmost strategic importance for Russia’s national security. To begin with, Russia and Ukraine shared centuries of interwoven history, culture and language, with Kievan Rus being considered the birthplace of modern Russia. Political control of Ukraine could potentially give Washington control of most of Russia’s Soviet-era natural gas pipelines. Ukraine’s pipelines brought Russian natural gas from Siberia to Germany and other parts of Western Europe — in return for desperately needed dollars or euros for the government of Vladimir Putin. Moreover, because of the nature of Soviet economic integration during the Cold War, the state economies of Ukraine and Russia were organized as virtually one large entity. To cut that at the Ukrainian border dealt a devastating blow to Russia at a time when it could ill afford such a loss.
With Poland already in NATO, a NATO membership for Ukraine and Georgia would almost completely encircle Russia with potentially hostile neighbors, creating an existential threat to the very survival of Russia itself.
Putin knew this, but his options were limited. Washington knew what the stakes were, and it was doing everything short of open war against a nuclear opponent to push the agenda.
As of 2004, the very heartland of Eurasia was under threat of becoming swallowed up by NATO in a new, if undeclared, Cold War — this one being fought over energy pipelines rather than over ICBMs.
US and British oil companies had gained control over most of the vast oil of the Caspian Sea from Kazakhstan to Azerbaijan. The British oil giant BP had wrangled a strategic joint venture with a major privatized Russian oil company, Lukoil, Russia’s second largest and in 2003 created TNK-BP, a joint venture with Russian partners and creating one of the ten largest private oil companies in the world. ExxonMobil and Royal Dutch Shell had secured major rights to develop vast oil and gas reserves in the Russian Far East on Sakhalin Island, where they began drilling in 2003. Those deals had been secured during the chaotic, ultra-corrupt Yeltsin days just after the collapse of the Soviet Union when American dollars could literally buy anything for a song.
The Bush-Cheney strategy of controlling “all oil everywhere” seemed well within reach as Russia, the world’s second largest oil producer and by far the largest natural gas producer and exporter, appeared to have become encircled by a web of hostile regimes.
While Moscow tried to counter the Washington energy strategy with its own energy initiatives, in most strategic respects Moscow appeared significantly under ‘containment’ by 2004.
Meanwhile, what began to preoccupy Washington increasingly at that point was the other major, rapidly growing Eurasian power—The Peoples’ Republic of China — fast emerging as the world’s economic colossus. Oil would be used as a weapon of control there, as well, but in an entirely different manner than with Russia.
 Dick Cheney, as cited in Kenny Bruno and Jim Valette, Cheney & Halliburton:
Go Where the Oil Is, Multinational Monitor magazine, May 2001, accessed in http://www.thirdworldtraveler.com/Oil_watch/Cheney_Halliburton.html
 For a detailed description of the Pentagon’s military agenda following the collapse of the Soviet Union, see F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, Wiesbaden, edition.engdahl, 2009.
 Edward S. Walter Jr, Information Memorandum to Secretary Colin Powell on Origins of the Iraqi Regime Change Policy, January 23, 2001, reprinted in National Security Archives, The Iraq War — Part I: The US Prepares for Conflict, 2001, accessed in http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB326/index.htm
 Dick Cheney, Vice President and Mrs. Cheney’s Remarks in Wilmington, Ohio, October 26, 2004, accessed in http://georgewbush-whitehouse.archives.gov/news/releases/2004/10/20041026-7.html
 Tim Russert, Interview with Vice-President Dick Cheney, NBC ‘Meet the Press,’ Transcript for March 16, 2003, accessed in http://www.mtholyoke.edu/acad/intrel/bush/cheneymeetthepress.htm
 James A. Paul, Oil Companies in Iraq, Global Policy Forum, November 2003, accessed in http://www.globalpolicy.org/component/content/article/185/40586.html
 Maureen Dowd, cited in Dilip Hiro, Greenspan’s Oil Claim in Context, TomDispatch,
September 25, 2007, accessed in http://www.globalpolicy.org/component/content/article/185/40693.html
 Global Policy Forum, Oil in Iraq, accessed in http://www.globalpolicy.org/iraq/political-issues-in-iraq/oil-in-iraq.html
 Dan de Luce, Bush Officials Intent Early on Iraq Invasion Papers Suggest, AFP, September 23, 2010.
 In a September 6, 2003 interview with the London Guardian, the just-fired UK Environment Secretary Michael Meacher declared that the reason for Tony Blair’s unflinching backing of Bush and the Iraq war was pressure from BP to get a major piece of the oilfields of southern Iraq. See Michael Meacher, Oil: The Great Unmentionable, July 15, 2010, accessed in http://www.michaelmeacher.info/weblog/2010/07/oil-the-great-unmentionable/#more-1159.
 US General Jay Garner who headed the first Iraq occupation administration after 2003, openly admitted that establishing a permanent network across Iraq of US military bases was a prime reason for the war. See Jim Lobe, Chalabi, Garner Provide New Clues to War, February 21, 2004, Inter Press Service, accessed in http://www.globalpolicy.org/component/content/article/168/36459.html
 George Wright, Wolfowitz: Iraq war was about oil, The Guardian, London, June 4, 2003. Some years after retiring as chairman of the Federal Reserve, Alan Greenspan also admitted that oil had been the reason for invading Iraq. Greenspan stated in his memoirs, The Age of Turbulence, “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” (see Dilip Hiro, op. cit.).
 Gina Chon, Iraq’s Oil Minister on Defense, The Wall Street Journal, June 4, 2009, accessed in http://online.wsj.com/article/SB124403446631581149.html
 James A. Paul, op. cit.
 Zbigniew Brzezinski, The Grand Chessboard: American Primacy And Its Geostrategic Imperatives, New York, Basic Books, 1998, p.31.
 Ibid, p. 38.
 Ibid, p. 39.
 National Priorities Project, Total Cost of Wars Since 2001, accessed in http://costofwar.com/
 Adil Baguirov, Caspian Oil Reserves, Azerbaijan International, Summer 1998 (6.2), p. 58, accessed in http://azer.com/aiweb/categories/magazine/62_folder/62_articles/62_mediawatch.html
 F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, 2009, edition.engdahl, Wiesbaden, pp. 41-43.
 Indicative of how the British Blair government and BP got the lucrative Baku oil rights, Les Abrahams, a former BP executive who admitted being hired also to work for British MI-6 intelligence, told the British media in 2007 that he spent £45 million over just four months of negotiations with Azerbaijan’s state oil company. In a revealing article, the UK Daily Mail recounted Abrahams’ story: “Armed with a no-limit company credit card, he ordered supplies of champagne and caviar to be flown on company jets into the boomtown capital, Baku, to be consumed at the ‘sex parties.’ The hospitality continued in London, where prostitutes were hired on the BP credit card to entertain visiting Azerbaijanis. Mr Abrahams, an engineer by training, joined BP in 1991, just as the disintegration of the Soviet Union had triggered a ‘new gold rush’ by oil multi-nationals seeking a share of the 200 billion barrels of oil reserves beneath the Caspian Sea. While employed by BP, Mr Abrahams says he was persuaded to work for MI6 by John Scarlett, now head of the service but then its head of station in Moscow. He says he was passing information to Scarlett in faxes and at one-to-one meetings in the Russian capital. He also claims that BP was working closely with MI6 at the highest levels to help it to win business in the region and influence the political complexion of governments.” (Glen Owen, Hookers, spies, cases full of dollars…how BP spent £45m to win ‘Wild East’ oil rights, UK Daily Mail, May 13, 2007, accessed in http://www.prisonplanet.com/articles/may2007/130507Hookers.htm). Lord Browne himself ended his career as head of BP abruptly in 2007 when a UK judge issued a court ruling upholding testimony of Browne’s jilted boy lover, a young Canadian named Jeff Chevalier, that gave details of Browne’s secret extravagant gay life. (London Evening Standard, Damning judgement that finished Lord Browne’s career, 2 May 2007, accessed in http://www.thisislondon.co.uk/news/article-23394667-damning-judgement-that-finished-lord-brownes-career.do).
 F. William Engdahl, op. cit., p. 46.