Petrodollar Warfare: Oil, Iraq and the Future of the Dollar [Paperback]

William R. Clark (Author)

Book Description

Publication Date: May 1, 2005

The invasion of Iraq may well be remembered as the first oil currency war. Far from being a response to 9/11 terrorism or Iraq’s alleged weapons of mass destruction, Petrodollar Warfare argues that the invasion was precipitated by two converging phenomena: the imminent peak in global oil production and the ascendance of the euro currency.

Energy analysts agree that world oil supplies are about to peak, after which there will be a steady decline in supplies of oil. Iraq, possessing the world’s second-largest oil reserves, was therefore already a target of US geostrategic interests. Together with the fact that Iraq had switched to paying for oil in euros—rather than US dollars—the Bush administration’s unreported aim was to prevent further OPEC momentum in favor of the euro as an alternative oil transaction currency standard.

Meticulously researched, Petrodollar Warfare examines US dollar hegemony and the unsustainable macroeconomics of ‘petrodollar recycling,’ pointing out that the issues underlying the Iraq war also apply to geostrategic tensions between the United States and other countries, including the member states of the European Union, Iran, Venezuela and Russia. The author warns that without changing course, the American experiment will end the way all empires end—with military overextension and subsequent economic decline. He recommends the multilateral pursuit of both energy and monetary reforms within a UN framework to create a more balanced global energy and monetary system—thereby reducing the possibility of future oil and oil currency-related warfare.

A sober call for an end to aggressive US unilateralism, Petrodollar Warfare is a unique contribution to the debate about the future global political economy.

William R. Clark is manager of performance improvement at Johns Hopkins University School of Medicine. His research on oil depletion, oil currency issues and US geostrategy received a 2003 Project Censored Award and was published in Censored 2004. He lives in Columbia, Maryland.

Editorial Reviews

About the Author

William Clark is Manager of Performance Improvement at Johns Hopkins University School of Medicine. His research on oil depletion, oil currency issues and U.S. geostrategy received a 2003 Project Censored award, published in Censored 2004. He lives in Columbia, Maryland.

Product Details

• Paperback: 288 pages
• Publisher: New Society Publishers (May 1, 2005)
• Language: English
• ISBN-10: 0865715149
• ISBN-13: 978-0865715141
• Product Dimensions: 9.1 x 0.8 x 6.1 inches
• Shipping Weight: 15.2 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (22 customer reviews)
• Amazon Best Sellers Rank: #352,297 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

56 of 61 people found the following review helpful

5.0 out of 5 stars Is the dollar the most vulnerable keystone of US empire? September 30, 2005

By Richard H. Burkhart

Format:Paperback|Amazon Verified Purchase

I'd been somewhat skeptical of claims that Bush's Invasion of Iraq had much to do with the dollar versus the euro. After reading "Petrodollar Warfare" I came to understand that the strength of the dollar, and its status as the world reserve currency, came from the fact that it has, in effect, been backed by oil since Nixon went off the gold standard. That is, you can always trade in your dollars at a reasonable exchange rate for the world's most valuable resource, oil. In fact, most countries must buy or trade for dollars to buy oil, propping up the value of the dollar. The International Monetary Fund has been a key enforcer of this dollar monopoly, especially among the poorer countries of the world.

The "warfare" comes from the fact that Saddam Hussein switched his oil sales from dollars to euros in 2000, also that Iran is planning to open an energy market (Bourse) in euros in the spring of 2006. Clark makes a compelling case that "maintaining the dollar as the World Reserve Currency was a major component of the Bush administration's push for the Iraq War". Because of this the US enjoys almost unlimited credit compared to other countries, way beyond its actual economic productivity. Loss of this credit would entail dramatic belt-tightening in the US combined with major inflation, rivaling the Great Depression.

So far Bush's strategy has worked. But there is widespread fear, even by some financial authorities, that this is about to end as US debt spirals into the stratosphere to finance militarization and consumption, not productive investments. Clark points out that China, which recently signed a $70 billion oil and gas deal with Iran, could decide to dump its dollars if the US attacks Iran to head off the new Bourse. However this would shatter both China's industrial expansion and economic globalization as we've come to know it. Opportunity for a more democratic world order would lie in such a crisis, but also extreme risks of global economic depression and/or warfare.

Clark lays out very well the sordid history of US geostrategy related to oil and the Middle East and the developing Peak Oil crisis. But unlike many other books on this subject, he delves deeply into the likely financial crisis, though he does not explain the current strength of the US dollar. He describes sensible measures to prevent this crisis, including adding the euro as a second International Reserve Currency. However, he is not sanguine that much will happen "unless a significant global financial crisis occurs".

Unmentioned by Clark is the push toward a new global currency, and associated banking system, backed only by the actual or anticipated value of energy and other natural and human resources. This would not only enforce Colin Campbell's proposed oil "Depletion Protocol" but would also transform the global economy to work toward sustainable development without ecological or economic collapse.

26 of 28 people found the following review helpful

5.0 out of 5 stars Choosing the path to powerdown September 9, 2005

By Richard Kerver

Format:Paperback

The people of the United States must regain its democratic control over the large rogue politic which underpins the Bush/Cheney/Wolfowitz administration, which allows for economic warfare disguised as, take your pick: 'war on terror', 'liberation of the Iraqi people', 'the preservation of democracy', etc. ad nauseum. Those in the broader community who understand Peak Oil as the natural limit by which the US economy can grow, also understand what Richard Heinberg aptly describes as the option of "last one standing - The path of competition for remaining resources."

There are other options and William Clarks's book adds considerably to the necessary public debate by which we, the American people, must first understand what is happening, and secondly, assert our values which choose life and freedom. The path is clear and it entails a shift to renewable fuels on a massive scale, huge conservation efforts, and vastly improved energy efficiencies. Its the option to "powerdown." Unfortunately, the time is quickly running out for choosing that path. War with Iran, by Israel, with considerable US backing, may now be inevitable, because of Iran's necessary choice for economic self preservation in the face of US hegemony to preserve the petrodollar. And when the bombs start dropping, we'll be irrevocably locked into World War III. Its time for all of us to become strident, with ourselves in our inanity, each other, and most importantly, with our representatives in Congress.

A few notable quotes from the book:

"Only in the United States and Britain did the majority of people indicate that the campaign against terror was a sincere effort to reduce international terrorism."

"Despite its omnipotent military power and current position as the largest economy in the world, the US has become an increasingly fearful and isolated nation, ... instilled with a belief that America is so vulnerable to a small rogue group of terrorists that it must engage in a worldwide 'war on terror'."

"Before 1985 the United States had been a net creditor, gaining more from its foreign investments than it paid to them in interest on Treasury bonds or other US assets. However,since the end of the cold war, the US has become the world's largest debtor nation."

"The oil price shocks of 1973-1974 and again in 1979 resulted in the formulation of aggressive geostrategic planning that included a US military invasion to gain control over the oil reserves in the Persian Gulf. The origins of the policies become public in 1975, when Henry Kissinger stated the US was prepared to wage war over oil."

"The Middle East is reported to contain approximately 65 percent of the world's 'proven' oil reserves... it is typically accepted as factual that Iraq alone has a reported 11 percent of the world's proven reserves, an estimated 112 billion barrels."

"All objective oil geologists agree that global Peak Oil will occur - the real debate centers around exactly when it will happen."

"Americans must demand that our government begin the long and difficult journey toward energy conservation, the development of renewable energy sources, and sustained balanced budgets that allow real deficit reduction."

19 of 21 people found the following review helpful

5.0 out of 5 stars The Real Reasons for the War in Iraq September 20, 2005

By Craig Hall

Format:Paperback

This book challenges us to comprehend the macroeconomic motivations of our U.S policy makers over the last 60 years to do two things. 1. Make the U.S. dollar the standard world currency for oil. 2. Ensure that the U.S. can control oil resources in order to sustain this dominance through superpower military superiority. William R. Clark makes a compeling case against our current positions in foreign and economic policies based on the fact that the world's oil supplies have reached peak production and are now in decline. His scenarios are not all bleak and depressing. His solutions for the next generations of energy supply give us some hope that the human species may be sustainable through alternative energy sources and a change in the way we American's squander carbon based fuels.