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DAVID FROST: Well yesterday marked another day of protest, milder protest against the war, with several thousands of protestors marching in Australia, Britain and a string of other countries. As in previous demonstrations, opponents to the war make it clear from the placards carried that they're convinced that oil is the reason the Americans are bent on ousting Saddam. Iraq has the second largest oil reserves in the world and however much George Bush may deny it there are those who believe that he's determined to gain control of that oil. And with me is the Green MEP Caroline Lucas, welcome Caroline, and Dan Yergin, whose is a Pulitzer prize winning author and a world authority on oil and international politics and chairman of the Cambridge Energy Research Associates. Welcome to you to.
DAN YERGIN: Good morning.
DAVID FROST: Caroline, why do you think that oil is at the centre of this crisis?
CAROLINE LUCAS: Well, I think what's at the centre is the US trying to consolidate its economic power and oil is an absolutely key part of doing that. We know how dependent the US is on oil imports. They depend on it for 60% of their oil needs. We also know how insecure Saudi Arabia is as far as the US is concerned, they can't guarantee oil supplies from there. The Iraqi oil is a fantastic opportunity for them, it's cheap, it's good quality, vast quantities. And also, if you look back at 1998 there was a famous letter from some of the key hawks now in the Bush Administration. People like Perle Rumsfeld who actually wrote to President Clinton back in 1998 saying please let's change US foreign policy, please let's make it about getting rid of Saddam Hussein, getting access to oil. And that is really what this is about.
DAVID FROST: You don't think that's right, do you Daniel?
DAN YERGIN: No David, I think these questions are so momentous that it's really important to be fact-based and not do things that sound like they would be good for a thriller novel or for a motion picture. 90% of the US oil is either produced within the US or comes from neighbouring countries in the Western hemisphere. The major countries that are consuming Middle East oil are countries - and the growth is going to be - China, India, the things we talk about in Commanding Heights because of this fantastic economic growth. And it boggles the mind to think that Tony Blair would risk his political future and take all of these risks because of oil contracts.
DAVID FROST: What about the situation, I mean, George Bush has said that the oil will be in trust for the Iraqi people and so on. That's obviously the production of the oil. But is there is fortune to be made in the distribution as it were, to use a movie term? The distribution of that oil by huge American companies
DAN YERGIN: Well I think that at the end of the day the decisions will be made that if there is a war by a new Iraqi government and they're going to have a whole host of different countries, companies that will be British, American, but they'll also at the end of the day be Russian, French, Chinese, Malaysian, Japanese companies there, because the Iraqis will need $30 billion invested in their industry to develop it and that means they're going to be looking for companies all over the world, and the other thing is I think the Iraqis are going to be very tough in terms of negotiating terms.
CAROLINE LUCAS: But the Iraqi national congress ready to go in there to be the new regime have said categorically that the US will have a very good cut of any new oil deals there. So let's be clear about this. There's been a real tug of war between the US and UK oil companies on the one hand, French and Russians on the other. At the moment the French and Russians have the upper hand, they have with China £38 billion worth of contracts ready to come on to stream after sanctions are lifted. Now for the US and UK oil companies to try and get access to that it's in their interest to have regime change, that is what they have been ... from Mr. Chalabi from the Iraqi -
DAN YERGIN: ... I want to come in there because -
DAVID FROST: All right.
DAN YERGIN: - because first of all -
DAVID FROST: Absolutely.
DAN YERGIN: - the IFC is just one group, we don't know who the government's going to be, all of this 38 billion dollars, many of those contracts have not even been initialled. There's enormous grist there for any companies going in, they're going to end up going in in consortia, as they operate everywhere else in the world and to sort of, ... it sounds like 1927, this vision that there's this titanic struggle over the Iraqi oil among these countries. And by the way there's more oil that's going to come into the world in the next ten years, from Russia and the Caspian, than is going to come in from the Middle East.
CAROLINE LUCAS: But over the next 20 years, if you look at the amounts in Iraq, at the moment we're talking about 11 per cent, but there's evidence suggests there could be up to 25 or even 30 per cent from Iraq which would be unexploitable.
DAN YERGIN: In the past year we've added a 175 billion barrels of new oil reserves in the world. Fifty per cent greater than Iraq's oil reserves. Do you know where those reserves are? Canada.
DAVID FROST: What about the situation though that people say that one of the reasons - not, not grabbing the oil necessarily, but, but needing Iraqi oil to replace Saudi oil if the Saudi regime falls to the fundamentalists?
DAN YERGIN: Well that, in a way that kind of question is out there but the thing is that it's going to take ten years for Iraq to build up from being a second tier exporter to where it is, to being a much larger exporter. One of they myths here is that there's a switch that you turn and suddenly this flood of Iraqi oil.
CAROLINE LUCAS: ... should.
DAVID FROST: And what about, you've just recently been to Iraq, you mention regime change there, isn't it true that regime change is most of all really in the interests of the Iraqi people?
CAROLINE LUCAS: Absolutely. So let's give them the ability to be able to make their decisions and do that. They can't do it when they're being strangled by a sanctions regime. For us to go in there and get rid of one regime and impose another on them is absolutely the wrong way, it's going to be them who are going to suffer.
DAN YERGIN: Well first of all, an ... regime is going to be able to search like, I don't know if it's expected that Saddam is going to call free elections and allow a regime change, over the last 35 years there's been no indication of that -
CAROLINE LUCAS: Of course not - look at Milosevic. Milosevic went through the popular power. It was from people on the street who got rid of Milosevic. That's what we need ...
DAN YERGIN: It was - it was ... the incredible, ... military pressure there -
CAROLINE LUCAS: It was the people that made the difference and that's what you see in Iraq ...
DAN YERGIN: ... still be sitting there if there had not been the ... force.
DAVID FROST: Without wanting to necessarily praise Milosevic, he was, he was less of a dictator than Saddam. The people had more chance to demonstrate than they do in Iraq, as of today. Didn't they?
DAN YERGIN: Well yes, absolutely, I mean there's no, I mean you hear people having their tongues cut out in the last week and chained to posts in Iraq.
DAVID FROST: Well thank you both very much, and indeed you've, you've ventilated that very well, very forcefully, thank you very much indeed. Thank you Caroline and thank you Dan. Dan has in fact a new series going out on the digital channel, BBC4, at the moment, it's called Commanding Heights, the Battle for the World Economy. First instalment was last Thursday and it continues for the next month at 8.30 each and every Thursday evening.
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