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Bush cites oil as reason to stay in Iraq

John Dimsdale Nov 6, 2006

KAI RYSSDAL: As you’ve probably heard President Bush has been out on the campaign trail. He’s been giving his standard stump speech. But over the weekend in Colorado the president said something a little unusual. He was talking about why U.S. troops are still in Iraq. What the terrorists might do if the Americans pulled out.

PRESIDENT BUSH: You can imagine a world in which these extremists and radicals got control of energy resources. And then you can imagine them saying, “We’re gonna pull a bunch of oil off the market to run your price of oil up, unless you do the following.”

Blackmail and worse were the scenarios that followed. But the link he made was pretty clear. If we leave Iraq, the terrorists get the oil. That’s a pretty big change for a White House that has meticulously avoided any link between oil and the war. Our Washington bureau chief John Dimsdale reports the presidential comments are getting some attention.

JOHN DIMSDALE: Phillip Verleger is a studious observer of global oil markets for the Institute for International Economics. He’s not prone to hyperbole. But he says he was stunned when he heard the President talk about a U.S. role in protecting Iraq’s oil reserves from terrorists.

PHILLIP VERLEGER: Essentially, by making that statement he has stated that his energy policy is totally bankrupt.

Ever since 9/11, Verleger says the Bush White House has refused to acknowledge any link between oil and the U.S. mission in Iraq.

VERLEGER: The reason they have studiously avoided it is it provides a huge incentive for taking big steps now to reduce U.S. oil imports. The only way you can do that is through conservation measures .. such as imposing an oil import fee or raising the gasoline tax.

Other oil experts question whether anyone ruling Iraq could afford to withdraw 11 percent of the world’s known reserves from the international market. But oil analyst John Kingston, with Platts, says the President’s scenario is not that far-fetched.

JOHN KINGSTON: I know the sentiment always tends to be they have to produce, they have nothing else. But when the Ayatollah Khomeini took over Iran, Iranian production plunged and, quite frankly, the Ayatollah did not really seem to care. He had other agendas. It’s not impossible to imagine that somebody taking over Iraq might feel the same way.

On another stump speech in Florida today, the President repeated the threat of oil blackmail in Iraq, and said that’s why the U.S. will stay.

In Washington, I’m John Dimsdale for Marketplace.

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