September 18, 2014 | Newsmax

ISIS Is Already An Oil-Rich State, Former Cheney Adviser Says

As Western nations are now poised to take action against ISIS, the Islamic terrorists are already “closer to being an actual state than any American should be comfortable with,” John Hannah, the onetime national security adviser to former Vice President Dick Cheney, told Newsmax.

At this time, he estimated, populations under ISIS’s domination “span an area of up to 35,000 square miles, the approximate size of Jordan.”

Hannah, who worked for Cheney and for the U.S. State Department under Presidents Bill Clinton and George W. Bush, also warned that with ISIS now controlling most of the oil fields in Eastern Syria and at least five smaller fields in Iraq, there is a potential for worldwide economic problems on the horizon.

“If the danger ISIS represents were to persist and to grow, the long-term consequences for Iraqi production and the world economy could become more serious and pose a threat to the world economy,” he told us.

Hannah, now a senior fellow at the Foundation for Defense of Democracies, also serves as an adviser to the Washington-based Securing America's Future Energy (SAFE), an organization committed to enhancing U.S. economic and national security through reduced dependence on oil.

Regarding ISIS as an actual state—or “caliphate,” as its leaders have proclaimed its occupied lands, Hannah noted that since the fall of Mosul earlier this year, “ISIS has taken control of several more towns and villages on the edges of Iraq's Kurdish region, even threatening Erbil itself, the Kurdish capital. Hundreds of thousands have been forced to flee their homes, burdening the Kurdish government with a massive refugee crisis at the same time it is waging a war for its survival.

“And while the world's attention has been focused on ISIS's activities in Iraq, it has also continued to make significant gains in Syria, demonstrating an impressive ability to coordinate military offensives on multiple fronts simultaneously.

“From Aleppo in northwest Syria through the ISIS heartland in Raqqa, to Hasaka and Deir el-Zour on the Iraqi border, ISIS forces have been on the march, securing land, taking over regime military bases and arms depots, and seizing critical infrastructure and economic assets.”

Overall, Hannah estimates, ISIS’s “lines of action now extend from western Syria to eastern Iraq, some 700 miles. Its forces have the upper hand in up to a third of Syrian and Iraqi territory, with populations under its domination spanning an area of up to 35,000 square miles, the approximate size of Jordan.”

Along with controlling millions and holding a monopoly of arms in major towns and cities in Iraq and Syria, the ISIS state is handling governance in the turf it controls.

Citing the example of ISIS's nominal capital, the Syrian city of Raqqa, Hannah noted that “[O]ver 500,000 people are ruled there by ISIS. It delivers electricity, water and other essential services. It administers a system of sharia courts, public security and criminal justice. It runs schools, hospitals and a public welfare system.

“While in many of the areas it has conquered. ISIS has chosen to rule through cooperative authorities already in place, it no doubt intends over time to impose the Raqqa model of governance more broadly.”

The critical importance of the state/caliphate to the terrorists’ momentum cannot be under-estimated, he warned. Since the caliphate was formally declared, Hannah told us, “more than 6,000 fresh recruits from around the world reportedly flocked to its ranks in July alone, ready to wage jihad.”

Their ranks, of course, include the masked British executioner the world knows as “Jihad John,” who has so far beheaded two Americans and a British citizen.

As for endangering the world’s energy supply and economy, Hannah is convinced this is not immediate because the Iraqi oil fields ISIS now controls represent a tiny fraction of Iraq's overall production. The giant fields deep in the south that account for the overwhelming majority of Iraq's exports, as well as the substantial fields in Kurdistan, have not been seriously threatened.

But, he quickly added, this may not be the case if ISIS continues on the march.

“As a result of recent fighting,” Hannah told us, “several major oil companies drilling in Kurdistan — including Total, Chevron, and Exxon — temporarily withdrew staff, which could have seriously impacted production had the U.S. not intervened at the last minute to stop the ISIS advance.

“Some smaller companies conducting activities closer to the combat zones announced they were actually suspending operations and cutting production.

“More broadly, according to the International Energy Agency, in order to meet growing global demand, the world needs Iraqi production to rise rapidly, from 3.3 million barrels per day today to 6 million barrels per day in 2020, and to 8 million barrels per day by 2035.

“Reaching those targets and keeping global oil markets balanced will require hundreds of billions of dollars of investment and foreign assistance,” he said. “That clearly will be impossible if Iraq remains in a constant state of violence, instability, and on the tipping point of being a failed nation.”