December 11, 2006

It's (Still) The Oil, Stupid

As the Los Angeles Times says:
THE Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil...
The LA Times points out that the ISG recommendations are totally consistent with previous Bush administration policy on Iraq's oil:
The report makes visible to everyone the elephant in the room: that we are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met...

For any degree of oil privatization to take place, and for it to apply to all the country's oil fields, Iraq has to amend its constitution and pass a new national oil law. The constitution is ambiguous as to whether control over future revenues from as-yet-undeveloped oil fields should be shared among its provinces or held and distributed by the central government.

This is a crucial issue, with trillions of dollars at stake, because only 17 of Iraq's 80 known oil fields have been developed. Recommendation No. 26 of the Iraq Study Group calls for a review of the constitution to be "pursued on an urgent basis." Recommendation No. 28 calls for putting control of Iraq's oil revenues in the hands of the central government. Recommendation No. 63 also calls on the U.S. government to "provide technical assistance to the Iraqi government to prepare a draft oil law."

This last step is already underway. The Bush administration hired the consultancy firm BearingPoint more than a year ago to advise the Iraqi Oil Ministry on drafting and passing a new national oil law.
Although the media is totally ignoring it, even in the wake of the ISG report, this new Iraqi oil law is critically important to any new developments in Iraq:
In July, U.S. Energy Secretary Samuel Bodman announced in Baghdad that oil executives told him that their companies would not enter Iraq without passage of the new oil law. Petroleum Economist magazine later reported that U.S. oil companies considered passage of the new oil law more important than increased security when deciding whether to go into business in Iraq.
The LA Times concludes that the ISG report has made the oil issue starkly clear, so now the people of the USA just have to decide "if we wish to spill more blood for oil". But it's not that simple, because the people of the USA are not being given that choice. They are not even being presented with the real news about Iraq's oil.

As usual, the blogs are the one's at the forefont of the information delivery system. Here's Juan Cole today:
The Iraqi government is putting the final touches on petroleum legislation, which will allow contracts to be signed by the oil majors. Up until now, legal uncertainties kept them away. My guess is that James Baker crafted the Iraq Study Group report so as to have the least possible negative impact on such petroleum negotiations.
Given that several members of the ISG, including Baker himself, are closely allied to Big Oil, that conclusion shouldn't be such a big call (but it is). A cynic (like me) might even wonder if Bush's BearingPoint man did not recommend the formation of Baker's ISG as a way to swing public opinion behind the required changes.

The Iraqi politicians involved in the new oil law negotiations are making sweet noises about how everybody in Iraq is going to just love their final draft, including separatist Kurds, disenfranchized Sunnis and greedy Shiites (who want total control of Iraq's oil-rich southern fields). But it's hard to see how they pull off such a feat of national unity in the current chaos. PM al-Maliki has already slammed the ISG report as “an insult to the people of Iraq.” Maybe he is just giving his friend Bush some room to move? OR maybe this explains why he is on his way out the door?

The latest talk is of dividing oil revenues on population basis among Shias, Sunnis and Kurds. I'll let the Neocon Propaganda Catapulters at ITM demonstrate how this might be presented to the Iraqi people (surprise, surprise, they just love the idea):
Another announcement followed soon, yesterday al-Sabah brought the news [in Arabic] that the parliament is discussing a suggestion to set aside 30% of oil sales income to distribute among the citizens of Iraq. The draft law sets 3 classes of payments according to age and subsequent needs and responsibilities; from one month to 6 years, from 6 to 18 years and the third one 19 years and older.

People who migrated from Iraq, those with salaries higher that 1 million dinars/month and convicted criminals will be excluded from the payment program, the report added.
It sounds like a typical Western election campaign plan, doesn't it? Threaten people with insecurity on the one hand, bribe them with money on the other. Just sign the oil law, folks, and nobody will get hurt. You will learn to love your Big Brother, just as Big Brother loves you. Now go fill up your SUVs.

If this new oil law does get signed, it will be interesting to see whether Iraq's government decides that the people need to approve the changes in a referendum (and if so, how that will be accomplished). If not, it will surely be illegal (although you could argue that the existing Iraqi constitution is itself illegal).

Elsewhere, Antonia Juhasz has some historical perspective on US trade with Iraq, including Baker and Kissinger dealings with Saddam Hussein.

UPDATE: Much more here: PSA are on the table!

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