An Irresponsible Plan

The Congresscritters are finally beginning to notice the hoi polloi who sent/are sending/will continue to send them to Washington, and several good people have come up with A Very Serious Plan [PDF] to end the war in Iraq.

It looks like a good one: humanitarian and economic help for Iraq [and lots of it], no permanent bases there, promote peace and unity amongst the warring factions, restore a bunch of our Constitutional rights here at home, health care for veterans, fix the GI bill, go after the war profiteers, and break up the media conglomerates while we're at it.

Then I read this: Iraq Study Group Recommendation 23:

The President should restate that the United States does not seek to control Iraq’s oil.

Uh oh. Why do we need to reassure everyone on this point? Because we're leaving in this little bit:

Assist the Iraqi government in achieving certain security, political, and economic milestones, including better performance on issues such as national reconciliation, equitable distribution of oil revenues, and the dismantling of militias.

"Equitable distribution of oil revenues" is code for "Y'all decide among yourselves how you're going to split up what little oil revenue you'll have left after we take the bulk of it."

The US wrote a new Constitution for Iraq and an Oil Law too, both of which go into great detail on how Iraq is supposed to handle our their oil riches. Of course, we rigged it so that the four biggest oil companies in the world, two of them American, the other two of them British, would likely get the bulk of the contracts for extracting that oil and the bulk of the revenues from selling that oil. The remaining revenues are to be split equitably based on the population distribution in the country instead of where the oil fields are, because a large expanse, controlled primarily by the Sunnis, has no oil to speak of.

Also, in that same section of The Plan [page 13] are Support the unity and territorial integrity of Iraq and Help Iraq reach a mutually acceptable agreement on Kirkuk because the Kurds in the North want to go off and contract their oil drilling to some companies that aren't among The Approved Big Four Anglo-Americans, and the Shiites in the West will probably want to team up with Iran to sell their oil to China. Lord knows we can't have that.

via

Production sharing agreemnets

PSAs good
PSAs bad

Why the surge is working. Or not.

Iraq's cabinet has approved changes to a draft oil law and sent it to parliament in a step seen as vital to curbing sectarian violence.

Nuri al-Maliki, Iraq's prime minister, said it was the "most important" law in the country.

"The law was approved unanimously ... it was referred to the parliament which will discuss it tomorrow," he said.

"I call on all our partners in the political process and in this national unity government to respect this deal."

A couple of years ago, I wasn't entirely convinced that our invasion of Iraq was entirely about OIL. These days I'm not so sure of that.

They've toned down the language a bit, made some concessions on some percentages, and shortened some timeframes for leases, but the Iraq Oil Law is still all about production sharing agreements, and a few troublesome folks aren't buying off on it.

Followers of Shiite cleric Moqtada al-Sadr on Thursday joined a growing chorus of Sunni, Kurdish and Shiite opposition to a draft oil law approved by Iraq's cabinet and backed by the US government.

Sadr's supporters said they would not support any law that would allow firms 'whose governments are occupying Iraq' -- a reference to the US, Britain and their coalition allies -- to sign Iraqi oil deals.

My guess is that the surge was all about stabilizing just enough of Baghdad and buying just enough time to get the infamous oil law signed, and not about anything else.

Presentation of the draft to parliament after the cabinet approved it on Tuesday was a big step towards meeting a key political target set by the US.

Please prove me wrong.

Whose oil is it, anyway?

Antonia Juhasz has written a New York Times Op/Ed piece, Whose Oil Is It, Anyway?, explaining the Iraq oil situation much better than I could. Normally I wouldn't c&p an entire article, but the NYT has an annoying habit of putting important stuff behind subscription firewalls and everybody should read this one.

TODAY more than three-quarters of the world’s oil is owned and controlled by governments. It wasn’t always this way.

Until about 35 years ago, the world’s oil was largely in the hands of seven corporations based in the United States and Europe. Those seven have since merged into four: ExxonMobil, Chevron, Shell and BP. They are among the world’s largest and most powerful financial empires. But ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back.

Iraq’s oil reserves — thought to be the second largest in the world — have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, “Iraq possesses huge reserves of oil and gas — reserves I’d love Chevron to have access to.”

A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more.

In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries “to open up areas of their energy sectors to foreign investment.” One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq’s economy, democracy and sovereignty.

Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president’s benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency.

The administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies.

The law would transform Iraq’s oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies.

The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control.

The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq’s current “instability” by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq’s oil would then be left underground for at least two years rather than being used for the country’s economic development.

The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil.

Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced.

Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military.

Iraq’s five trade union federations, representing hundreds of thousands of workers, released a statement opposing the law and rejecting “the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.” They ask for more time, less pressure and a chance at the democracy they have been promised.


Antonia Juhasz, an analyst with Oil Change International, a watchdog group, is the author of “The Bush Agenda: Invading the World, One Economy at a Time.”

PSA: The Surge is working!

Hooray!
[peace is at hand]

Mission Accomplished!
[halliburton has been catapulted from the edge of bankruptcy...]

The NY Times won't tell it like it is, but Asia Times does.

It's the oil law, stupid.

Iraq Oil Law

found it at Discourse.net

It's the Kool-Aid, Stupid.

I haven't kept up my planned pace on my letter-writing campaign. I keep taking time out to look at some of the websites of some of the Senators.

Today I found this:

“The Iraqis must pass an oil law and take other steps critical to achieving a political solution for the disputes between the Shiites, Sunnis, and Kurds." [emphasis mine]

at Maria Cantwell's site.

I'll admit that when I first started reading about the Iraq oil production-sharing agreement issue, I was skeptical. Sounded like conspiracy theory material to me. Even when I first posted about PSAs recently, I wondered if I wasn't sipping on some Kool-Aid that I should be avoiding.

To be fair to Senator Cantwell, she's not the only politico I've seen quoted as saying approximately the same thing. I dunno. I think maybe the translation of that statement is:

All your oil are belong to US. We'll pull our occupation forces out of your country after you pass a law making it so.

I'm going to go drink some lavender chamomile tea now, and resume e-mailing.

PSA: It's the oil, stupid.

Prostate-specific antigen. Public service announcement. Production-sharing agreement.

Did I call it?

Yes.
I did.

I think it's possible that Bush Jr really does see himself in the mold of Churchill, or Truman, or some other savior, and if he does, then he was cleverly manipulated, because I'm sure that CheneyCo are in it for the oil.


thanks be to DragonTat2 and Titan_Arum for the tip

Benchmark: December

Forget finishing the war for Poppy. Forget showing up Poppy: this is how you fight a war, Clueless Dad! Forget bringing democracy to the Middle East. Forget saving a helpless country -- hell, an entire benighted region -- from a brutal, Hitlerian dictator.

It's the OIL, stupid.

I've cherry-picked some excerpts for your reading pleasure.
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Iraq is sitting on a mother lode of some of the lightest, sweetest, most profitable crude oil on earth, and the rules that will determine who will control it and on what terms are about to be set.

The Iraqi government faces a December deadline, imposed by the world's wealthiest countries, to complete its final oil law. Industry analysts expect that the result will be a radical departure from the laws governing the country's oil-rich neighbors, giving foreign multinationals a much higher rate of return than with other major oil producers and locking in their control over what George Bush called Iraq's "patrimony" for decades, regardless of what kind of policies future elected governments might want to pursue.

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Chafing at the idea that the Chinese and Russians might end up with what is arguably the world's greatest energy prize, [oil] industry leaders lobbied hard for regime change throughout the 1990s. With the election of George W. Bush and Dick Cheney in 2000 -- the first time in U.S. history that two veterans of the oil industry had ever occupied the nation's top two jobs -- they would finally get the "greater access" to the region's oil wealth, which they had long lusted after.

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But the execs from Big Oil didn't just want access to Iraq's oil; they wanted access on terms that would be inconceivable unless negotiated at the barrel of a gun. Specifically, they wanted an Iraqi government that would enter into production service agreements (PSAs) for the extraction of Iraq's oil.

PSAs, developed in the 1960s, are a tool of today's kinder, gentler neocolonialism; they allow countries to retain technical ownership over energy reserves but, in actuality, lock in multinationals' control and extremely high profit margins -- up to 13 times oil companies' minimum target, according to an analysis by the British-based oil watchdog Platform (PDF)

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PSAs often have long terms -- up to 40 years -- and contain "stabilization clauses" that protect them from future legislative changes. As Muttit points out, future governments "could be constrained in their ability to pass new laws or policies." That means, for example, that if a future elected Iraqi government "wanted to pass a human rights law, or wanted to introduce a minimum wage [and it] affected the company's profits, either the law would not apply to the company's operations or the government would have to compensate the company for any reduction in profits." It's Sovereignty Lite [emphasis mine].

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And those are just from part one of Joshua Holland's two-part series Bush's Petro-Cartel Almost Has Iraq's Oil over at AlterNet.
[read part two here]