Iraq War Is All About Controlling The Oil

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The Providence Journal

Iraq War Is All About Controlling The Oil

by
Jerry Landay

AFTER WORLD WAR II, the president's national security council propounded a policy that would shape the world's geopolitical future: "Oil operations are, for all practical purposes, instruments of our foreign policy." More than a half-century later, that policy has not changed. With the invasion of Iraq already secretly being planned, freshly selected President George W. Bush listed "energy security" as his first action priority. Energy security is the invisible elephant in Washington, guiding Bush policy on Iraq, the Middle East, Latin America, and Africa. It explains the "surge," the absence of an exit strategy from Iraq, the stubborn resistance of the Bush-Cheney team to efforts by the Congressional Democrats to impose a withdrawal deadline for 170,000 American soldiers, as well as the ongoing construction of permanent military bases in Iraq, and the costly stationing of thousands of American troops on foreign soil from Kuwait to Djibouti. Energy security is the invisible presence shaping what the 2008 presidential candidates say or don't say about oil and energy. Energy security is the reason Hillary Clinton refuses to embrace a withdrawal deadline and why Republican presidential hopeful John McCain declares that there is "no alternative Plan B" to the ongoing build-up of American forces. In short, the American occupation and the maintenance of a shaky Iraqi government are the insurance policy for American control and access to the second largest untapped reserve of petroleum in the world. The politicians don't say much about an energy-security policy based on foreign oil. The news media don't report very much on it. The Big Five oil companies don't proclaim it in their self-promoting institutional advertising campaigns.Yet the so-called "Majors" — U.S.-based Exxon-Mobil, Chevron, and ConocoPhillips; the Dutch Shell Oil; and the British-owned British Petroleum — would be the principal beneficiaries of a new hydrocarbon law before the Iraqi Parliament that the press rarely mentions. The initial draft, shaped by American contractors to the Iraqi government, has been amended by the U.S. Embassy in Iraq, and approved by the Iraqi Cabinet. The draft now awaits final approval by the Iraqi Parliament, but there is much reported Iraqi resistance to it, with good reason. Oil Change International (http://priceofoil.org), an energy watchdog group, has devotedly tracked the proposed law. The law would reverse a trend in which most major petro-nations have largely nationalized their oil fields and reserves. Under the proposed Iraqi law, concessions involving 63 Iraqi oilfields, both developed and undeveloped, would go to major foreign-oil companies, assuring them of dominance over Iraqi oil for a generation or more. Only 17 already developed fields would be directly controlled by a proposed Iraqi National Oil Company (INOC). One of the key provisions of the draft law states that "the overall allocation of exploration and production rights . . . shall aim at achieving variety among oil companies and operators . . . so as to enhance efficiency through positive competition." The draft law grants assurance of "reasonable incentives" to foreign investors — the provision that kicks the door open to foreign developers. Development licenses are to be granted "on a competitive basis," a nod to outside companies with sufficient development capital. Oil Change International states: "The law is a dramatic break from the past. Foreign oil companies will have a stake in Iraq's vast oil wealth for the first time since 1972, when Iraq nationalized the oil industry. This law would essentially open two-thirds of known — and all of [Iraq's] as yet undiscovered — reserves open to foreign control." According to Oil Change International, this amounts to 115 billion barrels of known oil reserves — 10 percent of the world total. The language of Article 11 of the draft law pays vague lip service to the principle of equal revenue sharing from petroleum and natural gas proceeds among Shi'as, Sunnis, and Kurds — supporting "distribution of .  . . revenues, and the monitoring of federal revenue allocation." But ConocoPhillips and Shell are already negotiating separate concessions with Kurdistan alone, and others reportedly will follow suit. Oil Change International reports that foreign oil 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 setting foot in the country." Washington politicians understandably want to hedge the nation against the devastating impact on American life and the economy of a severe interruption of overseas oil supplies. But waging costly resource wars or granting discriminatory privileges to private interests that harm host oil states in an age of terrorism only makes permanent the threat to American "energy security." Only "soft power" — peacemaking, smart diplomacy, constructive nation-building, generous sharing formulas, vigorous energy conservation and research policies at home — can assure long-term security for American interests without creating grievous new problems. It's time for leadership from politicians to acknowledge the existence of the elephant in the room and do something creative about it. Jerry M. Landay, a retired CBS News correspondent living in Bristol, writes on current issues.

© 2007 The Providence Journal

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