It's Still About The Oil...

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It's still about oil in Iraq
A centerpiece of the Iraq Study Group's report is its advocacy for securing foreign companies' long-term access to Iraqi oil fields.
By Antonia Juhasz, ANTONIA JUHASZ is a visiting scholar at the Institute for Policy Studies and author of "The Bush Agenda: Invading the World, One Economy at a Time."
December 8, 2006
http://www.latimes.com/news/printedition/asection/la-oe-juhasz8dec08,1,3013881.story
WHILE THE Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.
Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq's importance to its region, the U.S. and the world with this reminder: "It has the world's second-largest known oil reserves." The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq's national oil industry will be commercialized and opened to foreign firms.

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.
Plans for this new law were first made public at a news conference in late 2004 in Washington. Flanked by State Department officials, Iraqi Finance Minister Adel Abdul Mahdi (who is now vice president) explained how this law would open Iraq's oil industry to private foreign investment. This, in turn, would be "very promising to the American investors and to American enterprise, certainly to oil companies." The law would implement production-sharing agreements.
Much to the deep frustration of the U.S. government and American oil companies, that law has still not been passed.
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.

Further, the Iraq Study Group would commit U.S. troops to Iraq for several more years to, among other duties, provide security for Iraq's oil infrastructure. Finally, the report unequivocally declares that the 79 total recommendations "are comprehensive and need to be implemented in a coordinated fashion. They should not be separated or carried out in isolation."
All told, the Iraq Study Group has simply made the case for extending the war until foreign oil companies — presumably American ones — have guaranteed legal access to all of Iraq's oil fields and until they are assured the best legal and financial terms possible.
We can thank the Iraq Study Group for making its case publicly. It is now our turn to decide if we wish to spill more blood for oil.

"Can't Stay the Course, Can't End the War, But We'll Call It 'Bipartisan'..."
By Phyllis Bennis and Erik Leaver *
Foreign Policy In Focus
December 7, 2006
http://www.fpif.org/fpiftxt/3767
Despite the breathless hype, the Baker-Hamilton Iraq Study Group (ISG) report did not include any dramatic new ideas for ending the war in Iraq. In fact, it did not include a call to end the war at all. Rather, the report's recommendations focus on transforming the U.S. occupation of Iraq into a long-term, sustainable, off-the-front-page occupation with a lower rate of U.S. casualties. Despite its title, it does not provide "A New Approach: A Way Forward."

While the ISG is eager to have Iraqis take up security issues by themselves, they are not so quick to have Iraqis take charge of their economy or more importantly, the development of their massive oil reserves. The ISG team advocates for the sharing of oil revenues throughout the country, a departure from the current Iraqi constitution that states revenue from new oil fields goes to local provinces. If carried out, this reform would help lessen the pressure for division within the country.

Following this sensible proposal is one much more radical--complete privatization of the oil industry, combined with foreign investment, and technical assistance by the U.S. government. This directly contradicts the ISG's earlier recommendation that, "The President should restate that the U.S. does not seek to control Iraq's oil" and guarantees that the U.S. and multinational corporations will be vying for control and power in Iraq for decades. Clearly this section of the report was heavily influenced by commission members James A. Baker III and Lawrence Eagleburger, whom have sought access to Iraqi's oil for most of their political careers, as well as by the longstanding consensus of U.S. corporate and government opinion about the importance and claimed legitimacy of maintaining U.S. control of Iraqi oil.

http://www.globalpolicy.org/security/issues/iraq/withdraw/2006/1207bipartisan.htm

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