American With Ties to Bush Administration Helped Write Iraq's New Hydrocarbon Law That Gives Victor's Term to US Big Oil Companies

... the U.S. occupation of Iraq seems to be about to grab its oil prize by establishing a new sharing arrangement between a major national producer and the multi-national giants...This prize has been the dream of successive U.S. administrations: on January 18th, they came one step closer to reality when Iraq’s Oil Committee approved the new draft hydrocarbon law, sent it to the cabinet within a week and, when approved, will go to the parliament immediately thereafter.

The early draft of the law was prepared by BearingPoint American consultants, hired by the Bush administration, and sent to the White House and major Western petroleum corporations in July, and then to the International Monetary Fund two months later, while most Iraqi legislators and the public remained in the dark.

The approved production-sharing agreements (PSAs) favor investing foreign oil companies with 70 percent of oil revenue to recoup their initial outlay, then companies can reap 20 percent of the profit without any tax or other restrictions on their transfers abroad.

George W. Bush in his “New Strategy” speech on January 10th... announced that “Iraq will pass legislation to share oil revenues among all Iraqis,” without even a hint to any U.S. interest, because he was very well aware of the hornet nest he would unleash had he prematurely even hinted at his oil prize.

A former U.S. official close to Iraq oil law negotiations told UPI on condition of anonymity "there's a lawyer there that works as part of our (U.S.) efforts ... he's an oil lawyer," adding "does that mean we're going to write that agreement? No."

U.S. eyes have been on Iraq's oil since before the war.

Documents obtained in a 2002 Freedom of Information Act lawsuit by the conservative legal group Judicial Watch found Vice President Dick Cheney's secret Energy Task Force included maps and charts of Iraq's oil infrastructure and projects as well as a list of "Foreign Suitors for Iraqi Oilfield Contracts."

A pre-war oil and energy working group of the U.S. State Department's Future of Iraq project also focused on Iraq's oil sector.

The U.S. Agency for International Development in 2004 announced an Iraq contract with McLean, Va.-based consultant BearingPoint for "broad economic reform," BearingPoint spokesman Steve Lunceford told UPI Oct. 18.

He said it included "privatization of the oil industry."

In a follow up e-mail directing further questions to USAID, he wrote "we are assisting the Iraqi government in review of many economic policy efforts, including reinvigorating its oil industry."

In April 2005, Ahmed Chalabi, the U.S. government's main source for reasons to go to war, who told the Washington Post in 2002 "American companies will have a big shot at Iraqi oil," was made Iraq's oil minister.

Current Oil Minister Hussein al-Shahristani met with international oil company officials last July at the U.S. Energy Department to talk about Iraq's oil sector.

And this month, despite federal oil law negotiations still ongoing, Bush commented numerous times on what should be done with the oil revenue; White House spokesman Tony Snow said Iraq's oil won't be nationalized and U.S. companies will have investment "opportunity"; and Secretary of State Condoleezza Rice told a Senate committee what the Kurds won't get from the hydrocarbon law.

"The Bush administration has consistently placed enormous pressure on the al-Maliki government to pass an oil law that would open Iraq from a nationalized oil system to one that would transform to allow private foreign investment and the only thing being debated at this point is the extent private companies would have access to the Iraqi oil market," said Antonia Juhasz, visiting scholar at the Institute for Policy Studies in Washington and author of "The Bush Agenda."

"One could argue if the war was [not] waged for that purpose. It certainly seems clear that it's being maintained for that purpose."

You may ask if money is so important, but it's not just money, my friend, it's power.*

Read excerpt of  Truthout analysis "New Oil Law Means Victory in Iraq for Bush"

 So Bush will surge with Maliki and his ethnic cleansing for now. If the effort flames out in a disastrous crash that makes the situation worse - as it almost certainly will - Bush will simply back another horse. What he seeks in Iraq is not freedom or democracy but "stability" - a government of any shape or form that will deliver the goods. As the Independent wryly noted in its Sunday story, Dick Cheney himself revealed the true goal of the war back in 1999, in a speech he gave when he was still CEO of Halliburton. "Where is the oil going to come from" to slake the world's ever-growing thirst, asked Cheney, who then answered his own question: "The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

    And therein lies another hidden layer of the war. For Iraq not only has the world's second largest oil reserves; it also has the world's most easily retrievable oil. As the Independent succinctly notes: "The cost-per-barrel of extracting oil in Iraq is among the lowest in the world because the reserves are relatively close to the surface. This contrasts starkly with the expensive and risky lengths to which the oil industry must go to find new reserves elsewhere - witness the super-deep offshore drilling and cost-intensive techniques needed to extract oil form Canada's tar sands."

    This is precisely what Cheney was getting at in his 1999 talk to the Institute of Petroleum. In a world of dwindling petroleum resources, those who control large reserves of cheaply-produced oil will reap unimaginable profits - and command the heights of the global economy. It's not just about profit, of course; control of such resources would offer tremendous strategic advantages to anyone who was interested in "full spectrum domination" of world affairs, which the Bush-Cheney faction and their outriders among the neo-cons and the "national greatness" fanatics have openly sought for years. With its twin engines of corporate greed and military empire, the war in Iraq is a marriage made in Valhalla.

    II. The Win-Win Scenario

    And this unholy union is what Bush is really talking about when he talks about "victory." This is the reason for so much of the drift and dithering and chaos and incompetence of the occupation: Bush and his cohorts don't really care what happens on the ground in Iraq - they care about what comes out of the ground. The end - profit and dominion - justifies any means. What happens to the human beings caught up in the war is of no ultimate importance; the game is worth any number of broken candles.

    And in plain point of fact, the Bush-Cheney faction - and the elite interests they represent - has already won the war in Iraq. I've touched on this theme before elsewhere, but it is a reality of the war that is very often overlooked, and is worth examining again. This ultimate victory was clear as long ago as June 2004, when I first set down the original version of some of the updated observations below.

Put simply, the Bush Family and their allies and cronies represent the confluence of three long-established power factions in the American elite: oil, arms and investments. These groups equate their own interests, their own wealth and privilege, with the interests of the nation - indeed, the world - as a whole. And they pursue these interests with every weapon at their command, including war, torture, deceit and corruption. Democracy means nothing to them - not even in their own country, as we saw in the 2000 election. Laws are just whips to keep the common herd in line; they don't apply to the elite, as Bush's own lawyers and minions have openly asserted in the memos, signing statements, court cases and presidential decrees asserting the "inherent power" of the "unitary executive" to override any law he pleases.

    The Iraq war has been immensely profitable for these Bush-linked power factions (and their tributary industries, such as construction); billions of dollars in public money have already poured into their coffers. Halliburton has been catapulted from the edge of bankruptcy to the heights of no-bid, open-ended, guaranteed profit. The Carlyle Group is gorging on war contracts. Individual Bush family members are making out like bandits from war-related investments, while dozens of Bush minions - like Richard Perle, James Woolsey, and Joe Allbaugh - have cashed in their insider chips for blood money.

    The aftermath of the war promises equal if not greater riches. Even if the new Iraqi government maintains nominal state control of its oil industry, there are still untold billions to be made in PSAs for drilling, refining, distributing, servicing and securing oilfields and pipelines. Likewise, the new Iraqi military and police forces will require billions more in weapons, equipment and training, bought from the US arms industry - and from the fast-expanding "private security" industry, the politically hard-wired mercenary forces that are the power elite's latest lucrative spin-off. And as with Saudi Arabia, oil money from the new Iraq will pump untold billions into American banks and investment houses.

Read rest at source.

The Independent, a British newspaper, obtained a leaked copy of the draft law and reported that its provisions would lock Iraqi oil into 30-year Production Sharing Agreements with private oil corporations on what are absolute beggar's terms.

The PSAs would divert up to 70 percent of the oil profits to private companies while they are developing new oil fields, and 20 percent of the profits thereafter. PSAs are not a common arrangement -- most of the world's oil is owned and controlled by state-run oil companies, as was Iraq's when its oil was nationalized in 1972.

But even where PSAs are in place, a fair profit-sharing arrangement is considered to be on the order of 10 percent, not 20 percent. Similarly, the exorbitant 70 percent of profits to pay for oil-field development is way out of line with the physics of oil production in Iraq. Lying just beneath the sand, Iraq's oil today is some of the easiest in the world to produce.

Most Iraqis have no idea of the content of the new hydrocarbon law. What will happen when they find out? The Independent quotes a statement from a recent meeting of Iraqi trade union leaders:

"The Iraqi people refuse to allow the future of their oil to be decided behind closed doors. The occupier seeks and wishes to secure ... energy resources at a time when the Iraqi people are seeking to determine their own future, while still under conditions of occupation."

The Bush administration hopes to dampen this kind of reaction by promising each individual Iraqi a share of the oil profits. Tony Snow compared the hydrocarbon law to Alaska's Permanent Fund that distributes a share of oil revenues drawn from state land to every Alaska resident. But will Iraqis trust a promise like that?

The Independent's take is that the "perception that Iraq's wealth is being carved up among foreigners can only add further fuel to the flames of the insurgency, defeating the purpose of sending more American troops to a country already described in a U.S. intelligence report as a cause celebre for terrorism."

But Bush and his allies among the U.S. elites will never give up on Iraq's great oil prize. As Chris Floyd said about the likely failure of the troop surge and the hydrocarbon law: "If the effort flames out in a disastrous crash that makes the situation worse as it almost certainly will Bush will simply back another horse."

Meanwhile, on the home front, Global Public Media reported last week on a Senate Energy Committee hearing on "The Geopolitics of Oil." Senators heard from experts that a new "Axis of Oil" has emerged, with Russia and China playing lead roles in a game of "keep away" -- blocking the U.S. from its traditional lion's share of world oil supplies.

The reporter said the atmosphere in the hearing room had "an almost palpable sense of graveness and alarm" as senators heard the panel of experts recommend the establishment of a Pentagon-level energy security director and a massive nuclear-power buildup to replace gasoline by providing electricity for a new fleet of electric cars.

These are the first steps in what security studies expert Michael Klare calls an emerging "energo-fascism." In a recent article, Klare describes three indicators of energo-fascism that I summarize as: 1. the transformation of the U.S. military into a global oil protection service; 2. the emerging Axis of Oil and the power struggles of governments in relation to it, and 3. the greater reliance on nuclear power and the increase in security apparatus that it entails.

Iraqis may revolt when they hear how the hydrocarbon law infringes on their freedom and self-determination, but what about us?

tags: iraq  oil  hydrocarbon bill  oil fields  majnoon  

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