Posted by balkanbalkan on April 1st, 2007
CommonDreams The wars in Iraq and Afghanistan have already cost the American people more than $500 billion, the deaths of 3200 U.S. troops, 25,000 others wounded, and countless Iraqi lives. The total price tag is projected to top $1.2 trillion.With the fourth anniversary of the U.S. invasion and occupation of Iraq upon us, the Bush administration asks Congress for $93 billion more for the war, over and above the fiscal year 2008 Pentagon request for $484 billion – an 11% increase over last year! The war machine eats well while starving our people of decent housing, quality health care, and education. The Gulf Coast remains a disaster.
Many of us felt shame in the opening days of the invasion as our soldiers were ordered to protect the Oil Ministry, oil fields, refineries, and distribution system while wholesale looting of Iraq’s antiquities unfolded. The message to the Iraqis was clear: “We’ve come for the oil.” There were no weapons of mass destruction. Hussein is gone yet we are still there. Rather than democracy, we brought massive destruction and civil war to Iraq.
Giving credence to Iraqis’ fears, a new Petroleum Law will be presented to the Iraqi Parliament that, if enacted, will put effective control of Iraq’s vast oil resources in the hands of foreign companies. Nationalized since 1975, Iraq’s oil was, before the years of sanctions and the invasion, the foundation for a relatively high standard of living, producing more PhD’s per capita than the U.S. and a health care system prized as the best in the region.
President Bush says the war is not about oil but his actions belie that claim. In the months before the March 2003 invasion, members of the U.S. State Department “Oil and Energy Working Group” met to plan how to open Iraq to international oil companies. As reported by investigative journalist Greg Palast, the oil law now proposed by the Iraqi Council of Ministers is a virtual photocopy of a plan first drafted by U.S. oil industry executives and consultants in Houston long before Iraq was “liberated.”
The proposed Petroleum Law creates a Federal Oil and Gas Council on which would sit representatives of Exxon- Mobil, Shell, BP, etc., whose tasks include approving their own contracts. Instead of Iraqi central government decision-making on oil, the proposal authorizes regional authorities to individually sign contracts with foreign companies, promoting contract bidding wars between regions that could lead to breaking Iraq into three states.
The practice in Iraq – as in other countries with giant reserves – has been that control of oil production rests with public sector oil companies. The role of foreign companies is limited to “service contracts.” A company is contracted to provide a stated service for a limited period – build a refinery, lay a pipeline, drill a field. Decisions on development, distribution, and flow of profits remain with the government. Kuwait, Saudi Arabia and Iran run their industries this way.
However, the proposed Petroleum Law provides for “production sharing agreements,” or long-term contracts whereby foreign companies control production, development and sale of the oil for up to 30 years, and reap as much as 70% of the profits. Given the severe weakness of Iraqi institutions, with the country devastated, under military occupation and mired in civil strife, Iraq is unlikely to receive a fair deal. With huge reserves and low production costs, foreign oil companies in Iraq stand to make enormous profits at the expense of the welfare of Iraq’s people and Iraqi sovereignty