Game over for US attempts to control Iraq's oil -- 4,000 dead GI's for nothing

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Remember -- the purpose of the war in Iraq was to gain control of
Iraq's oil. In spite of trying with all our might, we are losing
control of the oil.

This article is somewhat complicated, thus, I am concerned that our
rightwing friends may not understand it.

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Is It Game Over for U.S. Control of Iraqi Oil?
By Jack Miles, Tomdispatch.com
Posted on October 25, 2007, Printed on October 25, 2007
http://www.alternet.org/story/66076/
The oil game in Iraq may be almost up. On September 29th, like a
landlord serving notice, the government of Iraq announced that the
next annual renewal of the United Nations Security Council mandate for
a multinational force in Iraq -- the only legal basis for a
continuation of the American occupation -- will be the last. That was,
it seems, the first shoe to fall. The second may be an announcement
terminating the little-noticed, but crucial companion Security Council
mandate governing the disposition of Iraq's oil revenues.

By December 31, 2008, according to Foreign Minister Hoshyar Zebari,
the government of Iraq intends to have replaced the existing mandate
for a multinational security force with a conventional bilateral
security agreement with the United States, an agreement of the sort
that Washington has with Kuwait, Saudi Arabia, and several other
countries in the Middle East. The Security Council has always paired
the annual renewal of its mandate for the multinational force with the
renewal of a second mandate for the management of Iraqi oil revenues.
This happens through the "Development Fund for Iraq," a kind of escrow
account set up by the occupying powers after the overthrow of the
Saddam Hussein regime and recognized in 2003 by U.N. Security Council
Resolution 1483. The oil game will be up if and when Iraq announces
that this mandate, too, will be terminated at a date certain in favor
of resource-development agreements that -- like the envisioned
security agreement -- match those of other states in the region.

The game will be up because, as Antonia Juhasz pointed out last March
in a New York Times op-ed, "Whose Oil Is It, Anyway?":


"Iraq's neighbors Iran, Kuwait and Saudi Arabia.... 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."

By contrast, the oil legislation now pending in the Iraqi parliament
awards foreign oil companies coveted, long-term, 20-35 year contracts
of just the sort that neighboring oil-producers have rejected for
decades. It also places the Iraqi oil industry under the control of an
appointed body that would include representatives of international oil
companies as full voting members.

The news that the duly elected government of Iraq is exercising its
limited sovereignty to set a date for termination of the American
occupation radically undercuts all discussion in Congress or by
American presidential candidates of how soon the U.S. occupation of
Iraq may "safely" end. Yet if, by the same route, Iraq were to resume
full and independent control over the world's third-largest proven oil
reserves -- 200 to 300 million barrels of light crude worth as much as
$30 trillion at today's prices -- a politically incorrect question
might break rudely out of the Internet universe and into the
mainstream media world, into, that is, the open: Has the Iraq war been
an oil war from the outset?

Former Federal Reserve Chairman Alan Greenspan evidently thought so or
so he indicated in a single sentence in his recent memoir: "I am
saddened that it is politically inconvenient to acknowledge what
everyone knows: the Iraq war is largely about oil." When asked, Gen.
John Abizaid, former CENTCOM commander who oversaw three and a half
years of the American occupation of Iraq, agreed. "Of course it's
about oil, we can't really deny that," he said during a roundtable
discussion at Stanford University. These confessions validated the
suspicions of foreign observers too numerous to count. Veteran
security analyst Thomas Powers observed in the New York Review of
Books recently:


What it was only feared the Russians might do [by invading Afghanistan
in the 1980s] the Americans have actually done -- they have planted
themselves squarely astride the world's largest pool of oil, in a
position potentially to control its movement and to coerce all the
governments who depend on that oil. Americans naturally do not suspect
their own motives but others do. The reaction of the Russians, the
Germans, and the French in the months leading up to the war suggests
that none of them wished to give Americans the power which [former
National Security Adviser Zbigniew] Brzezinski had feared was the goal
of the Soviets.

Apologists for the war point out lamely that the United States imports
only a small fraction of its oil from Iraq, but what matters, rather
obviously, is not Iraq's current exports but its reserves.

Before the invasion of Iraq in March 2003, media mogul Rupert Murdoch
said, "The greatest thing to come out of this for the world economy,
if you could put it that way, would be $20 a barrel for oil." In the
twenty-first century's version of the "Great Game" of nineteenth
century imperialism, the Bush administration made a colossal gamble
that Iraq could become a kind of West Germany or South Korea on the
Persian Gulf -- a federal republic with a robust, oil-exporting
economy, a rising standard of living, and a set of U.S. bases that
would guarantee lasting American domination of the most resource-
strategic region on the planet. The political half of that gamble has
already been lost, but the Bush administration has proven adamantly
unwilling to accept the loss of the economic half, the oil half,
without a desperate fight. Perhaps the five super-bases that the U.S.
has been constructing in Iraq for as many as 20,000 troops each, plus
the ill-built super-embassy (the largest on the planet) it has been
constructing inside the Green Zone, will suffice to maintain American
control over the oil reserves, even in defiance of international law
and the officially stated wishes of the Iraqi people -- but perhaps
not.

Blackwater and the Sovereignty Showdown

In any case, a kind of slow-motion showdown may lie not so far ahead;
and, during the past weeks, we may have been given a clue as to how it
could unfold. Recall that after the gunning down of at least 17 Iraqis
in a Baghdad square, Prime Minister al-Maliki demanded that the State
Department dismiss and punish the trigger-happy private security firm,
Blackwater USA, which was responsible for the safety of American
diplomatic personnel in Iraq. He further demanded that the immunity
former occupation head L. Paul Bremer III had granted, in 2004, to all
such private security firms be revoked.

Startled, the Bush administration briefly grounded its diplomatic
operations, then defiantly resumed them -- with security still
provided by Blackwater. Within days, though, Bush found himself face-
to-face in New York with al-Maliki for discussions whose topic
National Security Advisor Stephen Hadley revealingly named as "Iraqi
sovereignty." Who would blink first?

We're still waiting to see, but in the wake of an Iraqi investigation
ended with a demand for $8 million compensation for each of the 17
murdered Baghdadis, Blackwater is reportedly "on its way out" of
security responsibility in Iraq, probably by the six-month deadline
that al-Maliki has demanded. Despite its disgrace, the well-connected
private security company continues to win lucrative State Department
security contracts. Blackwater expert Jeremy Scahill told Bill Moyers
that losing the Iraq gig would only slightly affect Blackwater's
bottom line, but could grievously inconvenience U.S. diplomatic
operations in Iraq. In forcing such a crisis on the State Department,
the al-Maliki government, whose powerlessness has been an assumption
unchallenged from left or right (in or out of Iraq), suddenly looks a
good deal stronger.

But oil matters more to Washington than Blackwater does. In September,
when the effort to enact U.S.-favored oil legislation -- a much-
announced "benchmark" of both the White House and Congress --
collapsed in Iraq's legislature, the coup de grace seemed to be
delivered by a wildcat agreement between the Kurdistan Regional
Government and Hunt Oil of Dallas, Texas, headed by Ray L. Hunt, a
longtime Bush ally and a member of the President's Foreign
Intelligence Advisory Board. This agreement, undertaken against the
stated wishes of the central government, provides for the separate
development of Kurdistan's oil resources and puts the Kurds in
blatant, preemptive violation of the pending legislation. It makes, in
fact, such a mockery of that legislation that the prospect of its
passage before the Development Fund mandate expires is now vanishingly
small.

Endgame for Iraqi Oil?

If the mandate expires and the law is not passed, then what? Then
others in Iraq may well seek to follow the Kurdish example and cut
comparable deals with whomever they wish. The central government, even
if it has lost effective control of the Kurdish north and the Sunni
west, could well ratify resource-separatism by contracting for the
development of the oil resources in the territory generally remaining
under its control. Thus, a new, Iran-allied, oil-rich, nine-province
Shiite Iraq could match Kurdistan's deal with one of its own, perhaps
even with ready-and-willing China. Will any combination of American
military and diplomatic pressure suffice to stop such an untoward
outcome?

Clearly, some in Washington still think so. Shortly before the
collapse of the Iraqi oil legislation effort, Bush's Commerce
Department began quietly advertising for an Arabic-speaking legal
advisor to help it in "providing technical assistance to Iraq to
create a legal and tax environment conducive to domestic and foreign
investment in Iraq's key economic sectors, starting with the mineral
resources sector." (Read: starting with oil.)

As it happens, the job description overlaps heavily with that of the
Development Fund for Iraq's existing International Advisory and
Monitoring Board, whose responsibility, according to U.N. Security
Council Resolution 1483, has been to see to it "that all export sales
of petroleum, petroleum products, and natural gas from Iraq.... shall
be made consistent with prevailing international marketing best
practices." Is the Commerce Department already planning for the demise
of this board? Like the super-embassy and the super-bases, this bit of
Commerce Department staffing-up bespeaks the urge to continue an
invasive American presence in Iraq, including Iraq's energy sector,
long after December 31, 2008.

But if the occupation is shut down legally after that date and if
Iraqi control over Iraqi oil reverts -- legally, at least -- to
something close to pre-war status, that Commerce Department expert may
find him or herself playing a less-than-major role in Baghdad.
Instead, expect a new role for Iraq's hitherto excluded pool of
domestic expertise. The Iraq National Oil Company began operations
back in 1961; its legacy includes a skilled work force of trained oil
workers. Notable, in fact, among those opposed to the failed oil
legislation is the Iraqi Federation of Oil Unions. Its members object
to provisions in the legislation that permit the hiring of foreign oil
workers rather than Iraqis and -- in classic Bush Administration
fashion -- exclude the union from any participation in contract
negotiations. The Federation's protests have attracted a letter of
support signed by six Nobel Peace Prize laureates.

Even with Iraqi expertise duly factored in, oil remains a complicated
business, and foreign expertise and capital will remain indispensable
in Iraq. Still, for the Shiite-dominated central government, the most
trusted foreign supplier of supplementary expertise, manpower, and
even capital would seem to be Iran. For now, the United States is
paying many of the salaries in Baghdad; but Iran's president,
predicting an American withdrawal, has lately declared his readiness
to "fill the [regional power] gap, with the help of neighbors and
regional friends like Saudi Arabia, and with the help of the Iraqi
nation."

This invitation to regional collaboration will surely strike the less
populous, militarily more vulnerable Saudis as disingenuous in the
extreme, but Iran may be hard to stop. As former ambassador Peter
Galbraith has explained: "Since 2005, Iraq's Shiite-led government has
concluded numerous economic, political, and military agreements with
Iran. The most important would link the two countries' strategic oil
reserves by building a pipeline from southern Iraq to Iran, while
another commits Iran to providing extensive military assistance to the
Iraq government." On Oct. 17, the al-Maliki regime flexed its
supposedly non-existent muscle yet again by awarding $1.1 billion in
contracts to Iran and China to build enormous power plants in
Baghdad's Shiite Sadr City and between the two Shiite holy cities of
Najaf and Karbala.

The prospect that, in the endgame for Iraqi oil, the victor might be
Shiite Iran (and indirectly Communist China) may help explain recent
American calls for the replacement of the devoutly Shiite Prime
Minister al-Maliki. Yet, even if American pressure leads to al-
Maliki's ouster, the Iraqi parliament cannot be ousted with him. The
prime minister's announcement that the next renewal of the multi-force
mandate would be the last came, in fact, in response to a binding
resolution in parliament that the next renewal, unlike previous ones,
may not be at the request of the prime minister alone, but only with
the advice and consent of parliament. It has voted once already, in a
non-binding resolution, to require the United States to set a
timetable for withdrawal.

Fragile as it is, the government of Iraq enjoys international legal
recognition, and the underestimated al-Maliki is evidently not without
resources when it comes to asserting Iraqi sovereignty over American
autonomy within Iraq's borders. In "Blackwatergate," he found a
remarkable pressure point, declaring that no new law would be passed
in Iraq until the Blackwater matter was resolved to his satisfaction.
Nor was al-Maliki necessarily whistling in the dark when he warned his
American critics, "We can find friends elsewhere."

The expiration date that Iraq has now set for the operation of a
multinational force on its territory coincides almost exactly with the
end of the Bush administration. As that date nears, the endgame
question may become: How far can the administration go in repudiating
its own erstwhile agenda and returning Iraq to its pre-war status --
that is, to U.S.-backed Sunni domination of Iraqi domestic politics.
That would, of course, result in armed Iraqi hostility to the
administration's enemy of enemies in the region, Iran, and a resigned
return to collaboration with the Saudi-dominated Organization of the
Petroleum Exporting Countries (OPEC) in the management of the world
oil market, all under a largely offshore U.S. military umbrella. Will
the fallback dream now be the one the President's father entertained
after Gulf War I -- the creation in Baghdad of a kinder, gentler
Saddam Hussein with whom, to use the classic phrase, the U.S. can "do
business"?

Time will tell, but not too much time. The eerie silence of the Bush
administration about oil grows all the more deafening as the price of
crude climbs toward $100 a barrel. Blood for oil may never have been a
good deal, but so much blood for no oil at all may seem a far worse
one.

Jack Miles is senior fellow for religious affairs with the Pacific
Council on International Policy and professor of English and religious
studies at the University of California, Irvine. He is the author of
the Pulitzer Prize-winning God: A Biography, among other works.
 
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