New Oil Law Means Victory in Iraq for Bush

The Victors

By Chris Floyd
t r u t h o u t UK Correspondent
Monday 08 January 2007

I. Surging Toward the Ultimate Prize

The reason that George W. Bush insists that "victory" is achievable in Iraq is not that he is deluded or isolated or ignorant or detached from reality or ill-advised. No, it's that his definition of "victory" is different from those bruited about in his own rhetoric and in the ever-earnest disquisitions of the chattering classes in print and online. For Bush, victory is indeed at hand. It could come at any moment now, could already have been achieved by the time you read this. And the driving force behind his planned "surge" of American troops is the need to preserve those fruits of victory that are now ripening in his hand.

At any time within the next few days, the Iraqi Council of Ministers is expected to approve a new "hydrocarbon law" essentially drawn up by the Bush administration and its UK lackey, the Independent on Sunday reported. The new bill will "radically redraw the Iraqi oil industry and throw open the doors to the third-largest oil reserves in the world," says the paper, whose reporters have seen a draft of the new law. "It would allow the first large-scale operation of foreign oil companies in the country since the industry was nationalized in 1972." If the government's parliamentary majority prevails, the law should take effect in March.

As the paper notes, the law will give Exxon Mobil, BP, Shell and other carbon cronies of the White House unprecedented sweetheart deals, allowing them to pump gargantuan profits from Iraq's nominally state-owned oilfields for decades to come. This law has been in the works since the very beginning of the invasion - indeed, since months before the invasion, when the Bush administration brought in Phillip Carroll, former CEO of both Shell and Fluor, the politically-wired oil servicing firm, to devise "contingency plans" for divvying up Iraq's oil after the attack. Once the deed was done, Carroll was made head of the American "advisory committee" overseeing the oil industry of the conquered land, as Joshua Holland of Alternet.com has chronicled in two remarkable reports on the backroom maneuvering over Iraq's oil: "Bush's Petro-Cartel Almost Has Iraq's Oil and "The US Takeover of Iraqi Oil."

From those earliest days until now, throughout all the twists and turns, the blood and chaos of the occupation, the Bush administration has kept its eye on this prize. The new law offers the barrelling buccaneers of the West a juicy set of production-sharing agreements (PSAs) that will maintain a fig leaf of Iraqi ownership of the nation's oil industry - while letting Bush's Big Oil buddies rake off up to 75 percent of all oil profits for an indefinite period up front, until they decide that their "infrastructure investments" have been repaid. Even then, the agreements will give the Western oil majors an unheard-of 20 percent of Iraq's oil profits - more than twice the average of standard PSAs, the Independent notes.

Of course, at the moment, the "security situation" - i.e., the living hell of death and suffering that Bush's "war of choice" has wrought in Iraq - prevents the Oil Barons from setting up shop in the looted fields. Hence Bush's overwhelming urge to "surge" despite the fierce opposition to his plans from Congress, the Pentagon and some members of his own party. Bush and his inner circle, including his chief adviser, old oilman Dick Cheney, believe that a bigger dose of blood and iron in Iraq will produce a sufficient level of stability to allow the oil majors to cash in the PSA chips that more than 3,000 American soldiers have purchased for them with their lives.

The American "surge" will be blended into the new draconian effort announced over the weekend by Iraqi prime minister Nouri al-Maliki: an all-out war by the government's Shiite militia-riddled "security forces" on Sunni enclaves in Baghdad, as the Washington Post reports. American troops will "support" the "pacification effort" with what Maliki says calls "house-to-house" sweeps of Sunni areas. There is of course another phrase for this kind of operation: "ethnic cleansing."

The "surged" troops - mostly long-serving, overstrained units dragooned into extended duty - are to be thrown into this maelstrom of urban warfare and ethnic murder, temporarily taking sides with one faction in Iraq's hydra-headed, multi-sided civil war. As the conflict goes on - and it will go on and on - the Bush administration will continue to side with whatever faction promises to uphold the "hydrocarbon law" and those profitable PSAs. If "Al Qaeda in Iraq" vowed to open the nation's oil spigots for Exxon, Fluor and Halliburton, they would suddenly find themselves transformed from "terrorists" into "moderates" - as indeed has Maliki and his violent, sectarian Dawa Party, which once killed Americans in terrorist actions but are now hailed as freedom's champions.

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 >>cont

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