Thursday, November 16, 2006

Benchmark: December

Forget finishing the war for Poppy. Forget showing up Poppy: this is how you fight a war, Clueless Dad! Forget bringing democracy to the Middle East. Forget saving a helpless country -- hell, an entire benighted region -- from a brutal, Hitlerian dictator.

It's the OIL, stupid.

I've cherry-picked some excerpts for your reading pleasure.
Iraq is sitting on a mother lode of some of the lightest, sweetest, most profitable crude oil on earth, and the rules that will determine who will control it and on what terms are about to be set.

The Iraqi government faces a December deadline, imposed by the world's wealthiest countries, to complete its final oil law. Industry analysts expect that the result will be a radical departure from the laws governing the country's oil-rich neighbors, giving foreign multinationals a much higher rate of return than with other major oil producers and locking in their control over what George Bush called Iraq's "patrimony" for decades, regardless of what kind of policies future elected governments might want to pursue.

Chafing at the idea that the Chinese and Russians might end up with what is arguably the world's greatest energy prize, [oil] industry leaders lobbied hard for regime change throughout the 1990s. With the election of George W. Bush and Dick Cheney in 2000 -- the first time in U.S. history that two veterans of the oil industry had ever occupied the nation's top two jobs -- they would finally get the "greater access" to the region's oil wealth, which they had long lusted after.

But the execs from Big Oil didn't just want access to Iraq's oil; they wanted access on terms that would be inconceivable unless negotiated at the barrel of a gun. Specifically, they wanted an Iraqi government that would enter into production service agreements (PSAs) for the extraction of Iraq's oil.

PSAs, developed in the 1960s, are a tool of today's kinder, gentler neocolonialism; they allow countries to retain technical ownership over energy reserves but, in actuality, lock in multinationals' control and extremely high profit margins -- up to 13 times oil companies' minimum target, according to an analysis by the British-based oil watchdog Platform (PDF)

PSAs often have long terms -- up to 40 years -- and contain "stabilization clauses" that protect them from future legislative changes. As Muttit points out, future governments "could be constrained in their ability to pass new laws or policies." That means, for example, that if a future elected Iraqi government "wanted to pass a human rights law, or wanted to introduce a minimum wage [and it] affected the company's profits, either the law would not apply to the company's operations or the government would have to compensate the company for any reduction in profits." It's Sovereignty Lite [emphasis mine].

And those are just from part one of Joshua Holland's two-part series Bush's Petro-Cartel Almost Has Iraq's Oil over at AlterNet.
[read part two here]


Anonymous said...

The kicker is that it's hard to see how securing the oil capital has been very effective. Isn't production way, way down? Of course if you're in the security business too...

I've little time to respond substantively this afternoon (that sort of thing requires research, you know). Obviously oil was a big deal for the invasion, but haven't formed a good opinion on how cynically it was pursued.

I did want to point out, however, that you followed twiffer's law about announced hiatuses quite flawlessly. (Which is a good thing, don't worry.)


hipparchia said...

well, we haven't secured it very securely, that's for sure.

and the [sock?]puppets we tried to install in the new iraqi government are showing signs of wanting to throw off our influence and do things their way instead. imagine that.

and if it all blows up and goes to hell, we may have at least kept those uppity chinese [and russia? india? who else?] from getting their grubby paws on that cheap, plentiful, and easy-to-extract oil for a littl while longer.

woof! says the dog in the manger.

my grand unified theory of the invasion of iraq:

-afghanistan was a blind
-dubya wanted outdo poppy
-cheney wanted the oil
-now that things are going badly, dubya is soothing his conscience by imagining that he has saved the iraqis from the midlle eastern version of hitler.

do i sound cynical?

i read through the whole thing once, but i really should go back and study it [and some other things] some more before making these sweeping pronouncements.

glad to hear i've properly applied twiffer's law of hiatuses. i wasn't entirely sure i was doing it right.