Before the invasion of Iraq, while millions demonstrated
in the streets, often waving homemade placards with "No Blood for Oil"
or equivalents like "Don't Trade Lives for Oil" and like
"How Did USA's Oil Get Under Iraq's Sand?" the Bush administration said
remarkably little about the vast quantities of petroleum on which Saddam Hussein's
regime was perched. The President did, however, speak reverently about preserving
not Iraq's "energy reserves" but its "patrimony," as he so euphemistically put
it. The American mainstream media followed suit, dismissing arguments about
the significance of Iraqi and Middle Eastern oil as the refuge of, if not scoundrels,
then at least truly simpleminded dissidents who knew not whereof they spoke.
Generally, in our news pages and on the TV news, with Iraq at the edge of a
shock-and-awe invasion, Iraqi energy reserves were dealt with as if no more
than a passing thought, as if the Middle East's main export was hummus.
Little has changed. When former Fed chief Alan Greenspan recently indicated
in passing in his memoir that the war was "about oil," there was a brief firestorm
of scorn in Washington; an administration spokesperson termed
it "Georgetown cocktail party analysis" ("A refill of crude, please, straight
up…") and Greenspan quickly began to backtrack
under the pressure. Oil? Who us? The Bush administration's plans to protect
the Oil Ministry in Baghdad and Iraq's major oil fields amid otherwise unchecked
chaos in April 2003 were certainly noted in the news, but went largely uncommented
upon (unless you were an Internet news jockey).
Here's the strange thing about the Iraq oil "debate" in our media world. Call
me crazy, but if you were going to invade Iraq and oil wasn't right at the forefront
of your brain, you would be truly derelict, even if you hadn't run
a major energy services corporation or hadn't had a double-hulled oil tanker
after you. Jack Miles, author of the Pulitzer-Prize-winning book God:
A Biography and the first writer to consider
Iraqi casualties at Tomdispatch (or probably much of anywhere else) back
in July 2003, now takes up the oil endgame of which, except in
the Web world, there has largely been neither a beginning game nor a middle
Endgame for Iraqi Oil?
The Sovereignty Showdown in Iraq
By Jack Miles
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
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 Nouri 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
them with security still provided by Blackwater. Within days, though,
Bush found himself face-to-face in New York with 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
its way out" of security responsibility in Iraq, probably by the six-month
deadline that 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 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
Shi'ite 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
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 Shi'ite-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 Shi'ite-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 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 Shi'ite Sadr City and between the two Shi'ite holy cities of Najaf
The prospect that, in the endgame for Iraqi oil, the victor might be Shi'ite
Iran (and indirectly Communist China) may help explain recent American calls
for the replacement of the devoutly Shi'ite Prime Minister Maliki. Yet, even
if American pressure leads to 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 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 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
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.
Copyright 2007 Jack Miles