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Oil & Iraq - Dec 9

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Iraq oil wealth distribution planned

Bushra Juhi, Associated Press
Iraqi legislation intended to resolve the politically charged question of distributing the country's oil wealth is nearing completion, the chairman of a panel drafting the law said Saturday.

The distribution of oil revenues, the mainstay of Iraq's economy, is at the heart of some of Iraq's most contentious political issues, including the push by Shiite leaders to allow the oil-rich south of Iraq to set up a self-rule region a similar to a Kurdish one in the north.

...Iraq is believed to produce around 2.2 million barrels of oil a day and exports about 1.5 million, well below prewar levels. Insurgent attacks have frequently targeted oil facilities and pipelines, disrupting exports and disrupting efforts to modernize the industry.

The Iraq Study Group recommended that the U.S. government work with Iraqis to come up with a clear, legal framework for oil investment. It also suggested that the U.S. military work with Iraqi and private security forces to protect oil facilities.
(9 Dec 2006)


It's still about oil in Iraq

Antonia Juhasz, LA Times
A centerpiece of the Iraq Study Group's report is its advocacy for securing foreign companies' long-term access to Iraqi oil fields.
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WHILE THE Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.

Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq's importance to its region, the U.S. and the world with this reminder: "It has the world's second-largest known oil reserves." The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq's national oil industry will be commercialized and opened to foreign firms.

The report makes visible to everyone the elephant in the room: that we are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met.

It's spelled out in Recommendation No. 63, which calls on the U.S. to "assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies." This recommendation would turn Iraq's nationalized oil industry into a commercial entity that could be partly or fully privatized by foreign firms.

...For any degree of oil privatization to take place, and for it to apply to all the country's oil fields, Iraq has to amend its constitution and pass a new national oil law. The constitution is ambiguous as to whether control over future revenues from as-yet-undeveloped oil fields should be shared among its provinces or held and distributed by the central government.

This is a crucial issue, with trillions of dollars at stake, because only 17 of Iraq's 80 known oil fields have been developed. Recommendation No. 26 of the Iraq Study Group calls for a review of the constitution to be "pursued on an urgent basis." Recommendation No. 28 calls for putting control of Iraq's oil revenues in the hands of the central government. Recommendation No. 63 also calls on the U.S. government to "provide technical assistance to the Iraqi government to prepare a draft oil law."

...Further, the Iraq Study Group would commit U.S. troops to Iraq for several more years to, among other duties, provide security for Iraq's oil infrastructure. ...

All told, the Iraq Study Group has simply made the case for extending the war until foreign oil companies — presumably American ones — have guaranteed legal access to all of Iraq's oil fields and until they are assured the best legal and financial terms possible.

Antonia Juhasz is a visiting scholar at the Institute for Policy Studies and author of "The Bush Agenda: Invading the World, One Economy at a Time."
(8 Dec 2006)
Also posted at Common Dreams.


The Baker Agenda: Troops out, Oil Companies in?

Tom Hayden, Common Dreams
Recommendations 62 and 63 confirm that control of Iraqi oil is a fundamental premise of Administration policy. This was denied in the first years of the war, but this week the President confirmed his belief that Islamic extremists will “gain access to vast oil reserves and use Iraq as a base to overthrow moderate governments all across the broader Middle East.” [LAT, 12-6-06]. Then James Baker revealed the interest of his longtime oil industry allies, as well as key financial and corporate interests, in an Iraq resolution favorable to their narrow interests.

Recommendation 62 says the US government should help draft an oil law that “creates a fiscal and legal framework for investment.” It further recommends that the US, in conjunction with the International Monetary Fund [IMF], should “pres Iraq to continue reducing subsidies in the energy sector...until Iraqis pay market prices for oil products...” That is, in a country besieged by civil war, bombings of infrastructure, unemployment at 50 percent levels, and the lack of necessities, the Baker Report proposes to make everyday life harder for average Iraqis so that the oil industry profits.

Recommendation 63 says the US should “assist” Iraqi leaders in privatizing the national oil industry into a “commercial enterprise” to encourage investment by the multi-national oil companies.
(8 Dec 2006)


Oil for Sale: Iraq Study Group Recommends Privatization

Antonia Juhasz, Alternet
The Iraq Study Group may not have a solution for how to end the war, but it does have a way for its corporate friends to make money.
~~
In its heavily anticipated report released on Wednesday, the Iraq Study Group made at least four truly radical proposals.

The report calls for the United States to assist in privatizing Iraq's national oil industry, opening Iraq to private foreign oil and energy companies, providing direct technical assistance for the "drafting" of a new national oil law for Iraq, and assuring that all of Iraq's oil revenues accrue to the central government.

President Bush hired an employee from the U.S. consultancy firm Bearing Point Inc. over a year ago to advise the Iraq Oil Ministry on the drafting and passage of a new national oil law. As previously drafted, the law opens Iraq's nationalized oil sector to private foreign corporate investment, but stops short of full privatization. The ISG report, however, goes further, stating that "the United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise."
(7 Dec 2006)

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