dear folLowers, i will return with new post on 16th september
Mission Accomplished for Big Oil?
In 2011, after nearly nine years of war and occupation, U.S. troops
finally left Iraq. In their place, Big Oil is now present in force and the
country’s oil output, crippled for decades, is growing again. Iraq recently
reclaimed the number two position in the Organization of the
Petroleum Exporting Countries (OPEC), overtaking oil-sanctioned Iran. Now,
there’s talk of a new world petroleum glut. So is this finally mission
accomplished?Well, not exactly. In fact, any oil company victory in Iraq is
likely to prove as temporary as George W. Bush’s triumph in 2003. The main
reason is yet another of those stories the mainstream media didn’t quite find
room for: the role of Iraqi civil society. But before telling that story, let’s
look at what’s happening to Iraqi oil today, and how we got from the “no blood
for oil” global protests of 2003 to the present moment.Here, as a start, is a
little scorecard of what’s gone on in Iraq since Big Oil arrived two and a half
years ago: corruption’s
skyrocketed; two Western oil companies are being investigated for either giving
or receiving
bribes; the Iraqi government is paying oil companies a
per-barrel fee according to wildly unrealistic production targets they’ve set,
whether or not they deliver that number of barrels; contractors are heavily over-charging
for drilling wells, which the companies don’t mind since the Iraqi government
picks up the tab.Meanwhile, to protect the oil giants from dissent and protest,
trade union offices have been raided,
computers seized and equipment smashed, leaders arrested and
prosecuted. And that’s just in the oil-rich southern part of the
country. In Kurdistan in the north, the regional government awards
contracts on land outside its jurisdiction, contracts which permit the
government to transfer its stake in the oil projects up to 25%
to private companies of its choice. Fuel is smuggled
across the border to the tune of hundreds of tankers a day.In Kurdistan, at
least the approach is deliberate: the two ruling families of the region, the
Barzanis and Talabanis, know that they can do whatever they like, since their
Peshmerga militia control the territory. In contrast, the Iraqi federal
government of Prime Minister Nouri al-Maliki has little control over anything.
As a result, in the rest of the country the oil industry operates,
gold-rush-style, in an almost complete absence of oversight or regulation.Oil
companies differ as to which of these two Iraqs they prefer to operate in. BP
and Shell have opted to rush for black gold in the super-giant oilfields of
southern Iraq. Exxon
has hedged its bets by investing in both options. This summer, Chevron
and the French oil company Total
voted for the Kurdish approach, trading smaller oil fields for better terms and
a bit more stability.Keep in mind that the incapacity of the Iraqi government
is hardly limited to the oil business: stagnation hangs over its every
institution. Iraqis still have an average of just five hours of electricity
a day, which in 130-degree heat causes tempers to boil over regularly. The
country’s two great rivers, the Tigris and Euphrates, which watered the cradle
of civilization 5,000 years ago, are drying up.
This is largely due to the inability of the government to engage in effective
regional diplomacy that would control upstream dam-building by Turkey.After
elections in 2010, the country’s leading politicians couldn’t even agree on how
to form a government until the Iraqi Supreme Court forced them
to. This record of haplessness, along with rampant corruption,
significant repression, and a revival of sectarianism can all be traced back to
American decisions in the occupation years. Tragically, these persistent ills
have manifested themselves in a recent spate of car-bombings and other bloody
attacks.In the period before and around the invasion, the Bush administration barely
mentioned Iraqi oil, describing it reverently only as that country’s
“patrimony.” As for the reasons for war, the administration insisted that it
had barely noticed Iraq had one-tenth of the world’s oil reserves. But my new
book reveals documents
I received, marked SECRET/NOFORN, that laid out for the first time pre-war oil
plans hatched in the Pentagon by arch-neoconservative Douglas Feith’s Energy
Infrastructure Planning Group (EIPG).In
November 2002, four months before the invasion, that planning group came up
with a novel idea: it proposed that any American occupation authority not
repair war damage to the country’s oil infrastructure, as doing so “could
discourage private sector involvement.” In other words, it suggested that the
landscape should be cleared of Iraq’s homegrown oil industry to make room for
Big Oil.When the administration worried that this might disrupt oil markets,
EIPG came up with a new strategy under which initial repairs would be carried
out by KBR, a subsidiary of Halliburton. Long-term contracts with multinational
companies, awarded by the U.S. occupation authority, would follow.
International law notwithstanding, the EIPG documents noted cheerily that such
an approach would put “long-term downward pressure on [the oil] price” and
force “questions about Iraq’s future relations with OPEC.”At the same time, the
Pentagon planning group recommended that Washington state that its policy was
“not to prejudice Iraq’s future decisions regarding its oil development
policies.” Here, in writing, was the approach adopted in the years to come by
the Bush administration and the occupation authorities: lie to the public while
secretly planning to hand Iraq over to Big Oil.There turned out, however, to be
a small kink in the plan: the oil companies declined the American-awarded
contracts, fearing that they would not stand up in international courts and so
prove illegitimate. They wanted Iraq first to have an elected permanent
government that would arrive at the same results. The question then became how
to get the required results with the Iraqis nominally in charge. The answer:
install a friendly government and destroy the Iraqi oil industry.In July 2003,
the U.S. occupation established the Iraqi Governing Council, a
quasi-governmental body led by friendly Iraqi exiles who had been out of the
country for the previous few decades. They would be housed in an area of
Baghdad isolated from the Iraqi population by concrete blast walls and machine
gun towers, and dubbed the Green Zone. There, the politicians would
feast, oblivious to and unconcerned with the suffering of the rest of the
population.The first post-invasion Oil Minister was Ibrahim Bahr al-Uloum, a
man who held the country’s homegrown oil expertise in open contempt. He quickly
set about sacking the technicians and managers who had built the industry
following nationalization in the 1970s and had kept it running through wars and
sanctions. He replaced them with friends and fellow party members. One typical
replacement was a former pizza chef.The resulting damage to the oil industry
exceeded anything caused by missiles and tanks. As a result the country found
itself -- as Washington had hoped -- dependent on the expertise of foreign
companies. Meanwhile, not only did the Coalition Provisional authority (CPA)
that oversaw the occupation lose $6.6 billion of Iraqi money, it effectively
suggested corruption wasn't something to worry about. A December 2003 CPA
policy
document recommended that Iraq follow the lead of Azerbaijan, where
the government had attracted oil multinationals despite an atmosphere of
staggering corruption (“less attractive governance”) simply by offering highly
profitable deals. Now, so many years later, the corruption is
all-pervasive and the multinationals continue to operate without oversight, since
the country’s ministry is run by the equivalent of pizza chefs.The first
permanent government was formed under Prime Minister Maliki in May 2006. In the preceding months, the American and British governments made sure
the candidates for prime minister knew what their first priority had to be: to
pass a law legalizing the return of the foreign multinationals tossed out of
the country in the 1970s to run the oil sector.The law was drafted within
weeks, dutifully shown to U.S. officials within days, and to oil multinationals not long after. Members of the Iraqi parliament, however, had to
wait seven months to see the text.The trouble was: getting it through that parliament
proved far more difficult than Washington or its officials in Iraq had
anticipated. In January 2007, an impatient President Bush announced a “surge”
of 30,000 U.S. troops into the country, by then wracked by a bloody civil war.
Compliant journalists accepted the story of a gamble
by General David Petraeus to bring peace to warring Iraqis.In fact, those
troops spearheaded a strategy
with rather less altruistic objectives: first, broker a new political
deal among U.S. allies, who were the most sectarian and corrupt of
Iraq’s politicians (hence, with the irony characteristic of American foreign
policy, regularly described as “moderates”); second, pressure them to deliver
on political objectives set in Washington and known as “benchmarks” -- of which
passing the oil law was the only one ever really talked about: in President
Bush’s biweekly video
conferences with Maliki, in almost daily meetings of the U.S.
ambassador in Baghdad, and in frequent visits by senior administration
officials.On this issue, the Democrats, by then increasingly against the Iraq
War but still pro-Big Oil, lent a helping hand to a Republican administration.
Having failed to end the war, the newly Democrat-controlled Congress passed an appropriations
bill that would cut off reconstruction funds to Iraq if the oil law
weren’t passed. Generals
warned that without an oil law Prime Minister Maliki would lose
their support, which he knew well
would mean losing his job. And to ramp up the pressure further, the U.S. set a
deadline of September 2007 to pass the law or face the consequences.It was then
that things started going really wrong for Bush and company. In December 2006,
I was at a meeting
where leaders of Iraq’s trade unions decided to fight the oil law. One of them
summed up the general sentiment this way: “We do not need thieves to take us
back to the middle ages.” So they began organizing. They printed pamphlets,
held public
meetings and conferences, staged protests,
and watched support for their movement grow. Most Iraqis feel strongly
that the country’s oil reserves belong in the public sector, to be developed to
benefit them, not foreign energy companies. And so word spread fast -- and with
it, popular anger. Iraq’s oil
professionals and various civil society groups denounced the law.
Preachers railed against it in Friday sermons. Demonstrations were held in
Baghdad and elsewhere, and as Washington ratcheted up the pressure, members of
the Iraqi parliament started to see political opportunity in aligning
themselves with this ever more popular cause. Even some U.S. allies in
Parliament confided in diplomats at the American embassy that it would be
political suicide to vote for the law.By the September deadline, a majority of
the parliament was against the law and a
remarkable victory for the trade unions it was not passed. It’s still not
passed today.Given the political capital the Bush administration had invested
in the passage of the oil law, its failure offered Iraqis a glimpse of the
limits of U.S. power, and from that moment on, Washington’s influence began to
wane.Things changed again in 2009 when the Maliki government, eager for oil
revenues, began awarding contracts to them even without an oil law in place. As
a result, however, the victory of Big Oil is likely to be a temporary one: the
present contracts are illegal, and so they will last only as long as there’s a
government in Baghdad that supports them.This helps explain why the
government's repression of trade unions increased
once the contracts were signed. Now, Iraq is showing signs of a more
general return to
authoritarianism (as well as internecine violence
and possibly renewed sectarian conflict).But there is another possibility for
Iraq. Years before the Arab Spring, I saw what Iraqi civil society can achieve
by organizing: it stopped the world’s superpower from reaching its main
objective and steered Iraq onto a more positive course.Many times since 2003
Iraqis have moved their country in a more democratic direction: establishing
trade unions in that year, building Shi'a-Sunni connections in 2004, promoting
anti-sectarian politicians in 2007 and 2008, and voting for them in 2009.
Sadly, each of these times Washington has pushed it back toward sectarianism,
the atmosphere in which its allies thrive. While mainstream
commentators now regularly blame the recent escalation of violence on the
departure of U.S. troops, it would be more accurate to say that the real reason
is they didn’t leave far sooner.Now, without its troops and bases, much of
Washington’s political heft has vanished. Whether Iraq heads in the
direction of dictatorship, sectarianism, or democracy remains to be seen, but
if Iraqis again start to build a more democratic future, the U.S. will no
longer be there to obstruct it. Meanwhile, if a new politics does emerge,
Big Oil may discover that, in the end, it was mission unaccomplished.
