[Texgreen] Fwd: Benchmark Boogie: A Guide to the Struggle Over Iraq's Oil

Tue, 4 Sep 2007 10:26:30 -0400

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This is a little dated but important now as we get into September and with
Bush's surprise visit to Iraq.  Any doubt as to why?

Craig

If you visit
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVVEAgFLA1MB
you will find active links for all of the sources provided below.

enjoy!

Benchmark Boogie: A Guide to the Struggle Over Iraq's Oil
By Antonia Juhasz, AlterNet
Posted on July 14, 2007, Printed on July 14, 2007
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVVEAgFLA1MBstory/56672/

Your guide to the ongoing dance between Bush, the Congress, and the
Iraqi government; an update on the current status of the proposed oil
laws; and some steps you can take to stop the hijacking of Iraq's oil.

What does a war for oil look like? American troops going into battle
with tanks waving "Exxon Mobil" and "Chevron" flags right behind? Are
the flags then planted squarely in the ground and the oil beneath
officially declared war bounty? Well, some members of the Bush
administration and U.S. oil companies may have favored such an
approach. But the device ultimately chosen to win this war for oil is
only slightly more subtle: a law, to be passed by the Iraqis
themselves, which would turn Iraq's oil over to foreign oil companies.

The president's benchmark

The U.S. State Department Iraq Study Group began laying the
foundations for the new law prior to the invasion of Iraq. Its
recommendations, released only after the invasion, were quickly
enshrined in a draft oil law introduced to the interim Iraqi
government by the U.S.-appointed interim prime minister of Iraq, Ayad
Allawi (a former CIA operative).

The Bush administration has spent four years trying to force
successive Iraqi governments to pass the law, referred to as either
the "hydrocarbons" or "oil" law. While it has gone through several
permutations, the basics have remained the same and have followed the
original prescriptions set out by the State Department.

The law would change Iraq's oil system from a nationalized model --
all but closed to U.S. oil companies -- to a privatized model open to
foreign corporate control. At least two-thirds of Iraq's oil would be
open to foreign oil companies under terms that they usually only dream
about, including 30-year-long contracts. (For details of the law, see
my March 2007 New York Times Op-Ed, "Whose Oil Is It, Anyway?")

In January, after four years of trying to get the law passed in Iraq,
President Bush went public with this demand when he made his "speech
to the nation" announcing the "surge" of 20,000 additional American
troops to Iraq.

The president explained that the surge would be successful where other
U.S. efforts had failed in Iraq because the Iraqi government would be
held to a set of specific "benchmarks." Those benchmarks were laid out
in a White House Fact Sheet released the same day that explained that
the Iraq government had committed to several economic and political
measures, including to "enact  hydrocarbons law to promote
investment, national unity, and reconciliation."

After the speech, the administration increased public pressure on the
Iraqi government to pass the law. However, that speech was just about
the only time that the president or anyone in the administration would
use the word "investment" to describe the law. Instead, the
adminstration would refer generally to the law's capacity to bring
"national unity and reconciliation" by establishing a mechanism to
evenly distribute Iraq's oil revenues among Iraqis on a per capita
basis.

With few exceptions, the American press has adopted the
adminstration's language and continually and virtually exclusively
refers to the oil law as a revenue sharing measure -- ignoring
completely the fact that Iraqis would only be able to share the
revenues left over after the foreign oil companies received their very
sizeable cut.

The pressure worked. In February, the oil law passed what seemed to be
the most important hurdle, Iraq's cabinet. The cabinet signed off on
the law and agreed to send it to the parliament. However, resistance
in the parliament was too great, and the law was not introduced.

The Kurdistan Regional Government posted the February draft of the oil
law on its website (PDF). The law has almost nothing to say about oil
revenues. In fact, just three sentences of the law addressed this
issue, stating that an additional law -- the "federal revenue law" --
would be required to ensure a "fair distribution" of oil revenues.

Congress adopts the president's benchmark

By the time the Congress took up the issue of funding the war in May,
public awareness of and opposition to the oil law both in Iraq and the
United States had grown substantially. Congress passed and the
president signed the Iraq Supplemental War Spending Bill (PDF) to fund
the Iraq war through the end of September.

In the Supplemental, Congress deliberately adopted the president's
benchmarks, specifically and continually referencing his January 10,
2007, speech. Congress made clear its desire to hold both Bush and the
Iraqi government to the commitment to meet the benchmarks. But, the
words "hydrocarbon law" were never used. Instead, Congress referenced
the president's benchmarks but described only the revenue-sharing
component.

The Supplemental finds that "it is essential that the sovereign
government of Iraq set out measurable and achievable benchmarks and
President Bush said, on January 10, 2007, that 'America will change
our approach to help the Iraqi government as it works to meet these
benchmarks.'" And, "The president's January 10, 2007, address had
three components: political, military, and economic … The United
States strategy in Iraq, hereafter, shall be conditioned on the Iraqi
government meeting benchmarks … including: (iii) Enacting and
implementing legislation to ensure the equitable distribution of
hydrocarbon resources of the people of Iraq without regard to the sect
or ethnicity of recipients, and enacting and implementing legislation
to ensure that the energy resources of Iraq benefit Sunni Arabs, Shia
Arabs, Kurds and other Iraqi citizens in an equitable manner."

Congress stipulated that if the benchmarks were not met by September,
it would cut off funds being made available to Iraq under the
"Economic Support Fund." These are funds used for, among other things,
U.S. reconstruction efforts in Iraq.

Congress required the Bush administration to report back on the status
of the benchmarks by July 15. Thus, a flurry of effort erupted between
the Bush administration and the Al-Maliki government in recent weeks
to try to finally pass the law. Negotiations were rekindled and a new
draft of the oil law was agreed to by the Iraqi cabinet on July 3
(only Arabic translations of the law have been released publicly to
date).

Four days later, on July 7, Usama al-Nujeyfi, a member of Iraq's
parliamentary energy committee, quit in protest over the oil law,
saying that it would cede too much control to global companies and
"ruin the country's future." He vowed to work to defeat the draft in
parliament. His response has been typical of the mood of the
parliament. Thus, while the law has been officially presented to the
parliament, because of the extreme level of opposition, the parliament
has not yet taken the measure up for consideration.

The federal revenue law

At the same time as the new oil law was moving to the parliament,
negotiations were also moving forward on the federal revenue law
(referred by the Bush administration as the "revenue management law").
Although, the revenue law received far more press attention then the
oil law. A limited agreement was reached on the revenue law, but it
has yet to approved by the Iraqi cabinet.

As opposed to the conditions set out by Congress in the Supplemental,
the draft revenue law does differentiate between Iraqis by sect, while
it does not ensure an equitable distribution of revenues to the rest
of Iraq's citizens.

In fact, the current draft of the revenue law (PDF) seems more
concerned with overcoming the resistance of the Kurdistan Regional
Government to the oil law and to demonstrating movement towards its
passage than to actually achieving the goal of equitable and fair
distribution of oil revenues.

The draft guarantees that after Iraq's federal government's expenses
and "strategic projects of benefit to all" are paid for, the Kurdistan
Regional Government will receive a set 17 percent of all oil revenues
"until a population census is held by the state." There is no mention
of how the rest of the country will fare other than that a newly
established commission will "confirm the accuracy and fairness of
distribution of revenues …" There is no standard establish for what a
"fair" distribution means.

None of these incongruities has dulled the interest of the Bush
administration in the revenue law. To the contrary, in its "Initial
Benchmark Assessment Report" submitted to Congress on July 12, the
Bush administration explains, "The United States has provided
technical advice to the Iraqi government and is actively engaged in
encouraging both sides to expeditiously approve the draft 
law."

The revenue and oil laws are two of a package of four laws generally
(and confusingly) also referred to as "the oil law" because of the
centrality of the law that rewrites Iraq's entire oil system. The
revenue law and two others detailing the roles of the Iraq National
Oil Co. and the Ministry of Oil are three small pieces of this larger
transformation.

According to the July 12 "Initial Benchmark Assessment Report," "Prime
Minister Maliki intends to submit the revenue management law to the
 soon, for subsequent consideration by the [Iraqi
parliament] along with the framework hydrocarbon law."

As I write, the future of the "framework hydrocarbon law" (the oil
law) is very unclear. As U.S. pressure intensifies to pass the law
before September 2007, the deadline established by the Supplemental,
Iraqi resistance grows.

What must be done

On June 19, five Nobel Peace Prize recipients released a statement
publicly denouncing not only the Iraq oil law, but also the pressure
being applied by the U.S. Congress and the Bush adminstration on the
Iraqi government to pass it.

The laureates' statement, which has been circulated by Rep. Jim
McDermott, D-Wash., to every member of the U.S. Congress, declares
that "the U.S. government should leave the matter of how Iraq will
address the future of its oil system to the Iraqi people to be dealt
with at a time when they are free from occupation and more able to
engage in truly democratic decision making. It is immoral and illegal
to use war and invasion as mechanisms for robbing a people of their
vital natural resources." (You too can sign on to this statement. See
below for details).

The debate in the U.S. Congress has finally shifted from "whether" to
"how" to end the U.S. invasion of Iraq. But the devil may yet be in
the details. We must be vigilant and demand not only that the
occupation end, but as the details of withdrawal are worked out, that
the requirement that Iraqis change their oil system is taken off of
the table.

Reflecting the widespread opposition to the oil law among not only
Iraq's people in general, but Iraq's oil workers in particular, Faleh
Abood Umara, general secretary of the Iraqi Federation of Oil Unions,
explained, "We reject this kind of agreement absolutely. The law will
rob Iraq of its main resource -- its oil. It will undermine the
sovereignty of Iraq and our people."

For more information on the Iraq oil law and for activist steps you
can take, visit
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVdEAgFLA1MB and
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVZEAgFLA1MB

To sign the Nobel Laureate Statement, please send your name, country
of residence, and organizational affiliation (if any) to Kelek
Stevenson with Oil Change International at kkelekk@gmail.com. You can
also sign an online petition signed by several prominent Iraqi and
American activists at
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVlEAgFLA1MB

Antonia Juhasz, Tarbell Fellow, Oil Change International, is author of
The Bush Agenda: Invading the World, One Economy at a Time, now
available in paperback, updated with a new afterword.
http://thebushagenda.net/phplist/lt.php?id=bEVUBFRXVVhEAgFLA1MB

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