centerpiece of the Iraq Study Group's report is its advocacy for
securing foreign companies' long-term access to Iraqi oil fields.
By Antonia Juhasz
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."
December 8, 2006, Los Angeles Times
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.
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.
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
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.
This is an echo of calls made before and immediately after the invasion of Iraq.
U.S. State Department's Oil and Energy Working Group, meeting between
December 2002 and April 2003, also said that Iraq "should be opened to
international oil companies as quickly as possible after the war." Its
preferred method of privatization was a form of oil contract called a
production-sharing agreement. These agreements are preferred by the oil
industry but rejected by all the top oil producers in the Middle East
because they grant greater control and more profits to the companies
than the governments. The Heritage Foundation also released a report in
March 2003 calling for the full privatization of Iraq's oil
sector. One representative of the foundation, Edwin Meese III, is a
member of the Iraq Study Group. Another, James J. Carafano, assisted in
the study group's work.
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
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."
last step is already underway. The Bush administration hired the
consultancy firm BearingPoint more than a year ago to advise the Iraqi
Oil Ministry on drafting and passing a new national oil law.
for this new law were first made public at a news conference in late
2004 in Washington. Flanked by State Department officials, Iraqi
Finance Minister Adel Abdul Mahdi (who is now vice president) explained
how this law would open Iraq's oil industry to private foreign
investment. This, in turn, would be "very promising to the American
investors and to American enterprise, certainly to oil companies." The
law would implement production-sharing agreements.
Much to the deep frustration of the U.S. government and American oil companies, that law has still not been passed.
July, U.S. Energy Secretary Samuel Bodman announced in Baghdad that oil
executives told him that their companies would not enter Iraq without
passage of the new oil law. Petroleum Economist magazine later
reported that U.S. oil companies considered passage of the new oil law
more important than increased security when deciding whether to go into
business in Iraq.
The Iraq Study Group report states
that continuing military, political and economic support is contingent
upon Iraq's government meeting certain undefined "milestones." It's
apparent that these milestones are embedded in the report itself.
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. Finally, the report unequivocally declares that the 79
total recommendations "are comprehensive and need to be implemented in
a coordinated fashion. They should not be separated or carried out in
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.
We can thank the Iraq Study
Group for making its case publicly. It is now our turn to decide if we
wish to spill more blood for oil.