Realities of the Iraqi Oil Law

Earlier this year, under pressure from a hostile public and a Democratically led congress, the administration had finally succumbed to at least reporting on benchmarks. Of the benchmarks, perhaps the most touted and important one according to the White House was the passage of what is commonly known as the Iraqi Oil Law.

It was this benchmark that was intended to foster foreign investments, national unity, and revenue distribution, and it was one of the few benchmarks that the administration blatantly made it clear had not satisfactorily progressed.

I had not ever personally gotten particularly involved in the intricacies of the Oil Bill… or even the generalities. But thanks to Tracey Caldwell of, I was given an opportunity to jump into the specifics of the law feet first.

It was through a conference call with policy analyst and activist Antonia Juhasz, author of the book The Bush Agenda: Invading the World One Economy At A Time.

Being manically punctual as I am, I called in a couple minutes early to largely silence, getting my notebook together, and listening to someone apparently rustling papers. “Ding” someone else had arrived, and announced himself as “Jack”. Just Jack.

Jack and I talked back and forth and welcomed others as they called in, making sure people knew that they hadn’t called a dead line. The primary topic in these early minutes seemed to be how to pronounce Antonia’s name. “It’s a mouthful,” Jack joked in his aged and gravelly voice.

Then there was another “Ding,” followed by a down to earth voice saying, “Antonia Juhasz”. It’s pronounced, for those of you wondering, “You-Haws”.

After a massive influx of “dings” and the arrival of the moderator, we were able to get started… Well, after we were all told to mute ourselves first, which in and of itself proved to be rather funny. But that’s besides the point.

We eventually settled down and got to business.

According to Ms. Juhasz, the Iraqi Oil Law is, “A law that originated most distinctly in the US State Department… The Bush administration US State Department and the Iraq Study Group.” The primary function of this legislation drafted not by Iraqis but by the brain trust of the Bush Administration was to transform the “oil system from a national system to a privatized system.”

How exactly was this supposed to happen? The results of the work of the State Department and the ISG was to develop a packet of laws commonly referred to as the “Iraq Oil Law,” or “Iraq Hydrocarbon Law”, that would open “at least two thirds of Iraq’s oil fields for foreign investors.”

This would give foreign oil companies ownership and control over Iraqi oil for up to thirty years in one go.

So when President Bush touted this law in an address on January as a means to for Iraqi’s to attain, “Foreign investment, unity and revenue sharing,” what he really meant was Foreign raiding of the second largest oil reserves in the world, a complete lack of unity, and yes, revenue sharing… “after foreign oil companies take their cut,” Juhasz said.

That’s not to say that this bill hasn’t weathered high resistence. In Iraq, resistence the bill is apparent, and here at home, just yesterday a bill passed through the House by a wide margin that would prevent the US from exerting any influence over how Iraqi’s legislate their own oil.

While this is a good sign, according to Juhasz, she expressed some concern that the bill still has only a fifty-fifty chance of making it to the books as it still has to go through the Senate.

But during the call, Juhasz wanted to stress two things above all else. The first is that “The Passage of the law is a tool of the Bush Administration to win the war for oil.” This way to win this particular war being to have Iraqi’s turnover control of their oil to US companies.

The second major point that Juhasz wanted to make was that it was viatl that we “Take it off the table. Turn these benchmarks on their head and send a clear message that oil is off the table.”

Indeed, this echoes a sentiment I expressed some time ago. In making alternative arguments for taking steps to curb the phenomena of climate change, I proposed that looking for alternative energies would have the beneficial side effect of reducing our dependence on foreign oil and therefore strengthening our diplomatic hand in the Middle East.

But as Juhasz reminded us, this is the exact opposite of what Bush wants. In fact, she even relayed to us a report she had seen on ABC News from reporter Brian Ross. In it he stated that an unidentified intelligence agency has projected that if US companies were to stay in Iraq, there would have to be a permanent military presence, thus mirroring the professed “Korean model,” that Bush has been trying to sell the public lately.

At this point, the moderator opened the conference call up for questioning, and out of these questions came several very useful nuggets of information.

While most of us listening in were there to represent either an independent news source or an activist organization, my new buddy Jack was there for himself. He had declared himself a retired marine and a veteran of World War II that expressed a very deep concern for where America was heading. But in regards to the oil law his number one concern was that the “Sunnis don’t get screwed by the Shiites” in regards to the revenue distribution.

As Juhasz pointed then pointed out, “the draft of the revenue bill does not provide for equal distribution.” She then further went on to explain that the Iraqis themselves have expressed, “Now is not the time of debate on how to transform its most important resource” during a time when the country was being ravaged and fighting a civil war.

In fact, we soon learned, the effect of the Iraqi bill was that instead of providing unity, it was “creating tension among Iraqi factions” over who to allow in, and who will find contracts. The Final result, if the law passed, therefore, would be not less instability, but more.

But, as one questioner pointed out, playing devils advocate, there seems to be a conventional wisdom in this country that Iraq needs US Oil companies. This was technically true, Juhasz explained. But this was for technical expertise, but the right answer was not to hand over Iraqi Oil fields to the likes of Chevron or Exxon for thirty plus years, but instead to hire these companies as technical experts for a few years at a time. By hiring oil companies as technical experts, the Iraqi government can provide a means of employment and profit for Iraqis, whereas the oil bill as Bush has it mapped out, would allow oil companies to usurp the oil fields with no responsibilities to the Iraqi people whatsoever.

All in all, it was an enlightening hour. By no means was it definitive, I still have questions (I… um… couldn’t figure how to.. uh… unmute my phone so… yeah), and you can expect that I will follow up on some of those questions in the very near future. Otherwise, I agree with Juhasz very much in this regard: If this bill is, as she explains, constructed to benefit US oil companies and not the Iraqi people, then this is definitely not the right path to pursue in our attempts to help the country we broke.

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