Recapping the War for Oil Program in Iraq

 

September 7, 2006 – The war in Iraq is on the brink of paying significant dividends, but not to the American taxpayers who will eventually have to pay the war bill, nor to our men and women in uniform who have fought and died in the war thus far, certainly not to the Iraqi people, and in no way, shape or form is the war on the verge of paying dividends to the farcical theory of thwarting terrorists over there so that we don’t have to fight them over here.  No, the everyday people of the United States and Iraq are nowhere near the day when they will recognize the war in Iraq as worth it.  Unfortunately, that day may never come.

 

However, the war in Iraq is about to pay dividends to a select few by rewarding the ultimate prize – the privatization of Iraqi oil – to the big oil conglomeration and its financiers, along with the ruling elitists that will eventually, but ultimately, receive their slice of the loot for facilitating the political environment from which the Bush Administration launched the event – a preemptive strike, without just cause, against an oil-rich country that posed no real threat to the United States. 

 

There is no shortage of identifiable accomplices in the Operation Iraqi Liberation (OIL) scheme – an assertion sustained by the shear brazenness of the impetuous war planners who initially tagged the military operations in Iraq with an acronym that they just had to have known would be received as ill-advised if not, inflammatory.  The media and the public, particularly those who were not sold on the necessity of the invasion of Iraq, quickly took issue with O.I.L., and the White House changed the name of its military action in Iraq to Operation Iraqi Freedom (OIF).  However, and without dispute, gaining control of Iraqi oil was always part of the U.S. strategic war plan in Iraq, although the Bush Administration has always distances itself from the war for oil assertion in favor of the war on terror association.

 

Which brings us to another point.  With another election cycle upon us, bands of neo-conservatives are now busily buzzing around the country blasting their bogus claims that the war in Iraq is ground zero in the war on terror.  For this reason, it is of the utmost importance that voters let the muddied, media waters settle after they hear or read this type of neo con propaganda so that they can think clearly before casting their votes in the upcoming November 2006 election.  To be deceived by the mud, is to become entrapped in the muck meant to prevent the Democrats from gaining control of the House or Senate, and subsequently, subpoena power.  If Bush-Cheney fears anything, it is the Democrats gaining subpoena power. Such power in the hands of the Democrats would threaten to shine light onto much of what this Administration prefers to be kept in the dark.  It would put the Administration in check and restore a much-needed measure of accountability for the Executive Branch.

 

It is important to remember that when Bill Clinton was President, the Republican-controlled House of Representatives used its subpoena power extensively.  It was this power that enabled Republicans to conduct impeachment and censure hearings in response to the Monica Lewinsky scandal.  Just imagine the number of public committee hearings that would have transpired over the last six years if Bush-Cheney had been Democrats!  Given the very likelihood that a Democratic Party controlled Congress would indeed pursue an impeachment hearing against President Bush, it shouldn’t come as a surprise to anyone that the neo con talking points today have become so desperate and dull.  

 

To counter the neo con propaganda machine along with its despicable, yet predictable fear mongering tactics, it is prudent to stick to the pre-invasion facts concerning the war in Iraq.  Armed with the facts, the American people should begin to seek justice, rather than the false sense of security the neo con is selling.  Voters need to remember that there is no greater illusion than fear, for whoever can see through all fear will always be safe.[1]  To vote based on fear is to live a lie.  And to continue to allow this Administration to operate above the law; to allow its members to escape the justice articulated in United States Code Title 18 - Part I - Chapter 47 § 1001[2], which clearly states that whoever, in any matter within the executive, legislative, or judicial branch of Government of the United States, knowingly and willfully - (1) Falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) Makes any materially false, fictitious, or fraudulent statement or representation; or (3) Makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both -  is to advance the further decay of the Rule of Law in the United States by accepting that government officials should be granted more leeway under the law than the citizenry. 

 

If the neo con loses its control of the subpoena power, it is exactly this type of legal standing and scrutiny that Bush-Cheney will be facing in a Democratic Party controlled U.S. Congress, particularly in regard to the manipulation of the pre-war intelligence that was used to sell the Congress on voting in favor of the Iraq invasion.  And what we now know about the pre-war intelligence clearly demonstrates that virtually every assertion the Bush Administration made regarding Iraq was false – not because of intelligence failures – but because the Bush Administration had every intention of invading Iraq with or without just cause.  The war was planned well before the sales pitch to sell the war was selected. 

 

So what are the facts?  According to investigative reporter, Greg Palast, in February 2001, one month after the first Bush-Cheney inauguration, the White House convened a closed committee under the direction of the State Department's Pam Quanrud.  The purpose of the secret committee was to plan the invasion of Iraq, the removal of Saddem Hussein, and the selection of a new, U.S. installed, Iraqi government kingpin.  Falah Aljibury, a U.S. oil industry advisor born in Iraq, reported to the BBC that the secret group included banking and chemical industry men, and the range of topics over what to do with a post-conquest Iraq was wide.  According to Palast, Aljibury said of the committee, “In short order, it became an oil group.”[3]

 

In March 2001, Vice President Dick Cheney met with oil company executives in what has been described as the Cheney Energy Task Force.  Cheney has refused to reveal who attended the Energy Task Force meetings or who provided energy policy recommendations to the task force.  The White House has continued its refusal to release the names of the task force members and contributors. Lawsuits by Judicial Watch and the Sierra Club were unsuccessful at obtaining the records related to the task force players.  The courts have maintained that in the case of the Cheney Energy Task Force, the president and vice-president have a constitutional right to obtain information in confidentiality.  However, Judicial Watch was able to obtain through the Freedom of Information Act process, maps of Iraqi oil fields as well as documents that list foreign suitors for Iraqi oilfield contracts, both of which were elements of the Cheney Energy Task Force meetings.[4] 

 

When the Senate Energy and Commerce committees held joint hearings in November 2005 with top oil industry chief executives from Exxon Mobil, Chevron Corporation, ConocoPhillips, Shell Oil, and BP America, the chief executives from Exxon Mobil, Chevron, and ConocoPhillips, when asked by the Senate committee, all denied that their firms participated in the 2001 task force.  The president of Shell Oil said that his company did not participate “to my knowledge”, and the chief executive of BP said he did not know.[5]  However, the Washington Post reported in 2005 that it obtained a document that showed that officials from Exxon Mobil, Conoco (before it merged with Phillips) Shell, and BP America all met in the White House complex with Cheney aides who were tasked with developing a national energy policy as part of the 2001 Cheney Energy Task Force.

 

What the Washington Post has failed to report is the connection between the participants of the Cheney Energy Task Force and the documents obtained by Judicial Watch that clearly demonstrate that a significant part of the task force meetings centered on how the U.S. was going to distribute the spoils of war after it invaded Iraq.  Remember, the big oil companies were meeting with Cheney and / or his staff in March 2001 and pouring over maps of Iraqi oilfields and known reserves while considering the list of potential suitors to award, at humongous profit margins, the rights to specific Iraqi oil opportunities, two years before the U.S. launched its invasion of Iraq.  This connection is substantiated by the Suitors for Iraqi Oilfield Contracts document obtained by Judicial Watch.  This document is dated March 5, 2001. 

 

If invading Iraq was not a predetermined objective and operation that had little to do with mobile biological weapons laboratories, decontamination vehicles, illegal rockets and launchers, 2,245 gallons of Anthrax, 4 tons of VX nerve gas, aluminum tubes, and documents that “proved”, as Bush put it, that Iraq was attempting to purchase tons of uranium oxide, yellow cake, from Niger – all reasons used to gain international, congressional, and public support for the Iraq invasion – all of which have since proved to be absolutely false – then why was Bush-Cheney considering potential suitors for Iraq’s oilfields two years prior to launching its invasion of Iraq?  And why was Cheney lording over maps of Iraqi oilfields and reserves while consulting with oil company executives over how the oil should be divided? 

 

This information is not circumstantial, nor is it out of context or hearsay.  It is hard evidence that warrants a full Congressional investigation.  Yet the Republicans dismiss it all as intelligence failures, as the Department of Justice looks the other way.  This is corruption and criminal, if not treasonous, at the highest levels of our government – and nobody is going to do anything about it because of partisan politics?  Americans need to wake up to the fact that regardless of political party affiliation – nobody in this country is ever to be above the law.  Nobody!  If we the people let this crime go unpunished, we will be establishing a legal precedent that we will surely regret in the near future, and for decades to come.

 

The only way to reign in the Bush Administration; and I regret to say this because I am a staunch Libertarian that in the past has voted for Libertarian candidates first, and then by default, Republicans, is to vote Democrats into the U.S. Congress come November.  For example, I live in the 1^st Congressional District of South Carolina.  The incumbent, Republican Henry Brown, has proven to be nothing more than a Bush rubberstamp.  Representative Brown is being challenged by a Democrat – Randy Maatta.  Because there isn’t a Libertarian candidate, I plan to vote for Maatta from the  “Anybody but Brown” perspective.  In my opinion, I’d rather fight the Democrats’ brand of socialism than the Republicans’ brand of totalitarian neo-conservatism.  How did the real Republicans ever allow socialism to look so good?

 

There is much more to this story.  When reviewing the Foreign Suitors for Iraqi Oilfield Contracts document that was obtained from the 2001 Cheney Energy Task Force, you’ll discover a list of countries, the names of the oil companies from those countries, specific Iraqi oilfields and known untapped reserves, and area exploration blocks that Bush-Cheney had identified with potential suitors for the spoils of war.  You’ll also discover status of negotiations, such as collecting date, discussions, or PSC.  The PSC is of significant importance because it represents something terrible for the Iraqi people and is certain to require a permanent U.S. military presence in Iraq to enforce.  PSC is an acronym for Production Sharing Contract.  Within the oil industry, these contracts are often referred to as Production Sharing Agreements (PSA’s). 

 

In 2005, an independent study was conducted to determine whether the movement to privatize Iraq’s oil industry through the use of Production Sharing Agreements would be mutually beneficial to the oil companies and the Iraqi people, or whether the Iraqis were on the verge of giving away hundreds of billions of dollars in exchange for its short term financial needs to be met.  The report title, Crude Designs – The Rip-Off of Iraq’s Oil Wealth[6], summarizes the report’s findings completely.  What follows are the key points from the Executive Summary of this report.

 

While the Iraqi people struggle to define their future amid political chaos and violence, the fate of their most valuable asset, oil, is being decided behind closed doors.

 

The oil policy with origins in the U.S. State Department is on course to be adopted in Iraq, with no public debate and at an enormous potential cost to the Iraqi people.  The policy allocates the majority of Iraq’s oilfields – accounting for at least 64% of the country’s oil reserves – for development by multinational companies.

 

Iraqi public opinion is strongly opposed to the handing control over oil development to foreign companies. 

 

Muckraker Report note: This could be the real, unreported reason for the continuing violence in Iraq.  What the Bush Administration claims is an insurgency and terrorism might actually be a proud people fighting for the life of their nation’s natural resources, much in the same way Americans would be fighting an occupying country that was trying to sell off our oil resources. 

 

But with the active involvement of the US and British governments a group of powerful Iraqi politicians and technocrats is pushing for a system of long term contracts with foreign oil companies which will be beyond the reach of the Iraqi courts, public scrutiny or democratic control. 

 

Economic projections published within this report show that the model of oil development that is being proposed will cost Iraq hundreds of billions of dollars in lost revenue, while providing foreign oil companies with enormous profits. 

 

The development model being promoted in Iraq, and supported by key figures in the Oil Ministry, is based on contracts known as production sharing agreements (PSA’s), which have existed in the oil industry since the late 1960s. Oil experts agree that their purpose is largely political: technically they keep legal ownership of oil reserves in state hands, while practically delivering oil companies the same results as the concession agreements they replaced.

 

PSA's are effectively immune from public scrutiny and lock governments into economic terms that cannot be altered for decades.

 

In Iraq’s case, these contracts could be signed while the government is new and weak, the security situation dire, and the country still under military occupation. As such the terms are likely to be highly unfavorable, but could persist for up to 40 years.

 

Furthermore, PSA’s generally exempt foreign oil companies from any new laws that might affect their profits. And the contracts often stipulate that disputes are heard not in the country’s own courts but in international investment tribunals, which make their decisions on commercial grounds and do not consider the national interest or other national laws. Iraq could be surrendering its democracy as soon as it achieves it.

 

Production sharing agreements have been heavily promoted by oil companies and by the US Administration.

 

The use of PSA’s in Iraq was proposed by the Future of Iraq project, the US State Department’s planning mechanism, prior to the 2003 invasion. These proposals were subsequently developed by the Coalition Provisional Authority, by the Iraq Interim Government and by the current Transitional Government. The Iraqi Constitution also opens the door to foreign companies, albeit in legally vague terms.

 

The Constitution also suggests a decentralization of authority over oil contracts, from the national level to Iraq’s regions. If implemented, the regions would have weaker bargaining power than a national government, leading to poorer terms for Iraq in any deal with oil companies.

 

In order to make their case, oil companies and their supporters argue that PSA’s are standard practice in the oil industry and that Iraq has no other option to finance oil development. Neither of these assertions is true.

 

None of the top oil producers in the Middle East uses PSA’s. Some governments that have signed them regret doing so. In Russia, where political upheaval was followed by rapid opening up to the private sector in the 1990s, PSA’s have cost the state billions of dollars, making it unlikely that any more will be signed. The parallel with Iraq's current transition is obvious.

 

PSA’s represent a radical redesign of Iraq's oil industry, wrenching it from public into private hands. The strategic drivers for this are the US/UK push for “energy security” in a constrained market and the multinational oil companies’ need to “book” new reserves to secure future growth.

 

Despite their disadvantages to the Iraqi economy and democracy, they are being introduced in Iraq without public debate.

 

On August 24, 2006, Reuters released an article titled Oil majors maneuver for prime position in Iraq[7].  In this article Reuters reported that the world’s top oil companies are maneuvering intently to win a stake in their oilfield of choice when Iraq finally opens to multibillion-dollar investment.  The Iraqi Oil Minister has signaled the race for oilfield deals could start this autumn.  The article went on to explain that the Iraqi officials are fully aware of the desires of the majors - Shell, Exxon Mobil, BP, and Chevron among them – for Iraq’s cheap and easy-to-produce oil. 

 

It is important to recognize that the Iraqi politicians on the verge of giving away much of Iraq’s future to the major U.S. oil companies are in their positions of power because the Bush Administration put them there. 

 

In 1999, while CEO of oil services company Halliburton, Dick Cheney, in a speech to the Institute of Petroleum in London said, “By 2010 we will need on the order of an additional fifty million barrels a day.  So where is the oil going to come from?  While many regions of the world offer great oil opportunities, the Middle East with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.”[8]

 

Once these PSA’s are signed in the next three months, the U.S. will begin turning over military and policing powers to the Iraqis, regardless of whether the Iraqis are ready or not.  The U.S. troops that will remain in Iraq, between ten and forty thousand troops, will remain for decades to protect the oil interests, although the U.S. government will say that the permanent U.S. military presence is there to assist the Iraqi government in emergency situations only. 

 

Again, the war on terror in Iraq will be won in the next few months once the Production Sharing Agreements or Production Sharing Contracts have been signed.  After the contracts have been signed, American troops will begin to come home.  There will remain – for decades – a permanent U.S. military force in Iraq.   The primary, but unpublished purpose of this force will be to protect the financial interests of the major U.S. oil companies.  Once the general public in Iraq realized what has happened to its oil, it will require a small army to protect the oilrigs and pipelines belonging to U.S. companies and their interests.  The anticipated violence, for decades to come, will continue to be reported by the U.S. media as the result of radical Islamic extremism and terrorism.