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The long game.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

--Maj. Gen. Smedley Butler, USMC, War is a Racket (1935)

If it hasn't already done so, the Iraqi parliament is soon expected to pass a new law, variously called "the oil law," "the hydrocarbon law," and even the "draft hydrocarbon law" since it seems almost no one has been given access to the final version approved by the Iraqi Oil Committee (headed by Deputy Prime Minister Barham Salih) and sent to the cabinet. The limited coverage of this issue by major U.S. media outlets has generally portrayed the oil law as a good and necessary advance for the people of a wartorn country.

The law appears designed to reinvigorate the dilapidated oil industry in a country that, despite its vast oil wealth, has been punished by wars and sanctions for decades. I say "appears" because, while the law is designed to spur Iraq's oil production, there are other purposes for which it is designed: namely, to enrich multinational oil companies to new and lofty heights and, more importantly, to secure Middle Eastern oil deposits for U.S. interests and against those of competing world powers. Twenty years of "realist" foreign policy, which has overseen the deaths of millions and includes the current mayhem, has finally provided Western interests the rationale for taking control of Iraqi oil fields for the first time since 1972. This is what is known as "the long game."

The legislation was drafted with the encouragement and assistance of the White House and its surrogates. One of those surrogates was U.S. consulting firm Bearing Point Inc., which was contracted by the administration of George W. Bush over a year ago to aid the Iraq Oil Ministry--the one ministry that U.S. forces did guard during the looting that ensued after the fall of Baghdad. The Independent newspaper obtained a copy of a draft of the oil law circulated to oil companies in July 2006 and reported on its details on January 7, 2007.

The law as detailed in that draft is highly unusual for the Middle East, where other countries outlaw granting foreign companies direct interest in oil production. Under this draft hydrocarbon law, major Western oil companies would be granted Production Sharing Agreements (PSAs) for up to thirty years and, in at least the first few years, would reap up to 75 percent of the profits from both developed and undeveloped oil fields. Key to these PSAs is that they would be "locked in" regardless of the government in power.

To underscore the magnitude of potential profits under such agreements, only seventeen of eighty potential oil fields in Iraq have ever been touched and it is estimated that pumping light sweet crude out of Iraq's oil fields could cost as little as one dollar per barrel. Up to three million barrels per day is the expected output and, at $50/bbl, this amounts to a profit potential of $100 million per day for participating oil companies.

On January 24 Reuters reported that Iraqi officials were under pressure to finalize the oil law for eventual passage by the parliament. There was scant mention anywhere of the status of the previously reported PSAs, however according to Antonia Juhasz, a visiting scholar at the Institute for Policy Studies, the PSAs had apparently been removed from the draft law. Juhasz, in an article posted on, wrote that the law was instead "vague as to what form of contract foreign oil companies will be able to sign in Iraq."

It seems the details of this law, which will impact the people of Iraq to a degree that cannot be overstated, are being hidden from the most important stakeholders.

"Three outside groups have had far more opportunity to scrutinize this legislation than most Iraqis," claimed Greg Muttitt of Platform, a human rights and environmental group that monitors the oil industry. Muttitt was quoted in the January 7 Independent story, further commenting: "The draft went to the U.S. government and major oil companies in July and to the International Monetary Fund in September. Last month I met a group of twenty members of the Iraqi Parliament in Jordan and I asked them how many had seen the legislation. Only one had."

U.S. senators appeared to be just as sheltered. Testifying before the Senate Foreign Relations Committee on January 11 regarding the proposed troop "surge" Secretary of State Condoleezza Rice was questioned about the law.

"You referred to the oil law as a remarkable law," Senator John Sununu (R-NH) told Rice. "Well, it's the most remarkable law that no one has ever really seen."

Regardless of the shape these contracts take once they are ultimately seen, there will no doubt be plenty of interested oil companies. And no one expects these companies to resuscitate the Iraqi oil industry for free. But the profit margin set out in the July draft is unconscionable and we can only assume which interested party suggested such a lopsided deal. To award foreign oil companies most of the oil profits at a time when the people of Iraq would need it most could rightly be described as sociopathic plutocracy.

Of course no foreign oil investment can be realized given the current state of violence in Iraq. It is from this perspective that we must consider why there are no plans, nor have there ever been, for a withdrawal of U.S. troops any time soon.

The Bush administration offered myriad reasons for attacking Iraq before the invasion. All have proved illusory. These pre-invasion justifications had one thing in common, however: they all encouraged immediate military action. Weapons of mass destruction, ties to 9/11, ties to al-Qaida, yellow cake. (Oh, the terrible yellow cake!) Mushroom clouds loomed on our horizon. Compared to these threats, a program of "spreading democracy" would hardly have seemed imperative. But when all of the reasons for invasion proved fallacious, White House rhetoric veered onto the ex post facto yet primrose path of freedom and democracy. If the shifting sands of justification demonstrated one thing it was that none of the reasons proffered bore any resemblance to the actual reasons for the invasion of Iraq.

While many people raised the issue of oil both before and after the invasion, administration officials insisted and continue to insist that the industrialized world's most important resource was of no interest to this White House, a White House piled high with former oil industry executives. Though then-Secretary of State Colin Powell explicitly said in July 2003: "We did not do it for oil," the draft oil law casts a very long, very dark shadow across those words.

Despite the common refrain that errors in "intelligence" resulted in the invasion of Iraq, the invasion was no mistake. "Mistake" implies some level of accident or inadvertence, something that might have been avoided if only other things were known. But it's becoming increasingly obvious that the invasion of Iraq was an orchestrated, deliberate action and merely the last of many policy prescriptions that have been exacted upon that country for the last twenty-five years.

Since the fall of the Shah in the Iranian revolution, U.S. foreign policy has remained absolutely consistent vis-a-vis Iraq and Iran. In its agitating for and illegally supplying arms to both sides during the Iran-Iraq war, in its destruction of military and civilian infrastructure and criminal rout of the Iraqi army in the first Gulf War, and in its imposition of draconian, deadly sanctions on Iraq throughout the nineties, U.S. policy has had one clear purpose: reassert control of Middle Eastern oil supplies. And it isn't by accident that, having taken out Saddam Hussein, the Iranian regime is next in the crosshairs.

As mentioned earlier, the extant violence in Iraq is the real impediment to immediate action in the oil fields, hence the desperation on the part of the White House to try anything they can to calm the situation and make it comfortable for Western oil interests, which have stated that they are unlikely to invest "until the violence in Iraq abates." Whether troop escalation will deliver this need remains to be seen but what is clear is that withdrawal is not and never has been an option, for that would leave oil and strategic interests high and dry. The midterm elections suggested that the highly ridiculed stay-the-course policy was finally meeting wide disapproval. The so-called surge was really the only option Bush had that would make it look like he was changing policy when, in effect, he isn't changing policy at all. And Bush has stated quite clearly that troops won't be withdrawn while he is in office. This is perhaps the most believable statement he has ever made.

The U.S. troops' eventual role will likely be to garrison existing and future oil infrastructure, much as they served the Oil Ministry during the looting of Baghdad. This also explains the presence of fourteen permanent U.S. military bases--some close to oil fields--scattered throughout Iraq, their construction occurring almost immediately after the post-invasion dust had settled. Garrison outposts guarding valuable assets in a hostile foreign land. Now what does that sound like?

The history of civilization is practically equivalent to the history of empires, which itself is a vast chronicle of crimes against humanity. Until recently, empires were very honest about their imperial designs. Since the United States became the world's preeminent military and economic power, however, honesty about the imperial prerogative has been subjugated by the rhetoric of humanitarianism. Yes, Americans have strong ideals of freedom, democracy, and human rights and much of the public believes this nation should be the beacon of these values, here and everywhere. Sadly, this hasn't been the case and, furthermore, far too many Americans remain blithely unaware of just what has been exacted in our name.

Despite lofty talk of freedom and democracy, the true nature of the Iraq war may very well lie in the Iraqi oil law and certainly was revealed in the July draft, written by oilmen (or friends of oilmen) for oilmen (or friends of oilmen), with little regard for the needs of Iraq and its people. U.S. foreign policy has exacted a tremendous human toll around the world. Most certainly this is true in Iraq. Perhaps this is the single biggest reason why we must now be told that this is a dangerous world.

It's time for a serious reevaluation of the way we comport ourselves on this small globe, which grows smaller each day. Just as it has been for empires of the past, our government's reckless behavior, beholden as it is to power and profit, is a doomed paradigm. We must engage people in the world in a truly humanitarian way, with equanimity and honesty. I think we would discover then just how many of those "enemies" might disappear. So long has our brutal and careless hegemony been dominant--my only fear is that any behavioral change might be entirely too late.

Iraqi deaths in 2006


U.S. deaths since 2003


Cost to U.S. taxpayers


Western oil profits?


Kenneth Anderson is a scientist living in Baltimore whose political, social, and media commentary appears in various online forums, including Op-Ed News and his daily blog at
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Author:Anderson, Kenneth
Publication:The Humanist
Article Type:Cover story
Date:Mar 1, 2007
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