Blood For Oil?

I've never liked the argument that Bush and Cheney went to Iraq for the oil profits. But stories like this make me look pretty naive:

Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.

. . . The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil. They point to statements such as one from Vice-President Dick Cheney, who said in 1999, while he was still chief executive of the oil services company Halliburton, that the world would need an additional 50 million barrels of oil a day by 2010. "So where is the oil going to come from?... The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies," he said.

Oil industry executives and analysts say the law, which would permit Western companies to pocket up to three-quarters of profits in the early years, is the only way to get Iraq's oil industry back on its feet after years of sanctions, war and loss of expertise. . . .

Meanwhile, as David Kurtz points out, if you do not play ball, the US works against oil exploration:

in Iran, "a new U.S. campaign to dry up financing for oil and natural gas development poses a threat to the republic's ability to continue exporting oil over the next two decades," reports the LA Times

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    Is was mainly oil, alright, among other reasons (5.00 / 1) (#2)
    by Edger on Sun Jan 07, 2007 at 12:33:51 PM EST
    October 2006 - Global Policy Forum
    Will Iraq Repeat Russia's Oil Mistakes?
    Iraqi oil Minister Hussein Shahristani announced last week that he aimed to sign oil production contracts with foreign companies by the end of next year. Notably, the announcement was made in Australia - like most of the significant statements of Iraqi oil policy, it was made to non-Iraqi ears.

    The same was true of the confirmation last month of the form of such contracts. Speaking to the conference of the International Compact for Iraq, a meeting of international donors in Abu Dhabi, Deputy Prime Minister Barham Salih, who heads the committee drafting a new oil law, announced that production sharing agreements (PSA) would be used - the type of contract favoured by the companies themselves.

    Putting Mr Salih's comments into context, the US government representative to those talks threatened that any future economic assistance to Iraq would be conditional on economic reforms - the priority among which was the passing of an acceptable oil law.
    During the drafting of the oil law over the last five months, three consultations have taken place - none of them with Iraqis. The US government and the multinational oil companies were presented the draft law for their comments in July. Last month, the International Monetary Fund joined this list, examining the draft oil law in its quarterly review of the Iraqi government's compliance with its economic conditions.

    But the Iraqi people have not been consulted, nor even has the Iraqi parliament. Indeed, Iraqi civil society groups and parliamentarians who have asked to see the draft have been told that it does not exist. Instead it will be presented to the parliament in December, to be pushed through (the government intends) as a fait accompli.

    Russia realised the mistakes it made by signing PSA contracts only when it was too late. It remains to be seen whether Iraq follows the same course.

    Thursday, December 14, 2006
    Iraqi trade unions attack plans for foreign company control of oil
    At a meeting in Amman, Jordan, leaders of Iraq's five trade union federations - between them representing hundreds of thousands of workers - called for a fundamental rethink of the forthcoming oil law, which is designed to allow foreign investment in the oil sector.

    more details...

    Council on Foreign Relations
    Iraq and Oil: Revenue-Sharing Among Regions
    According to a recent study by the Global Policy Forum, sixty out of Iraq's eighty known oil fields may be explored under PSAs, handing at least 64 percent of Iraq's known oil reserves over to foreign investors.



    "Control is what it's all about," one oilman told me. "It's not about getting the oil, it's about controlling oil's price."

    Well, Iraq's known (5.00 / 1) (#3)
    by Che's Lounge on Sun Jan 07, 2007 at 12:41:53 PM EST
    reserves are about 110 billion barrels. Iraq's estimated reserves go as high as 300 billion barrels. Saudi Arabia has about 260 billion barrels. And only 10% has even been drilled into, much less extracted.

    Also, the oil is light, sweet crude that is close to the surface. Not like the tarry s**t from Iran, which is why Iran actually sends much of its oil out to be refined. That is also why they, ironically, have to ration gas. That is about the only thing that keeps Iran from sending missles into the SA refineries, which they will surely do if Israel nukes their enrichment facilities.

    Nice to see people finally catching on.

    Iran may not even (5.00 / 1) (#4)
    by Edger on Sun Jan 07, 2007 at 12:49:04 PM EST
    have to use missiles, Che. I wouldn't be surprised if they have remote controlled mines planted under the pipelines out in the middle of the Saudi desert.

    Actually (5.00 / 3) (#5)
    by scarshapedstar on Sun Jan 07, 2007 at 12:55:10 PM EST
    It wasn't just about the oil profits. It was about every corporation on earth's profits. Iraq was to become the ultimate globalized playground. Bremer and co. were bragging about how one 7-Eleven would force 30 Iraqi stores out of business and "a single Wal-Mart would take over the country." There would be a McDonald's on every corner and a GM factory. And the Iraqi constitution set corporate taxes at a flat 10% and allowed foreign ownership of all the country's assets save the oil fields. In short, it was the economic "shock and awe" that Milton Friedman said would open the window of opportunity for the Invisible Hand of corporate domination to create a utopia.

    It was supposed to be the ultimate feeding trough for Republican campaign contributors. Iraq was the true foundation for the much-ballyhooed "permanent Republican majority." Unfortunately, and I can't imagine why, Sistani and Sadr didn't want the country being used in such a fashion.

    This will eventually redound to the benefit... (5.00 / 2) (#10)
    by Bill Arnett on Sun Jan 07, 2007 at 01:14:46 PM EST
    ...of the Communist Chinese, who must be laughing themselves sick with the pleasure of loaning us billions and billions and billions of dollars to finance our military misadventure into Iraq and, probably sooner rather than later, Iran, in attempt to forever lock up their oil supplies.

    bush and cheney both have, very recently, proclaimed that we cannot let Iraq's oil and oil revenue fall into the hands of "terrorists", so this should come as no surprise at all.

    Meantime, and I've said this many times here over the last few months, the Communist Chinese are quietly circling to globe purchasing oil contracts for PENNIES compared to the untold billions that we have BORROWED from them to spend in absolutely the least cost-effective manner possible to obtain oil: endless war and wars of aggression.

    The Chinese recognized long ago that eventually they would be competing with the West for oil, so what better way for them to guarantee cheap oil for themselves than by helping America go the way of the Soviet Union and bankrupt ourselves fighting to win oil we could have purchased much more cheaply. And without breaking our military, emptying our treasury, and becoming the biggest debtor nation on earth.

    As the world switches to a more stable currency than the dollar for making oil purchases, in this case the euro, we will not be able to compete on a global scale with the Chinese in pursuit of oil contracts for those reasons.

    The pain of adjusting to our reduced influence in the world and dealing with a greatly enhanced China competing for what oil remains will be an extremely dangerous time for America, as the Chinese, our bankers, can yank the world out from beneath us just by starting a worldwide run on the dollar and devaluing it so greatly as to reduce our purchasing power, cause runaway inflation, sky-high interest rates, and, in general, destroy our economy.

    So, yes, Iraq -and, again, maybe soon Iran - and this senseless war only makes any sense at all as a war for oil, not a battle in some nebulous war on terror, which is undefinable and therefore cannot be won by any objective measure.

    America's Oil War. Nice job, mr. boosh.

    Let's not forget (4.50 / 2) (#13)
    by scarshapedstar on Sun Jan 07, 2007 at 01:46:50 PM EST
    The "nice job" done by PPJ and the other 50 million bedwetters who decided the only response to 9/11 was to act like the guy in the horror movie who fires off 12 shots into the darkness and then stands there pulling the trigger on an empty chamber while the alien creeps up behind him and bites his head off.

    After all, to do otherwise would only appease the alien.


    LOL (3.00 / 2) (#21)
    by Wile ECoyote on Sun Jan 07, 2007 at 02:40:52 PM EST
    I knew it was PPJ's fault.  

    Well (4.66 / 3) (#24)
    by scarshapedstar on Sun Jan 07, 2007 at 02:53:55 PM EST
    He frequent claims to have three priorities: National Security, National Security, and National Security.

    Unfortunately, it seems that by this he means that he literally chants "national security, national security, national security" as some sort of magic spell, because he seems to have forgotten that empires are brought down very often by economic collapse and very rarely by a handful of religious fanatics.


    I'm evil..... (1.00 / 3) (#25)
    by jimakaPPJ on Sun Jan 07, 2007 at 02:56:37 PM EST
    Scar and et al... and the risk of bringing some reality into your whining and moaning.

    What would a real "war for oil" look like? Well, US troops would have sped to the oilfields with everything we had. Everything we had. Then, secure convoy routes would have been established to the nearest port - probably Basra - and the US Navy would essentially line the entire gulf with wall-to-wall warships in order to ensure the safe passage of US-flagged tankers into and out of the region.

    There would have been no overland campaign - what for? - and no fight for Baghdad. Fallujah and Mosul and all those other trouble spots would never even see an American boot. Why? No oil there. The US Military would do what it is extraordinarily well-trained to do: take and hold a very limited area, and supply secure convoys to and from this limited area on an ongoing basis. Saddam could have stayed if he wanted: probably would have saved us a lot of trouble, and the whole thing would have become a sort of super no-fly zone over the oil fields, ports and convoy routes, and the devil take the rest of it. Sadr City IED deaths? Please. What the f**k does Sadr City have that we need?

    That's what a war for oil would look like. It's entirely possible that such an operation could have been accomplished and maintained without a single American fatality.



    That's why Casey and Abizaid had the job (5.00 / 1) (#30)
    by Edger on Sun Jan 07, 2007 at 03:30:29 PM EST
    instead of  you:
    That's what a war for oil would look like. It's entirely possible that such an operation could have been accomplished and maintained without a single American fatality.
    Under your plan they would have been sitting ducks, and probably ALL dead by now.

    Hey scar! (1.00 / 4) (#26)
    by jimakaPPJ on Sun Jan 07, 2007 at 03:05:13 PM EST
    You keep calling people "bedwetters." Now, we know that you weren't in the military, and while I make no claim what so ever can you tell us a little bit about the super courageous things you have done?

    I mean, you know, give all those bedwetters some inspiration...


    scar has spoken truth to power.

    Wow. That's powerful. Gosh. What daring. Whoopee!

    Watch  him! He Might Go All The Way (and write a real tough comment.)

    Pardon me while I snicker at the thought of it.


    Uh (5.00 / 2) (#55)
    by scarshapedstar on Sun Jan 07, 2007 at 06:45:27 PM EST
    I was talking about the folks who said we had to lash out at somebody, anybody, out of fear. I don't think anyone seriously considers that a brave thing to do and yet it was embraced by a great many people as the only manly course of action.

    I opposed it. I don't really know what more needs to be said.


    A lot needs to be said. (1.00 / 2) (#58)
    by jimakaPPJ on Sun Jan 07, 2007 at 07:22:19 PM EST
    First of all you have no knowledge about my service. Yet you write an insult. I think that says alot about you.

    Secondlyt, I haven't seen, read or heard anyone say that we had to lash out:

    at somebody, anybody, out of fear

    I think you have badly misspoke yourself. Condemning without proof, painting those who you disagree with with a brush that you seem unqualified to hold.


    "If I reprehend any thing in this world, (5.00 / 1) (#63)
    by aw on Sun Jan 07, 2007 at 09:35:01 PM EST
    it is the use of my oracular tongue, and a nice derangement of epitaphs!"

    Really? (5.00 / 2) (#65)
    by scarshapedstar on Sun Jan 07, 2007 at 11:07:43 PM EST
    You've never heard the theory that we were attacked because we looked "weak" and the only way to save ourselves from an endless horde of suicide bombers was to bomb the sh*t out of somebody else? I seem to remember a time after 9/11 when this was considered acceptable dinner-table conservatism; the thoughtless-brutal-animal foreign policy. People felt free to say stuff like this:

    "Every ten years or so, the United States needs to pick up some small crappy little country and throw it against the wall, just to show the world we mean business."

    Of course, that's just Michael Ledeen from the AEI, and nobody in the White House listens to them. Right.


    and you have done???? (none / 0) (#31)
    by soccerdad on Sun Jan 07, 2007 at 03:36:42 PM EST
    scar - Perhaps you didn't read. (none / 0) (#57)
    by jimakaPPJ on Sun Jan 07, 2007 at 07:15:41 PM EST
    I make no claim what so ever:

    I also don't call those who apparently have done nothing, "bedwetters."


    As I did not. (none / 0) (#59)
    by jimakaPPJ on Sun Jan 07, 2007 at 07:28:06 PM EST
    Wrong name, but find little difference between the two of you.

    <b>Off topic troll post. </b> (5.00 / 1) (#60)
    by Sailor on Sun Jan 07, 2007 at 07:40:53 PM EST
    Sounds like a great way to (5.00 / 1) (#18)
    by Edger on Sun Jan 07, 2007 at 02:08:32 PM EST
    set up a future Iraq revolution and nationalizing of oil assets.
    The Independent on Sunday has obtained a copy of an early draft which was circulated to oil companies in July. It is understood there have been no significant changes made in the final draft. The terms outlined to govern future PSAs are generous: according to the draft, they could be fixed for at least 30 years. The revelation will raise Iraqi fears that oil companies will be able to exploit its weak state by securing favourable terms that cannot be changed in future.

    Iraq's sovereign right to manage its own natural resources could also be threatened by the provision in the draft that any disputes with a foreign company must ultimately be settled by international, rather than Iraqi, arbitration.

    They will be signing the population of Iraq into indentured servitude. Does anyone seriously think Iraqis will simply roll over, play dead, and honor those contracts for 30 years?

    Was nothing learned from propping up Pahlavi in Iran?

    Its not just the oil (5.00 / 1) (#23)
    by soccerdad on Sun Jan 07, 2007 at 02:51:47 PM EST
    but the geopolitical power thats exerted by its control.

    Global Policy Forum published this (5.00 / 2) (#44)
    by Edger on Sun Jan 07, 2007 at 04:23:24 PM EST
    article by James A. Paul back in 2002, nearly a year before the Iraq invasion.

    Oil in Iraq: the heart of the Crisis

    Oil is at the heart of the crisis that leads towards a US war against Iraq. For more than a hundred years, major powers have battled to control this enormous source of wealth and strategic power. The major international oil companies, headquartered in the United States and the United Kingdom, are keen to regain control over Iraq's oil, lost with the nationalization in 1972. Few outside the industry understand just how high the stakes in Iraq really are and how much the history of the world oil industry is a history of power, national rivalry and military force.
    According to Iraq oil expert Mohammad Al-Gallani at British-based GeoDesign Ltd, Iraq has 526 prospective drilling sites, of which only 125 have been drilled. Of those, 90 have proven potential as oil fields, but only 30 have been partially developed and just 12 are on stream. "You can imagine the huge potential that lies there for the future," Al-Gallani told Canadian Press in a story datelined December 14, 2002.

    As world demand for oil increases and as oil reserves in other areas decline at a fast rate, oil in Iraq will represent a steadily-larger proportion of the world's total. If Iraq's fields meet high-end estimates in the 3-400 billon barrel range, Iraq's reserves could reach over 30% of total global reserves by mid-century or even before.

    The prize was enormous and irresistable, and after inventing what turned out to be a multitude of shifting rationales and justifications and conducting a smoke and mirrors propaganda campaign to deceive the American people, Bush invaded Iraq in March 2003.

    Paul's article continues with:

    The long, bitter experience of oil producing countries with the US-UK companies has left behind an anger and militancy in local politics that hinders the companies' efforts to re-organize the "upstream" system. Such feelings run deep in Iraqi politics, going back to British seizure of Iraq after World War I and the bloody repression (including the use of poison gas) that crushed the nationalist revolt of 1920. British leaders fulminated against "Turkish misrule" in Iraq, but their own rule proved equally odious to Iraqis seeking independence and democracy.

    Iraqis also remember the way the companies treated the country after it gained its independence and how the companies held Iraqi production down, to manage international supply and price levels. Iraqi's also remember the fierce company resistance to Iraqi proposals for new exploration contracts in the 1960s. Such sentiments would doubtless not change after the ouster of Saddam Hussein.

    These feelings are magnified by US support for Israel and by the long, punishing US-UK-UN sanctions. The US-UK would thus find it very politically difficult to create an indigenous post-Saddam government that would agree to a sweetheart deal for the US-UK companies. For this reason, the US-UK have announced that they are planning a military government that will "purge" Iraqi politics of its Baathist and nationalist elements and remain in power more than a year or as long as necessary. Though the US-UK official announcements speak about "human rights" and "democracy," it would appear that the main goal of the war and "regime change" is to carry out the oil deals and re-fashion Iraqi politics on a new and more conciliatory and pro-US basis.

    carry out the oil deals (5.00 / 2) (#46)
    by Edger on Sun Jan 07, 2007 at 04:37:42 PM EST
    and re-fashion Iraqi politics on a new and more conciliatory and pro-US basis... with Production Sharing Agreements that funnel the lion's share of profits from Iraqi oil into the US and UK company coffers of friends of Blair and Bush, of course.

    A few hundred thousand dead Iraqis? So?

    A fed thousand dead Americans? Who cares?

    Setting up another 'Iranian revolution' down the road in Iraq? Big deal.

    There are always more Iraqis that can be killed, and more young Americans that can be convinced to agree be shoved in between the oil companies and the 'terrorists' that don't appreciate bush style 'freedom and democracy' and die for greed, when the time comes to invade or attack again.......


    it's the same old place (5.00 / 2) (#48)
    by Edger on Sun Jan 07, 2007 at 04:43:11 PM EST
    The poundin' of the drums, the pride and disgrace
    You can bury your dead, but don't leave a trace
    Hate your next-door neighbor, but don't forget to say grace
    And... tell me over and over and over and over again, my friend
    You don't believe
    We're on the eve
    Of destruction

    And (5.00 / 2) (#50)
    by Edger on Sun Jan 07, 2007 at 04:50:58 PM EST
    if you are going to fill the tanks of your SUV's with the blood of your and your neighbors sons and daughters, at least....

    ....do it with your eyes wide... shut.


    Wish I could- it would be much cheaper (1.00 / 2) (#73)
    by smiley on Mon Jan 08, 2007 at 09:54:53 AM EST
    they're right next door, so no expensive extraction or transport costs.  Unfortunately, nobody gave us the choice.

    but seriously (1.00 / 1) (#74)
    by smiley on Mon Jan 08, 2007 at 10:12:33 AM EST
    If someone has to go through the grinder to end up in your gas tank, wouldn't you rather it be someone you already KNOW is a jerk, instead of someone you've never met in some country you've never been to?  

    I only mean this in the sense of taking people and squeezing them for gasoline to run our cars- and I don't doubt for a second that gas squeezed from Americans would quickly get priced out of the market by cheaper and higher-octane versions from overseas :-P


    I wonder (5.00 / 1) (#51)
    by Al on Sun Jan 07, 2007 at 04:53:44 PM EST
    who is going to enforce those contracts. Oh, right, the Iraqi government.

    Exactly, Al (5.00 / 1) (#52)
    by Edger on Sun Jan 07, 2007 at 05:05:03 PM EST
    When the Iraqi's start thinking... "hey, wait a second here", of course they'll stop and say to themselves "oh well, we signed the contract - besides, look at all the 'freedom and democracy' we got paid with - hi ho, hi ho - it's off to work we go"

    Sure they will. In looking glass land:

    Iran preparation for the occupation forces withdrawal. A Chilling Letter from the Badr Brigade
    By Mr. Sadr's Office
    Nov 16, 2006, 18:56

    Capitalist exploitation is a great thing... (5.00 / 5) (#61)
    by Aaron on Sun Jan 07, 2007 at 07:50:30 PM EST
    ...for those with the capital.

    For the rest of us, everyone who's making less than 5 million a year, we'll be paying for the Iraq debacle/war crime, for the rest of our lives.  In fact everyone here who has children, can be comforted by knowing that when they grow up, and become taxpayers, they'll be paying for the invasion and occupation of Iraq throughout the course of their lives, and when their children, your grandchildren, become taxpayers, they'll also be footing the bill.

    And while we all pay, even you jimakaPPJ, the oil corporations will continue to subvert our democracy with all those surplus dollars.  They'll be working hard in every election cycle to insert another puppet dictator, like George W. Bush, who will do their bidding while telling himself that it's OK to be a traitor to the Constitution and the people of the United States, because they know who really controls America, and it sure isn't the voters.

    As long as they can keep enough people scared, enough people saying to the government, tell us what to do, instead of the people telling their elected representatives what to do, these haters of democracy will always win, and it will ultimately lead to demise of our great country, the demise of this great experiment in democracy.

    Remember where you heard people, I don't like having to say, I told you so.

    You may have to say that in Chinese. (5.00 / 1) (#81)
    by Bill Arnett on Mon Jan 08, 2007 at 01:07:15 PM EST
    a good summary from the PNAS (5.00 / 2) (#62)
    by soccerdad on Sun Jan 07, 2007 at 08:45:04 PM EST
    To summarize, Iran's claim that its nuclear technology is entirely peaceful appears to be false (insofar as we can judge from the statements of arms control officials). However, the oil export decline we project implies that Iran's claim to need nuclear power to preserve exports is genuine. U.S. insistence that Iran's nuclear technology program has no economic purpose has obscured the regime's petroleum crisis, of which the nuclear power need is one symptom.

    emphasis mine

    How Can We Honor the Sacrifice of Our Troops? (5.00 / 3) (#64)
    by john horse on Sun Jan 07, 2007 at 09:47:24 PM EST
    How does the Bush administration honor the sacrifice of 3,000 American soldiers?  They honor their sacrifice by providing our large corporations with the opportunity to make large amounts of money.   You see the oil corporations needed these special deals in Iraq because they are barely struggling by on the windfall profits that they have been making over the last 3 or 4 years.  

    Maybe I should look at the bright side of this.  Sure our soldiers gave their blood for oil, but at least they gave it up for something.  And isn't dying for something better than dying for nothing?

    here's (5.00 / 3) (#68)
    by soccerdad on Mon Jan 08, 2007 at 05:15:53 AM EST
    a good overview of the oil issue

    Its Back! (5.00 / 2) (#69)
    by john horse on Mon Jan 08, 2007 at 05:55:39 AM EST
    Interesting link SD.  According to SD's link "Iraq's sovereign right to manage its own natural resources could also be threatened by the provision in the draft that any disputes with a foreign company must ultimately be settled by international, rather than Iraqi, arbitration."

    So here is the plan.  We impose an unfair deal on a foreign country by force of arms.  The agreement says that some future government cannot unilaterally change this unfair deal even if they dont agree with it.  And we are doing it because we care so much for the Iraqi people and we respect their country's sovereignty (sarcasm alert).


    A time to profit, a time to give (5.00 / 1) (#76)
    by Dadler on Mon Jan 08, 2007 at 12:15:55 PM EST
    As long as big oil views profit above security, money above humanity, as long as it cannot think outside of the box to the tune of "In the long term, there is infinitely more upside is giving up profit in the short term.  Both perception and reality would be altered for the positive."  Sometimes the creation of stability in your place of business trumps immediate profit -- and Iraq would certainly fit that bill.  But it requires imagination, humanity, intelligence.  It requires those things freedom is supposed to engender.  

    They will fall back (none / 0) (#77)
    by Edger on Mon Jan 08, 2007 at 12:19:30 PM EST
    on the old justification: "we have a responsibility to our shareholders to maximize ROI, profit, and share value" forgetting (intentionally?) that it is about the shortest-term thinking imaginable in their industry, as well as many others, IMO.

    I wish (5.00 / 2) (#78)
    by aw on Mon Jan 08, 2007 at 12:44:08 PM EST
    Congress would investigate Cheney's Energy Task Force (remember those Iraqi oil maps?)

    They have (none / 0) (#79)
    by Edger on Mon Jan 08, 2007 at 12:48:16 PM EST
    but it doesn't look like they got very far.

    Though I imagine Waxman will never let it go.... I hope.


    I just hope (5.00 / 2) (#80)
    by aw on Mon Jan 08, 2007 at 12:57:25 PM EST
    it will happen within my lifetime.

    This is a bad thing? (1.00 / 1) (#7)
    by Gabriel Malor on Sun Jan 07, 2007 at 01:01:58 PM EST
    While I have always supported the oil trust idea, I don't see this law as a bad thing for a couple reasons.

    First, the oil industry in the Middle East is almost uniformly nationalized--including in Iraq, right now. But, as The New York Times notices, oil production in Iraq is way down, roughly half what it was pre-war (if these numbers can be trusted; the CIA World Factbook has pre-war production at only 2 million bbl per day).

    One consequence of these nationalized industries is that the profits from oil production go to the rulers and their families, who turn around and fund violence against their neighbors and the minorities in their countries. As has been noted around here more than once,  the nationalized oil industry and corruption in Saudi Arabia was one of the problems which contributed to Osama bin Laden's dissatisfaction and fatwa.

    Second, perhaps my favorite part of this article is the breathless way that the issue of profit is covered. Rather than question why companies are not being allowed to keep all of their profits less taxes, the author--and apparently everyone else--is shocked at the idea that companies would be allowed to keep three-quarters of their profits. That is, until they pay off the start-up costs. Then, the companies will be forced to give up 80% of their profit.

    What's really shocking is the gloss given to the idea of an "industry average" 90% of seized profits. Note, that is the "industry average" for nationalized industries (which Iraq's obviously won't be after this law). That type of robbery is not tolerated, generally, in free markets.

    For this reason, I'm not troubled by companies seeing 75%-20% of their profits. It's not helpful to compare the proposed quasi-privatized oil industry of Iraq with the nationalized industries of its neighbors. Obviously, the companies involved in a quasi-privatized industry are going to see more profit.

    when (5.00 / 3) (#9)
    by soccerdad on Sun Jan 07, 2007 at 01:06:22 PM EST
    done at the point of a gun it certainly is a bad thing.

    Of course Iraq already had contracts to renew their oil production. The contracts were with Russia and China but the contracts were not being executed because of sanctions which is why the US would not lift sanctions.

    If such a US deal was worked out without an invasion fine. With the invasion this is just plain hegemony and imperialistic actions.


    So what do you think? (1.00 / 2) (#11)
    by Gabriel Malor on Sun Jan 07, 2007 at 01:15:05 PM EST
    So which option do you support? The options I can see are:

    (1) Oil trust.
    (2) Status quo (nationalized oil).
    (3) Different law to allow the same thing. Something in which shorter contracts are allowed or greater profits seized?
    (4) Something else?

    I'm curious, because if you like options (1) and (3) then we're just arguing over degree.


    Missing the point (5.00 / 3) (#47)
    by Sailor on Sun Jan 07, 2007 at 04:42:02 PM EST
    It's not our country. They had no WMDs, nothing to do with AQ or 9/11 and we invaded for oil using lies. Now the true reason is out in the open.

    Tho it really was always there just below the surface. PNAC had been lobbying for a war on iraq for years, then onto syria and iran to '"protect our vital interests in the Gulf."

    The only 'vital' interest we have in the ME is oil.


    Great, but that doesn't solve our problem (1.00 / 2) (#49)
    by Gabriel Malor on Sun Jan 07, 2007 at 04:45:46 PM EST
    Sailor, that's great 'n' all. We know you think we shouldn't have gone. But now you're missing the point. The fact is, we've got to deal with the situation we're stuck with today. So I'm asking:

    What should we do about the oil situation in Iraq right now? Status quo? Oil trust? Privatization? Quasi-privatization? What?


    'WE' should do nothing ... (5.00 / 2) (#56)
    by Sailor on Sun Jan 07, 2007 at 06:55:13 PM EST
    ... it's not our oil.
    We know you think we shouldn't have gone.
    About 70% of Americans and iraqis agree with me.

    Once you start from a false premise any other questions are baseless.


    So let the Iraqi's do it. (1.00 / 2) (#66)
    by Gabriel Malor on Mon Jan 08, 2007 at 12:29:02 AM EST
    I guess that means we should stand back and let the Iraqi government enact this law, as is their sovereign right.

    but they (5.00 / 2) (#67)
    by soccerdad on Mon Jan 08, 2007 at 04:56:01 AM EST
    are not a sovereign government as long as we are there telling them what to do

    The reason I was asking... (1.00 / 1) (#71)
    by Gabriel Malor on Mon Jan 08, 2007 at 08:24:05 AM EST
    soccerdad and Sailor,

    The reason I was asking was because you seem to have ruled out anyone that could make a decision. You say "we" shouldn't do it, and you say that the Iraqi government is not a legitimate government, so my question is: who is left?

    Are the Iraqi's just supposed to do nothing with their oil until we withdraw or until they get a government to your liking?


    they should not be foorced to pass this law now (5.00 / 2) (#72)
    by soccerdad on Mon Jan 08, 2007 at 09:50:47 AM EST
    there is little that can be done in a practical manner until the violence ends which will not be until after the US leaves. The US has shown that while it has no trouble destroying the country and its infrastructure  it has little interest in helping the Iraqi people.

    This law is meant to hold Iraq hostage even after the US leaves.

    After the US leaves the Iraq government should negotiate any agreement it see fit and/or should not be bound by any agreement they are forced to sign now.

    Or dont you understand how foreign occupations work?


    it's not the iraqi gov't doing it (5.00 / 3) (#75)
    by Sailor on Mon Jan 08, 2007 at 10:46:27 AM EST
    I guess that means we should stand back and let the Iraqi government enact this law
    they didn't have any input:
    the new legislation was drafted with the assistance of BearingPoint, an American consultancy firm hired by the US government, which had a representative working in the American embassy in Baghdad for several months.

    "Three outside groups have had far more opportunity to scrutinise this legislation than most Iraqis," said Mr Muttitt. "The draft went to the US government and major oil companies in July, and to the International Monetary Fund in September. Last month I met a group of 20 Iraqi MPs in Jordan, and I asked them how many had seen the legislation. Only one had."

    It is not "our" problem (5.00 / 1) (#70)
    by Edger on Mon Jan 08, 2007 at 08:05:48 AM EST
    "we" (America) are the Iraqis problem. The Production Sharing Agreements are a continuation of that problem, and a way of ensuring that the Iraqis will never be "sovereign" in their own country.

    They are the rape and pillaging of Iraq, dressed up and smelling pretty for TV.


    When it is (none / 0) (#12)
    by Edger on Sun Jan 07, 2007 at 01:23:36 PM EST
    done at the point of a gun [and with the deaths of hundreds of thousands of Iraqis] it certainly is a bad thing.

    Yeah (5.00 / 2) (#17)
    by scarshapedstar on Sun Jan 07, 2007 at 02:02:27 PM EST
    One consequence of these nationalized industries is that the profits from oil production go to the rulers and their families, who turn around and fund violence against their neighbors and the minorities in their countries.

    Yeah. Wouldn't it be terrible to see this oil money taken by a war criminal who would destabilize the region and back the majority in a war of ethnic cleansing? Thank God we're giving it to Bush and his cronies instead...


    Directors, officers, employees, and shareholders (1.00 / 2) (#19)
    by Gabriel Malor on Sun Jan 07, 2007 at 02:22:08 PM EST
    I'm sure the shareholders and employees of companies in the oil business will appreciate your characterization of them as "cronies."

    I'm always amazed at the hatred of corporations. Don't people know that corporations are composed of directors, officers, employees and shareholders? Attacking a corporation is the same as attacking its employees and shareholders--most of whom are average joes. If your real beef is with the directors and officers, go after them. Don't penalize the rest of these folks.


    Nice way to misrepresent Scars' comment (5.00 / 1) (#20)
    by Edger on Sun Jan 07, 2007 at 02:36:55 PM EST
    The topic here is Iraq, and particularly the exploitation of their oil resources after the invasion and destruction of their society, infrastructure and economy. These are things the right would probably rather not be discussed, I'm sure, but thread hijacking won't work here.



    Let's not kid ourselves here (5.00 / 2) (#22)
    by scarshapedstar on Sun Jan 07, 2007 at 02:49:13 PM EST
    Uh... I don't think that characterization was made. Furthermore, I'm not sure that "attacking a corporation is the same as attacking its employees and shareholders". That's like saying that attacking Bush's policies is the same as attacking every citizen of the United States.

    Exxon's chairman left with a $400 million retirement package. How many "average joes" is that worth? I think you know full well which cronies I'm talking about.


    Thanks (none / 0) (#28)
    by jimakaPPJ on Sun Jan 07, 2007 at 03:11:54 PM EST
    Naive (none / 0) (#1)
    by koshembos on Sun Jan 07, 2007 at 12:21:54 PM EST
    You are not the only one, count me in. With the Republican, it's always about money=oil.

    Maybe if (none / 0) (#6)
    by Che's Lounge on Sun Jan 07, 2007 at 01:00:55 PM EST
    Iran had better access to refined petroleum they would not feel the need to go nuclear. Just one negotiating point. Not that anyone is listening. For Bushco, it's all about democracy or nuthin'.

    Like if they had control of Iraq? (5.00 / 1) (#8)
    by Edger on Sun Jan 07, 2007 at 01:04:16 PM EST
    Which Bush seems to have pushed into their arms.

    Who coulda seen that coming? (5.00 / 2) (#15)
    by scarshapedstar on Sun Jan 07, 2007 at 01:54:08 PM EST
    After all, it's not like there's any major similarity between Iraq and Iran that separates them from every other country in the Middle East.

    Oh, wait...


    Speaking of that little oversight (5.00 / 3) (#16)
    by scarshapedstar on Sun Jan 07, 2007 at 01:57:15 PM EST
    Isn't it odd how our vaunted God's Own President takes all his cues from neocons with a Leninist philosophy of religion as a "noble lie"? Kristol, et al have such contempt for religion that they never believed that Sunnis and Shiites would actually find anything to fight over.

    History will be most unkind to these men.


    Che makes my point. (none / 0) (#27)
    by jimakaPPJ on Sun Jan 07, 2007 at 03:10:10 PM EST
    No one is preventing Iran from building more refineries. It would be easier, quicker, cheaper and make all the world happier.

    That they don't proves they won't nukes to attack with.


    they are running out of supply (5.00 / 1) (#29)
    by soccerdad on Sun Jan 07, 2007 at 03:21:20 PM EST
    thats the long term problem

    They could be done as early as 2015


    Incorrect (1.00 / 2) (#32)
    by Gabriel Malor on Sun Jan 07, 2007 at 03:37:15 PM EST
    Iran still has the fourth largest amount of reserves. Supply is most definitely NOT the issue.

    The real problem is that it isn't investing in production and its losing $10 or so billion dollars a year because of deteriorating facilities. The trends indicate that if Iran fails to rebuild its oil industry, it will make no profit on oil by the year 2015.

    That isn't to say that Iran won't have oil. Just That it won't make any money on it.


    assuming they pumped at todays rate (3.00 / 2) (#34)
    by soccerdad on Sun Jan 07, 2007 at 03:40:03 PM EST
    they would be done by 2030 with know reserves but here is evidence that they are having difficulty extracting it.

    here's a start (3.00 / 2) (#35)
    by soccerdad on Sun Jan 07, 2007 at 03:44:01 PM EST

    THe problem is that they are exporting so much to keep the econoimy going they wont have any left to sustain them sleves


    Soc, you have a good point (3.50 / 2) (#37)
    by Edger on Sun Jan 07, 2007 at 03:55:28 PM EST
    which he is deliberately missing to take the thread off the topic of Iraq and it's oil.

    It doesn't say what you say it says. (3.00 / 2) (#38)
    by Gabriel Malor on Sun Jan 07, 2007 at 03:56:35 PM EST
    No where in that link does it say that Iran will run out of oil in 2015. In fact, it doesn't even mention the year 2015. It does, however, support me:

    Iran's image is of a muscular oil producer with plentiful reserves, but in fact it could soon face its own energy crunch owing to failing infrastructure and lack of investments, Roger Stern at Johns Hopkins University said.

    their supply will be such that (3.00 / 2) (#40)
    by soccerdad on Sun Jan 07, 2007 at 04:06:56 PM EST
    there will be no profits by 2015. They are not going to pump themselves completely dry.

    You take the size of their reserves divide by the current pumping rate you get the year 2030

    The real point here is without hair splitting is simply that Iran's reserves are not so large as to preclude them having a legitimate need for nuclear energy.
    You want 2030 instead of 2015 so be it but pumping in thge ME from some of the large fields is starting to decrease, Its called peak oil. go to OILDRRUM.com for an analysis


    google the last weeks news (none / 0) (#33)
    by soccerdad on Sun Jan 07, 2007 at 03:38:37 PM EST
    Understanding what you read, Part 1. (1.00 / 3) (#36)
    by Gabriel Malor on Sun Jan 07, 2007 at 03:51:48 PM EST
    Like here in USA Today:

    Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues income could virtually disappear by 2015, according to an analysis published Monday in a journal of the National Academy of Sciences.

    Or here at the Huffington Post where it's in the headline:

    Iran's Oil Revenue Could Disappear By 2015...

    Or here at Al Jazeera (which, unlike the AP version used by everyone else, actually had a quote from the study's author):

    Stern's analysis noted that Iran's oil profits could dry up by 2015 as a result of the inadequate investment in Iranian oil production, which has been the main industry in Iran since the 1920s.

    "I'm not saying that Iran will have no oil in eight years," Stern said in a telephone interview. "I'm saying that they will be using all of it for themselves."

    I knew you'd seen the recent news on this. I just expected you to be able to point me to some source that actually backs up what you said. In lieu of that, I'd hope that you will acknowledge your error.


    go and look at the whole PNAS article. (5.00 / 2) (#39)
    by soccerdad on Sun Jan 07, 2007 at 04:00:28 PM EST
    their oil reserves will be such that they will have little left and will use that for themselves

    If you had bothered to read the PNAS article the author also said that their quest for nuclear energy was legitimate or were you not going to bother to quote that part.

    I owe no apology for your selective quoting

    nice try no go.


    Selective quoting? (1.00 / 2) (#41)
    by Gabriel Malor on Sun Jan 07, 2007 at 04:11:05 PM EST
    It did not say "their quest for nuclear energy was legitimate" either. It said:

    Iran's nuclear ambitions are motivated not just by a desire for regional supremacy but by a potentially devastating crisis in its oil industry, a US researcher said in a report made public yesterday.
    Stern said there was no reason to doubt US-led accusations that Iran's drive to develop nuclear energy has more sinister ends in mind, to entrench the regime in power and fend off US military hegemony in the Gulf.

    He added "but it cannot be inferred from this that all Irani(an) claims must be false."

    Stern's contention is that there may be mixed motives, not that Iran's motives are "legitimate." (Though, to be fair, I question whether acquiring nuclear weapons as a deterrent to conventional attack is an "illegitimate" thing. Note: that doesn't mean I'd like to see Iran get them.)

    But this is getting rather far from where we started. The point is that your claim that Iran is running out of oil by as early as 2015 is unsupported by facts. It's also not supported by any of the reporting from last week on Roger Stern's paper, which asserted that Iran's oil income would dwindle by 2015 unless it re-invests in production.


    well (5.00 / 1) (#42)
    by soccerdad on Sun Jan 07, 2007 at 04:18:20 PM EST
    from my original link

    The regime's dependence on export revenue suggests that it could need nuclear power as badly as it claims," Stern wrote.

    from the originalk PNAS article

    We believe scenario 2 is most probable. In this case, export
    in 2014-2015 is preceded by a decline to 33-46% of
    2006 exports by 2011.

    If you look at the calculations its they are runninng out.

    There are other scenarios which assume they will find new reserves put such scenarios are labeled optimistic

    Stein's study is being spun. His calculations in his article speak for themselves


    Production capacity does not equal supply. (3.00 / 2) (#45)
    by Gabriel Malor on Sun Jan 07, 2007 at 04:29:32 PM EST
    If you look at the calculations its they are runninng out.

    They are running out of production capacity (actually, they're losing production capacity owing to deteriorating infrastructure). They are not running out of supply. You do know the difference, don't you?


    you are plain wrong (3.66 / 3) (#53)
    by soccerdad on Sun Jan 07, 2007 at 05:57:26 PM EST
    You can't prove me wrong so now you start making crap up. What else is new.

    The depeletion rates used in the calculations refer to supply.

    Now you are lying. So I'm done.


    before I forget (3.50 / 2) (#54)
    by soccerdad on Sun Jan 07, 2007 at 06:05:11 PM EST
    there are multiple issues

    One is that the capacity that the Iranians are in such dire need of is refining capacity. As of now they ship the oil out and have to buy the refined product back. This is an important economic issue but has no bearing on reserves/ supplies in the ground. They need investment in refining capacity for domestic use and to save tons of money.

    Investment might help them get more out of their reserves. There are expensive new technologies that help squeeze more out of the fields but it amounts to cleaning out the tank.

    Peak oil is either here or will be here shortly withing 3-5 years. That means that the ability to pump it out of the ground is declining globably (or wil be soon).

    Its important to understand this because it puts into perspective why the urge to invade Iraq and possibly Iran is so high.

    Its also important to understand that the western majors like shell etc control only about 9% of the known reserves.


    We need a government there (none / 0) (#14)
    by Che's Lounge on Sun Jan 07, 2007 at 01:47:23 PM EST
    so we have somone to loan money to (and collect payments from) for the equipment that they will HAVE to purchase from Halboys and KBR. That is just a continuation of Soccerdad's observation on excluding Russia and China.

    God = Market Share (none / 0) (#82)
    by jondee on Mon Jan 08, 2007 at 01:12:23 PM EST
    It's not just the oil companies, they all do it. The auto makers weigh the cost of law suits from accidents vs the overall costs of a recall before deciding whether to go ahead with one.

    No doubt some executives suffer the occasional Dark Night of the Soul over perpetuating this kind of thing, but, obviously, many do not. In a society supposedly founded on enlightened pricipals, and feverishly defended by those who constantly trumpet the importance of values, why isnt this moral travesty exposed more often for what it is? Because the lunatics have taken over ownership and are running the asylum.

    That reminded me of this (none / 0) (#83)
    by aw on Mon Jan 08, 2007 at 01:22:34 PM EST
    Our lives are valued at less than a house.
    Cost-benefit analyses trumped safety concerns. One of the key documents introduced in the case was a 1973 memorandum titled "Value Analysis of Auto Fuel Fed Fire Related Fatalities."1 This memo, authored by GM engineer Edward Ivey of the company's Advance Design unit, evaluated the cost to GM of "burned deaths." (GM has tried to keep this memo secret and hired Ken Starr to argue their case.) Assuming the "value" or cost of a fatality is $200,000 and that each year there were 500 fatalities in GM cars where the bodies were burnt by fuel-fed fires, Ivey determined that "burned deaths" would cost the company $2.40 per vehicle, when the cost of lost lives was averaged over all cars sold. At the same time, Ivey determined the company should spend only $2.20 on each new vehicle to prevent these deaths. In other words, it would not be cost effective for GM to pay more than the $2.20 per car for each "burned death."

    Another cost-benefit analysis was performed by GM engineering staff in March 1974. It, too, placed the value of a human life lost to a car accident at $200,000 and estimated that the company could cost-effectively spend only $2 per car for rear impact protection to prevent fuel-fed fires.2


    OT (none / 0) (#84)
    by aw on Mon Jan 08, 2007 at 01:23:28 PM EST
    I got distracted.  Sorry

    What do.... (none / 0) (#85)
    by kdog on Mon Jan 08, 2007 at 06:49:46 PM EST
    Thats cold man...cold (none / 0) (#87)
    by kdog on Mon Jan 08, 2007 at 07:01:01 PM EST
    By that logic, Iraq lost more people, shouldn't they decide what they do with their resource?

    Anything the Iraqi govt. decides will be illegitimate or perceived as such due to the occupation.  We need to leave.

    it's not cold (none / 0) (#88)
    by Edger on Mon Jan 08, 2007 at 07:06:04 PM EST
    it's sick

    I try... (none / 0) (#89)
    by kdog on Mon Jan 08, 2007 at 07:11:10 PM EST
    to give everybody the benefit of the doubt, it feels good.

    But I hear you brother.


    I hear you (none / 0) (#90)
    by Edger on Mon Jan 08, 2007 at 07:17:04 PM EST
    I just had a 'conversation' with hin the other day... so I'm a little less willing I guess