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Scott Adams argues, obliquely, that sending soldiers to risk their lives in Iraq amounts to converting them to liquid human fuel.
It’s an interesting and thought-provoking post. The premises, however, are incredibly flawed:
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Wow, anybody spotted the black helicopters supertankers we are using to steal all of Iraq’s oil?
I wonder why Mr. Adam’s seems to think so little of our soldiers and their earnest efforts to help the Iraqi people, instead of deciding they are “volunteering” to let the rest of us drive SUVs. But then Mr. Adam’s use of the term “SUV fuel” kind of gives his purpose all away, doesn’t it?
The war in Iraq has next to nothing to do with oil.
I’d love to hear your arguments in support of this contention.
Consider the following:
1) after the invasion while priceless anthropological antiques and dangerous high explosives went totally unguarded the Oil facilities were immediately seized and protected by US soldiers.
2) The Iraq Hydrocarbon Law was an enormous give away to US oil companies, basicaly allowing us to steal their only real natural resource (compare and contrast with the AngloIranian Oil deal in Iran, and you know where that got us).
3) Just coincidentally Iraq was going to go off the petro-dollar in favor of the petro-euro right at the same time we got our “slam dunk” intelligence on WMD.
The war may not be ALL about oil, but saying it has next to nothing to do with oil is perhaps a bit starry eyed.
Charles Austin repeats the most mindless of arguments – that anyone who points out the obvious role of oil in the fact that the middle-east is an area of American interests, must thereby be claiming that we went to Iraq with supertankers in tow to literally cart the stuff off.
Were it not for the oil in Iraq, and in its neighbors, American interests in the region would be on par with our interests in Burma, or Burundi. And we would not have much interest, nor would we invest thousands of lives and hundreds of billions of dollars to bring “democracy” to the region, to worry about its stability, or to seek to guide its political evolution.
This is not conspiracy, its common sense. And I am not claiming there is anything inherintly wrong with it. Without assured supplies of oil, Western economies would collapse. It is an obvious and vital national interest.
James is utterly blind to these realities apparently which seems very odd.
Were it not for our addiction to oil, we’d have ignored the Iraqis, and instead played hardball with the Saudis, who were the state actors most directly responsible for 9/11 after the Taliban themselves. One theory by those who really wanted to believe that the Administration wasn’t just pushing for war with Saddam for its own sake was that it would pressure the Saudis – in a way that wouldn’t just turn off their oil valve.
Tlaloc,
You said
2) The Iraq Hydrocarbon Law was an enormous give away to US oil companies, basicaly allowing us to steal their only real natural resource
Could you provide some cites to back up this assetion or describe why you think it is an accurate description of the agreement?
Did the agreement restrict development rights to US companies only?
Do you know what the terms of the agreement were or what the production splits between Iraq and the developing oil companies was?
My understanding was the agreement was a standard petroleum development agreement similar to what we have in the US. Under these agreements resource owner takes a certain (smaller) percentage of the total oil production and the oil company takes the rest.
In the US the government owner takes around 12 % of the production and the oil company that develops the oil takes 88 % of the oil produced.
The oil company takes a higher percentage because they take the financial risk to explore for, find, and produce the petroleum resource if it exists.
My understanding is the Kurds in particular were very eager to sign this kind of an agreement because it.
1. Gives them a revenue stream
2. More importantly gives them a way to acquire the technical expertise needed to allow them to develop their oil resource on their own in the future.
Could you provide some cites to back up this assetion or describe why you think it is an accurate description of the agreement?
Sure.
First off a pretty sanitary Washpost article:
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/11/AR2006091100206.html
Nothing too incriminating there unless you read between the lines a bit.
But then we move on to the informed commentators like this:
http://www.tompaine.com/articles/2007/02/27/who_will_control_iraqs_oil.php
and
http://baltimorechronicle.com/2007/032907Hussain.shtml
Who point out that the law is sweeping in the amount of control and access and total lack of any constraints on foreign oil companies who want to exploit Iraq’s oil.
Did the agreement restrict development rights to US companies only?
I don’t believe so, but ask yourself, given that said companies are going to be totally reliant on US soldiers to protect them, and given that our current CoC and his administration is made up almost exclusively of US petroleum industry hacks, what foreign Oil company is going to take the risk that US assets commanded byt their rivals might just not be on alert when it comes to their holdings?
Working in Iraq is already dangerous. Doing it when the Americans are gunning for you to fail is suicidal.
My understanding was the agreement was a standard petroleum development agreement similar to what we have in the US. Under these agreements resource owner takes a certain (smaller) percentage of the total oil production and the oil company takes the rest.
What I’ve read indicates these deals are VERY non-standard. The oil companies are being given longer contracts (35 years I believe) given access to all aspects of the Iraqi fossil fuels (including those aspects currently run by the Iraqi government), are given contracts with guaranteed profits (cost plus arrangements), and are not required to hire any Iraqis, partner with any Iraqi companies, or reinvest any profits back in the country.
My understanding is the Kurds in particular were very eager to sign this kind of an agreement because it.
Since the Kurds don’t own the oil fields of course they are eager to sign. They get something for nothing. The only major oil fields in the Kurdish north are the Kirkuk fields and that area is heavily contested by all three sides. The rest of the big fields are in the south far from Kurdish control.
Crap, I guess it did eat it.
Well here’s the short version:
sources, yes, you certainly can have some.
here are a couple:
http://baltimorechronicle.com/2007/032907Hussain.shtml
http://www.tompaine.com/articles/2007/02/27/who_will_control_iraqs_oil.php
As for it being a standard deal I quote the second source above:
The new oil law gives foreign corporations access to almost every sector of Iraq’s oil and natural gas industry. This includes service contracts on existing fields that are already being developed and that are managed and operated by the Iraqi National Oil Company (INOC). For fields that have already been discovered, but not yet developed, the proposed law stipulates that INOC will have to be a partner on these contracts. But for as-yet-undiscovered fields, neither INOC nor private Iraqi companies receive preference in new exploration and development. Foreign companies have full access to these contracts.
The exploration and production contracts give firms exclusive control of fields for up to 35 years including contracts that guarantee profits for 25-years. A foreign company, if hired, is not required to partner with an Iraqi company or reinvest any of its money in the Iraqi economy. It’s not obligated to hire Iraqi workers train Iraqi workers, or transfer technology.
The current law remains silent on the type of contracts that the Iraqi government can use. The law establishes a new Iraqi Federal Oil and Gas Council with ultimate decision-making authority over the types of contracts that will be employed. This Council will include, among others, “executive managers of from important related petroleum companies.†Thus, it is possible that foreign oil company executives could sit on the Council. It would be unprecedented for a sovereign country to have, for instance, an executive of ExxonMobil on the board of its key oil and gas decision-making body.
And it goes on…
None of this is standard I believe.
Lastly on the kurds: of course they like the deal, they get something for nothing. The only major oil field in their area is the Kirkuk fields which are heavily contested by all three sides. The rest of the big oil producers are in the south far from Kurd control. A big concern about a loose confederation of Iraqi states is that the shia would hold all the money because they control basically all the oil.
Tlaloc,
I read both articles.
The main complaint in the baltimore chronicle article is that production terms were for 30 years.
This is more favorable to Iraq then standard oil production agreements in the US. Most US development contracts specify that the oil company will have right to explore, drill, and keep up to 88% of the oil produced as long as production occurs Production term is not limited to 30 years as the Iraq contract is.
It appears the tom paine article had three main complaints about the Iraq deal.
1. It was negotiated without input from the legislature. That is pretty similar to the way we do things in the United States. Treaties are negotiated by state department and then go to the senate for approval. The senate never negotiates a treaty
2. That oil revenues may go to the regions where the oil is produced not the central government.
This is a good idea particularly when you look at the history of oil production in the niger delta. The people living there have had all of the negative impacts of oil production and none of the monetary benefits. Distributing oil revenue by region in Iraq would prevent this problem.
3. Producing oil companies will have seats on the petroleum management council in Iraq and foreign companies will have access to manage, service, and explore for oil fields within Iraq.
I’m not sure what to think what about having oil companies sit on petroleum management council. Potentially bad, they might set terms unfavorable to Iraq. Potentially good, they have technical expertise needed to develop Iraq’s petroleum resource.
In any case allowing foreign oil and service companies access to Iraq is absolutely critical to the development of the Iraq’s petroleum resource.
After years of opression and neglect by saddam hussein there is no existing infrastructure for petroleum development within Iraq.
Petroleum is the main resource Iraq has. The best way to improve the life of the people of Iraq is to rapidly develop and produce that resource under terms that are fair to Iraq. The proposed oil production contract seems to be a reasonable first attempt at facilitating this process.
Bluntly, this first contract is subject to change in the future and the oil companies are prudent to try and make profits from the exploration in the early years.
Because in the later years, after the filds are producing, and Iraq has enough of it’s own petroleum expertise, it is likely the oil companies portion of the petroleum production will be reduced or eliminated through expropriation by the national government.
You can see examples of this in mexico, venezuela, peru, russia, etc.
Tlaloc,
You said
I’m sure Saddam was just dying to work with us again after we’d stabbed him in the back already once.
Really.
What was the first time we had stabbed him in the back?
UN, not US sanctions were in place. Russia, China, France, and others were actively pushing for the sanctions to be lifted. Saddam wanted sanctions lifted and used the harm they sanctions were causing to the civilian population as a reason to lift the sanctions.
Saddam could have produced lots of oil without having to work with the US. So, as previously stated, if it was all about the oil all we had to do was stop opposing the sanction lifting that was supported by russia, china, france, etc. The fact that we did not support the removal of the sanctions clearly shows it was not “all about the oil”
I forgot to mention it earlier but thanks for posting the links you did. They gave me information on the proposed contract I did not have.
Cheers,
TJIT
The war in Iraq has next to nothing to do with oil.
The amount of naivety required to believe this could power all of the homes in New York and New Jersey for several thousand years.
If it was all about oil we would have lifted the sanctions against Iraq and signed production sharing agreements with them.
The Baker energy report to the Chaney Energy task force proposed exactly this solution, which is why it was quickly rewritten in the wake of 9-11 in order to give credence to the notion that the Bush administration always saw the Hussein regime as a threat instead of someone with whom we could deal with for oil.
The fact that the administration screwed up the invasion so the oil can’t flow at pre Gulf war 1 levels is just a sad commentary on their hubris.
The idea was never to steal the oil, that is a convenient straw man for those too obtuse to see what is right in their face. The idea was to control the flow of oil and thus control prices. This is so obvious that to consider it some kind of conspiracy theory betrays a remarkable inability to see the obvious.
Saddam could have produced lots of oil without having to work with the US.
Right trading in Euros and allowing the Russian’s China et all to call the shots, god it so funny to see people who are so clueless about the single most important commodity to our economy claim to be so sophisticated about “terrorism” and the danger to the US and Iraq’s invlovment.
Also the US was going to push for the sanctions to be lifted, that was already starting to become the administrations line, both Powell and Rice made statements about the lack of threat from the Hussein regime pre 9-11.
Rick,
I said “If it was all about oil we would have lifted the sanctions against Iraq and signed production sharing agreements with them.”
You said
The Baker energy report to the Chaney Energy task force proposed exactly this solution
which agrees with what I said. Later in the same sentence you said.
which is why it was quickly rewritten in the wake of 9-11 in order to give credence to the notion that the Bush administration always saw the Hussein regime as a threat instead of someone with whom we could deal with for oil
You argument clearly supports the idea that if oil was the driving factor we would have just lifted the sanctions.
