Follow the Oil

The Bush Administration may not have a rubber stamp U.S. Congress anymore but that doesn't mean it and its corporate sponsors are lacking for things to do or political bodies to command. Consider Iraq, for instance. Yes, the country and its U.S. military occupiers are mired in a civil war, but amidst all the chaos, there is a government of sorts in Baghdad. And what sort of matters might that body be concerned with?

Iraq’s oil reserves — thought to be the second largest in the world — have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, “Iraq possesses huge reserves of oil and gas — reserves I’d love Chevron to have access to.”

A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more.

In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries “to open up areas of their energy sectors to foreign investment.” One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq’s economy, democracy and sovereignty.

Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president’s benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency.

The administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies.

The law would transform Iraq’s oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies.

The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control.

The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq’s current “instability” by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq’s oil would then be left underground for at least two years rather than being used for the country’s economic development.

The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil.

Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced.

An Audacious Endorsement (Part One)

A cynicism resulting from the disappointments of elections--and governments--past has made me hesitent about jumping on the bandwagon of any 2008 Democratic candidate too soon. Nevertheless, it hasn't taken long in this only recently initiated pre-primary season to assess the field and arrive at a point of clarity regarding the party's best candidate.

But before coming out of the not so hidden closet to reveal this candidate's identity, it's worth retreating a few steps to consider what exactly it is that Democratic voters should be looking for when choosing their next nominee and the country's next president.

1. Administrative Skill. At the top of the list, undoubtedly, is having someone who's unmistakeably up for the job; someone who can respond well to a crisis, can make good decisions, and can with some degree of expertise, survey the minutia of political drama and be able to ascertain and consistently maintain a vision of things and the country.

2. Political Values. Next to this, at least for us hyper-partisans, is someone who brings the right values to the position. For progressive/liberal Democrats, the ideals that come to mind are those relating to the preservation of fundamental civil liberties (freedom of speech, freedom of and from religion, freedom of association, and the freedom of and need for an independent press); protecting the individual from the coercision and abuses of centralized power (church, business, and the state itself) through the enforcement of civil rights, consumer and worker safety, and labor (right to unionize) laws; and helping to ensure that the opportunities, benefits and prosperity of a free society are made available to all those who share with us the gift of humanity, and who by their support and contribution to that society, are entitled to its benefits--in other words, recognizing not just the visible movers and shakers, the privileged of our society, but all those who through their business consumption and civic association, participate in the affairs of the nation (which is all of us).

3. Communication Skills. Another attribute democrats and Democrats should look for in choosing their executive leadership is someone who can navigate the minefields of political opposition, particularly those with deep pockets or those having media and information control (and the likelihood that these political sources of power are frequently one and the same and bound up within single institutions). Can the candidate and presidential hopeful speak above the noise machine, and appeal directly to the mass public?

4. Paradigm Changing Aptitude. Finally, of especial importance for progressives, can the candidate fundamentally alter the country's political dynamics? Is, or can, he or she be a paradigm-buster?

5. Character. Is the candidate trustworthy, capable of exercising reason, and possessing of reasonably impeccable moral credentials?

With these qualifications and considerations in mind, it is clear to me that the best choice Democrats have is Barack Obama. The first term Illinois Senator of mixed racial heritage is not only the best choice this year, he may be the best choice Democrats have had in a generation, and maybe the most audacious candidate the party will have put forward ever.

In Part Two of this Audacious Endorsement, I will attempt to outline the reasons I believe this to be so.