I put Middle Earth Journal in hiatus in May of 2008 and moved to Newshoggers.
I temporarily reopened Middle Earth Journal when Newshoggers shut it's doors but I was invited to Participate at The Moderate Voice so Middle Earth Journal is once again in hiatus.

Friday, October 26, 2007

Now it really is all about oil

In the 21st century's version of the "Great Game" of 19th century imperialism, the Bush administration made a colossal gamble that Iraq could become a kind of West Germany or South Korea on the Persian Gulf - a federal republic with a robust, oil-exporting economy, a rising standard of living, and a set of US bases that would guarantee lasting American domination of the most resource-strategic region on the planet.

The political half of that gamble has already been lost, but the Bush administration has proven adamantly unwilling to accept the loss of the economic half, the oil half, without a desperate fight. Perhaps the five super-bases that the US has been constructing in Iraq for as many as 20,000 troops each, plus the ill-built super-embassy (the largest on the planet) it has been constructing inside Baghdad's Green Zone, will suffice to maintain American control over the oil reserves, even in defiance of international law and the officially stated wishes of the Iraqi people - but perhaps not.
It's sad but true - we here in the US must go to the overseas press to find out what's really going on in Iraq and what it means. Jack Miles writing in the Asia Times explains that Iraq's sudden independence and interest in sovereignty may not bode well for the Bush administration's lust for control of Iraq's oil.
Oil: The sovereignty showdown in Iraq
In any case, a kind of slow-motion showdown may lie not so far ahead; and, during the past weeks, we may have been given a clue as to how it could unfold. Recall that after the gunning down of at least 17 Iraqis in a Baghdad square, Prime Minister Maliki demanded that the State Department dismiss and punish the trigger-happy private security firm, Blackwater USA, which was responsible for the safety of American diplomatic personnel in Iraq. He further demanded that the immunity former occupation head L Paul Bremer III had granted, in 2004, to all such private security firms be revoked. Startled, the Bush administration briefly grounded its diplomatic operations, then defiantly resumed them - with security still provided by Blackwater. Within days, though, Bush found himself face-to-face in New York with Maliki for discussions whose topic National Security Advisor Stephen Hadley revealingly named as "Iraqi sovereignty". Who would blink first?

We're still waiting to see, but in the wake of an Iraqi investigation that ended with a demand for $8 million compensation for each of the 17 murdered Baghdadis, Blackwater is reportedly "on its way out" of security responsibility in Iraq, probably by the six-month deadline that Maliki has demanded. Despite its disgrace, the well-connected private security company continues to win lucrative State Department security contracts. Blackwater expert Jeremy Scahill told Bill Moyers that losing the Iraq gig would only slightly affect Blackwater's bottom line, but could grievously inconvenience US diplomatic operations in Iraq. In forcing such a crisis on the State Department, the Maliki government, whose powerlessness has been an assumption unchallenged from left or right (in or out of Iraq), suddenly looks a good deal stronger.
So what does this sudden independence mean for the oil? The Iraqis may want the same deal their neighbors have.
By December 31, 2008, according to Iraqi Foreign Minister Hoshyar Zebari, the government of Iraq intends to have replaced the existing mandate for a multinational security force with a conventional bilateral security agreement with the United States - an agreement of the sort that Washington has with Kuwait, Saudi Arabia and several other countries in the Middle East.

The Security Council has always paired the annual renewal of its mandate for the multinational force with the renewal of a second mandate for the management of Iraqi oil revenues. This happens through the "Development Fund for Iraq", a kind of escrow account set up by the occupying powers after the overthrow of the Saddam Hussein regime and recognized in 2003 by UN Security Council Resolution 1483. The oil game will be up if and when Iraq announces that this mandate, too, will be terminated at a date certain in favor of resource-development agreements that - like the envisioned security agreement - match those of other states in the region.

The game will be up because, as Antonia Juhasz pointed out last March in a New York Times op-ed, "Whose Oil Is It, Anyway?":
Iraq's neighbors Iran, Kuwait and Saudi Arabia ... 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.
By contrast, the oil legislation now pending in the Iraqi parliament awards foreign oil companies coveted, long-term, 20-35 year contracts of just the sort that neighboring oil producers have rejected for decades. It also places the Iraqi oil industry under the control of an appointed body that would include representatives of international oil companies as full voting members.

The news that the duly elected government of Iraq is exercising its limited sovereignty to set a date for termination of the American occupation radically undercuts all discussion in the US Congress or by American presidential candidates of how soon the US occupation of Iraq may "safely" end. Yet if, by the same route, Iraq were to resume full and independent control over the world's third-largest proven oil reserves - 200 to 300 million barrels of light crude worth as much as $30 trillion at today's prices - a politically incorrect question might break rudely out of the Internet universe and into the mainstream media world, into, that is, the open: Has the Iraq war been an oil war from the outset?
Of course in spite of all it's talk the Bush administration never wanted a sovereign Iraqi government - they wanted as puppet. It would appear that the Iraqis are not willing to go along.

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