Blood for Oil

Someone's gonna get paid:

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat. [...]

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

I think the evidence is clear that the Bush administration went to war in Iraq because it's run by crazy people. The oil money more plausibly comes into play in explaining the desire to stay at war forever. After all, these companies (or their corporate ancestors) had oil contracts in Iraq in the past and now they're getting them back "36 years after losing their oil concession to nationalization as Saddam Hussein rose to power." Nationalization, you see, is a substantial risk of doing business -- especially natural resource business -- in unstable countries. But a given government is much, much, much less likely to nationalize western countries' assets if it's dependent on external U.S. military support and especially if its security services are nicely enmeshed with the U.S. military.

Our troops can "curb Iranian influence" and provide "stability" all of which is good for business. But don't call it imperialism, we're there to help!

Comments

... we're there to help ourselves."

Fixed.

Posted by Tim H. | June 19, 2008 9:46 AM

I guess, given his youth, Matt can be excused for this bit of childishness.

Oil is currently the lifeblood of the world economy whether or not we wish this to be true. A stable supply is crucial in determining whether we'll have a long glide path to alternate energy sources, or a world depression with associated wars and chaos. This is why countries like South Korea and Japan along with most of the other important industrialized democracies supported the invasion to overturn Saddam, and even autocracies like Russia and China were prepared to go along before France, much to their bemusement, decided to pull the plug. Of course, the giant deal Saddam signed with Total/Fina/Elf to develop fully one third of Iraq's vast reserves might have had something to do with that.

It is far less important who participates in the development of Iraq's reserves than that they be developed and put on the world market, where attentive readers may note that they are purchased rather than "grabbed".

Posted by robert powell | June 19, 2008 9:52 AM

Nationalization, you see, is a substantial risk of doing business -- especially natural resource business -- in unstable countries.

Not true, historically. A Strongman who nationalizes oil brings relative stability to an unstable region, and buying into a cartel ups the profit. When Iraq (or anyone else) nationalized oil, did they just hire their own people to get the job done or bring in Bigass Oil Countries?

Posted by ed | June 19, 2008 9:56 AM

Assignment desk: Why WOULDN'T nations nationalize their oil industry moving forward instead of cutting deals with stateless corporate oil giants? It seems like a smart national security move at the very least. Nevermind the billions of dollars lost to corporate interlopers that seep outside the country. Why subsidize the corrupt oil executives? That money could be spent on internal domestic corruption!

Posted by joejoejoe | June 19, 2008 10:01 AM

the Bush administration went to war in Iraq because it's run by crazy people

This could be taken in more than one way, depending on the antecedent of "it's". I assume you mean the Bush administration is run by crazy people. If so, you are ducking the question of why we invaded Iraq. The Bush administration isn't so so crazy that they invaded Iraq for no reason at all other than their own crazyness.

Posted by cs | June 19, 2008 10:05 AM

I think the evidence is clear that the Bush administration went to war in Iraq because it's run by crazy people.

If that's really what you believe, you are useless as a political commentator.

The oil money more plausibly comes into play in explaining the desire to stay at war forever.

This makes no sense. We wanted to get the oil money out of Saddam's hands, and now we have. That was the entire point of the war.

But a given government is much, much, much less likely to nationalize western countries' assets if it's dependent on external U.S. military support and especially if its security services are nicely enmeshed with the U.S. military.

Indeed. It is also much less likely to undertake a military buildup and threaten its neighbors if it's dependent on external U.S. military support and especially if its security services are nicely enmeshed with the U.S. military.

Why WOULDN'T nations nationalize their oil industry moving forward instead of cutting deals with stateless corporate oil giants?

Because "stateless corporate oil giants" have years of experience with the oil business and can probably manage the oil fields better than corrupt Middle East bureaucrats. Privatizing usually provides more money to the government than nationalization, and the oil companies earn their profits off better performance.

Posted by right | June 19, 2008 10:10 AM

I think robert powell reducing Matt's opinion to being young is ridiculous. There are perfectly legitimate reasons to not think that oil is so important to us that we must infinitely commit both financial and human resources to a small chunk of land that may or may not help the world get by for a few decades. You could first argue that there is very little benefit to enabling further oil consumption for climate change and peak oil reasons. Or you could simply argue that an infinite presence will likely piss people off in a way that's much more harmful to the West than more expensive gasoline.

But none of this has to do with age.

Posted by Brent | June 19, 2008 10:11 AM

You make it sound as if imperialism is a bad thing?

Posted by gordon gekko | June 19, 2008 10:13 AM

Oil is currently the lifeblood of the world economy whether or not we wish this to be true. A stable supply is crucial in determining whether we'll have a long glide path to alternate energy sources, or a world depression with associated wars and chaos.

That might be true, but it's essentially irrelevant to what I take to be Matt's point, which is simply that the oil is a big unspoken motive here.

If the case for staying in Iraq was being made in terms of guaranteeing a stable supply of oil, then fine, we could all have a sensible discussion about it, and see if there were ways to guarantee that supply without occupation, whether the occupation money might be better spent on reducing energy consumption at home, etc. etc. But I don't think we're there yet.

Trying to start that discussion seems to me to be the grown-up thing to do.

Posted by Pete Tiarks | June 19, 2008 10:18 AM

Is the 911 was a controlled demolition post far away?

Posted by Dave | June 19, 2008 10:20 AM

It's not just about the money; it's about the political and military control. Yes, there is an interest in making sure that as much as possible of the cash that flows out of our pockets to purchase petroleum ultimately flows back into our own economy. The willingness of the Saudis, for example, to invest so many of their petrodollars over the years into the US economy is one of the foundations of the US-Saudi relationship.

But equally important is the interest in seeing to it that control of vital petroleum resources lies, to the extent possible, in the hands of various interdependent friendlies. British and American oil companies, and a new dependent client government in Iraq, count as friendlies. Russians and Chinese? Not so much.

There is also an interest in seeing to it that the US is able to maintain an intimidating, power-projecting military presence and footprint in the vicinity of important places like Basra, the Persian/Arabian Gulf, Saudi Arabia's Eastern Province. Any future attempt by Opec or other powerful sub-blocs of Middle East oil producers to shut down supplies and use energy as a policy weapon can be met with military force.

This is why the US is not going anywhere, no matter who is elected. The "war" will be probably wound down more quickly under Obama than under McCain; but the US presence was intended to be more-or-less permanent. The US is now deeply dug in, and has sunk a massive investment into creating the infrastructure and political basis for this permanent presence. It's is hard for me to imagine Obama bucking the entire US imperial system, digging out entirely and simply writing off all those sunk costs. Say hello to the new Middle East "jewel in the crown".

Posted by Dan Kervick | June 19, 2008 10:43 AM

"The oil money more plausibly comes into play in explaining the desire to stay at war forever."

Well duh. Bush said so himself.

Posted by freddiemac | June 19, 2008 10:53 AM

Oil is currently the lifeblood of the world economy whether or not we wish this to be true. A stable supply is crucial in determining whether we'll have a long glide path to alternate energy sources, or a world depression with associated wars and chaos. This is why countries like South Korea and Japan along with most of the other important industrialized democracies supported the invasion to overturn Saddam, and even autocracies like Russia and China were prepared to go along before France, much to their bemusement, decided to pull the plug. Of course, the giant deal Saddam signed with Total/Fina/Elf to develop fully one third of Iraq's vast reserves might have had something to do with that.
It is far less important who participates in the development of Iraq's reserves than that they be developed and put on the world market, where attentive readers may note that they are purchased rather than "grabbed".

I agree with Robert Powell, but as a liberal hawk (i.e. anti-dictator) I'll admit this looks bad. Wonder if Maliki's tough negotiations on the Force Agreement is tied in with this.

Posted by Peter K. | June 19, 2008 10:57 AM

It is ironic that Chinese oil companies are given the snub in this deal considering China is the one paying for the war and occupation.

Posted by Davebo | June 19, 2008 11:11 AM

I think robert powell reducing Matt's opinion to being young is ridiculous. There are perfectly legitimate reasons to not think that oil is so important to us that we must infinitely commit both financial and human resources to a small chunk of land that may or may not help the world get by for a few decades. You could first argue that there is very little benefit to enabling further oil consumption for climate change and peak oil reasons. Or you could simply argue that an infinite presence will likely piss people off in a way that's much more harmful to the West than more expensive gasoline.
But none of this has to do with age.
Posted by Brent

Obviously, you are young and ignorant Brent if you think the global oil supply is not important. You are at best naive.

Nor are your choices simply being in Iraq - or just paying for more expensive gasoline. There is the increasing possibility that the global market will collapse, countries only selling to those they like or fear...and citizens and businesses being rationed oil, other stategic items, even food items. And "unproductive" industries and certain jobs that add little value to the economy but involve lots of oil usage - may not be allocated oil rations at all.

We are only recently in an era where we have open markets and only price determines where stuff goes globally. We had massive rationing in WWI, the 30s, WWII, rationing of medicines and high tech electronics in the 50s, and the 70s had the soybean embargos and Japan, Indonesia, and Thailand rationing rice. China and Vietnam are now holding back rice and fish from export so their people can get it at an affordable price.

Posted by chris ford | June 19, 2008 11:23 AM

It is ironic that Chinese oil companies are given the snub in this deal considering China is the one paying for the war and occupation.

That what I was thinking when I read what the distressingly self-assured peacenik Dan Kervick wrote:

"But equally important is the interest in seeing to it that control of vital petroleum resources lies, to the extent possible, in the hands of various interdependent friendlies. British and American oil companies, and a new dependent client government in Iraq, count as friendlies. Russians and Chinese? Not so much."

Dean Baker had a good post on the Chinese the other day:

Is China's Central Bank Run By Fools?

That is the question that the NYT should have been asking in an article that reports that China's WTO representative complained that the United States "had failed to safeguard the value of its currency, worsening the pain for people around the world who pay high oil and food prices in dollars."

Did the Chinese really not understand that when they were buying several hundred billions of dollars a year worth of U.S. financial assets that they were propping up the dollar? This would imply unimaginable ignorance about financial markets. It would be comparable to the Saudis not realizing that their oil output affects world oil prices or Microsoft not realizing that it can affect the price of computer operating systems.

The fall in the dollar is not raising the cost of any products for any country that does not choose to link its currency to the dollar. Items cost more money measured in dollars, but other currencies would rise against the dollars (other things equal) unless they have opted to link their currency to the dollar.

The article should have pointed out to readers that the pain noted by China's WTO representative only would result to countries that chose to link their currency to the dollar, it is not a result of the falling dollar per se.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=06&year=2008&base_name=is_chinas_central_bank_run_by

My thoughts are that the Chinese are signalling they might move out of dollars to a degree soon if something isn't done. They know what's up. With the possibility of the Ukraine and Georgia joining NATO, Russia isn't as much a concern.

Posted by Peter K | June 19, 2008 11:27 AM

Saddam Hussein was perfectly happy to sell oil, as much as he could, actually, keeping as much for himself as he could. In fact, that was a big issue with his trying to evade oil for food sanctions. There is no reason to think he would not have continued to develop and sell as much oil as possible. It is an interesting footnote that one of first things the U.S. occupation government did was rejoin OPEC, a cartel whose purpose is limiting production to influence prices.
Now that a new government is nominally responsible and the oil industry has to be rebuilt, the questions are under what terms and who benefits. The legislature has had a hard time coming up with a new oil law, and it is easy to understand why. There is a dispute over how much of the revenue should go to "Iraq" and how much should go to the foreign oil companies and how to choose which foreign oil company.
An interesting point as to this latest story is this is an attempt to circumvent the need for a new oil law. Instead the Iraqi government will only purchase oilfield services, but will pay in oil. This is just a royalty by another name.
I do not know if this was the only or sufficient motivating reason for the war policy, but it is should be very obvious that many interest in the government and industry knew it would be one of the main benefits.

Posted by Doug | June 19, 2008 11:46 AM

Well, the crazies have certainly made a lot of money on the war so far, starting with the construction firms that built the archipelago of American bases.

The oil firms, though, have benefited only indirectly, from the Bush administration's willingness to take oil - the lifeblood of the world economy" - and play with it like a demented seal playing with a beach ball. The "crazy" part of the Persian Gulf policy is that it is not only vicious and immoral, but it is also against the material interests of the U.S. Which interests would be served by brining all the Shiite oil - Iraq and Iran - online as a hedge and competition to the Saudis. Call me crazy, but the flood of money going to a society that incubates Osama bin Laden's mindset as a norm - the difference between Al qaeda and the establishment Saudi view of the world being a quibble about policies, but not about ideology - seems, uh, crazy, stupid and bound to blow up in the American face.

Long ago, the Bush administration signalled it was shifting to support SCIRI in Iraq. This might have seemed like a puzzling shift, since SCIRI is a Khomeinist organization with deep and enduring ties to hardliners in Iran. But the bet was always that SCIRI's leadership was pro "free enterprise" - which of course has nothing to do with freedom or enterprise, but has everything to do with willingness to sell to the GOP's underwriters, the petro-mafia of oil companies. This is the first fruit of that policy. Another arm of that policy will be massacring enough of Sadr's followers to shift the results of the elections in October. I thought this part was bound to fail - but now I'm not so sure. The Badr brigade has shown a lot more tactical cleverness, besides receiving American help. It is very possible that Hezbollah's great ally will begin phase two, destroying opposition among the Shi'ites. Which, of course, will be reported in the American press - which is, more properly, a huge lobbying group for neo-con foreign policy - as a great triumph for the Iraqi "government". Huh, I guess that description would fit Saddam Hussein's massacre of the Shi'ites in 91-92 too.

The endlessly criminal Bush White House is limited, in its actions, by its global stupidity. In terms of America's interests, they have injured them in ways we haven't begun to measure. But in terms of their own interest - global peculation and the pursuit of vanity wars as a sort of CEO circle jerk, a status symbol in the pecking order - they are doing wonderfully.

Posted by roger | June 19, 2008 12:17 PM

Even if purpose of the war wasn't to get more profitable access to Iraq's oil than could have been obtained through peaceful means, even if the Bush Adminstration was simply full of crazy people, this particular war would not have been fought if the Middle East wasn't full of oil. Without oil, the Arabian Peninsula and Persian Gulf wouldn't be any more compelling than Darfur. The administration wouldn't have any more interest in protecting Iraq's neighbors than they have in protecting Sudan's.

It might be true that no one drove this decision with a simple "invade Iraq, seize oil for Chevron" calculus, but everything geopolitical in that region is ultimately about oil.

Posted by Bob | June 19, 2008 12:29 PM

Whether directly (as in making sure US oil companies get access to what had been nationalized Iraqi oil), or indirectly (we need a military presence in the region with the most strategically important natural resource that also happens to be dwindling), the Iraq war was 100% about oil. It's the root cause of the lunacy that took hold of the White House. Because even the crazies can't say in polite company that we're going to appropriate another nations natural resources (or ensure our access to it) they had to do what unscrupulous people do in situations where the truth won't get you what you want: lie.

I'll just add that it's not just about Iraqi oil. There's kind of a lot the stuff in all of the nations bordering on Iraq, so having a military presence in the region is also about ensuring access to all of the oil in the region. But, again, it was and is ENTIRELY about oil.

Posted by Vincent | June 19, 2008 12:55 PM

Good grief, Charlie Brown... this willful blindness among certain progressive thinkers (includin' Matt, unfortunately) is very hard to understand. Various western powers (well, the US and the UK) haven't been intervening in the Persian Gulf region for 100-odd years because they like the picturesque ruins. Of course the oil is the motivation. Always has been.

And the Bush administration isn't made up of crazy people. It's made up of corrupt, greedy, dishonest people. I rather think that distinction is an important one.

Posted by Medium Dave | June 19, 2008 12:59 PM

Good grief, Charlie Brown... this willful blindness among certain progressive thinkers (includin' Matt, unfortunately) is very hard to understand. Various western powers (well, the US and the UK) haven't been intervening in the Persian Gulf region for 100-odd years because they like the picturesque ruins. Of course the oil is the motivation. Always has been.

And the Bush administration isn't made up of crazy people. It's made up of corrupt, greedy, dishonest people. I rather think that distinction is an important one.

Posted by Medium Dave | June 19, 2008 1:02 PM

I disagree with Matt. It was always about the oil. There was no other compelling reason to go to Iraq. Every justification we were given was a lie, because saying "We're going in for the oil" would have been a difficult sell. Not impossible, but much more difficult than "Democracy, whiskey, sexy."

Posted by The Raven | June 19, 2008 1:16 PM

Matt - do you know if there are any plans by the admnistration sign an Investment Treaty with Iraq?

Posted by blah | June 19, 2008 1:24 PM

@Medium Dave -- it's not that hard to understand.

Progressives own a piece of this action, little as they want to admit to it. If the reason to invade was madness, there's no need to figure it out, and everyone can keep up the "we wuz fooled, darn that intelligence community" charade. If the reason to invade was madness, then hanging around for four more years -- not forever! just quadrennial increments while we work through the complexities! -- can be part of the grown-up foreign policy change we can believe in and not a continuation of the same damn policy.

Posted by Executed Today | June 19, 2008 1:33 PM

In response to Robert Powell: It is far less important who participates in the development of Iraq's reserves than that they be developed and put on the world market, where attentive readers may note that they are purchased rather than "grabbed".

http://www.worldwatch.org/node/5666

"Thanks to skyrocketing oil prices, many oil companies again enjoyed record profits in 2007. Chevron Corporation posted a company-best $18.7 billion in profit, while Royal Dutch Shell PLC reported a near-best $31.3 billion.28 Exxon­Mobil Corporation, the world’s largest publicly traded oil company, posted a 2007 net income of $40.6 billion, the single largest annual profit in U.S. corporate history.29

The long-term future of oil companies may not be so bright, however. ExxonMobil reported a decline in oil and natural gas production in 2007, and many companies are finding it hard to replace their reserves. Not only have the largest oil fields already been developed, most of the promising prospect areas are controlled by state-owned oil companies, which hold 80 percent of the world’s proven oil reserves."

It is very important to the future of US oil companies that they get preferential access to Iraqi oil. That is a good part of the reasons why this war was fought.

Posted by Arun | June 19, 2008 1:55 PM

In response to Robert Powell: It is far less important who participates in the development of Iraq's reserves than that they be developed and put on the world market, where attentive readers may note that they are purchased rather than "grabbed".

http://www.worldwatch.org/node/5666

"Thanks to skyrocketing oil prices, many oil companies again enjoyed record profits in 2007. Chevron Corporation posted a company-best $18.7 billion in profit, while Royal Dutch Shell PLC reported a near-best $31.3 billion.28 Exxon­Mobil Corporation, the world’s largest publicly traded oil company, posted a 2007 net income of $40.6 billion, the single largest annual profit in U.S. corporate history.29

The long-term future of oil companies may not be so bright, however. ExxonMobil reported a decline in oil and natural gas production in 2007, and many companies are finding it hard to replace their reserves. Not only have the largest oil fields already been developed, most of the promising prospect areas are controlled by state-owned oil companies, which hold 80 percent of the world’s proven oil reserves."

It is very important to the future of US oil companies that they get preferential access to Iraqi oil. That is a good part of the reasons why this war was fought.

Posted by Arun | June 19, 2008 1:58 PM

The importance of possessing leverage over what George Kennan called the world's greatest strategic prize seems too obvious to explain.

Posted by Mark | June 19, 2008 2:06 PM

"even autocracies like Russia and China were prepared to go along (with a UN mandated invasion of Iraq) before France, much to their bemusement, decided to pull the plug."

My God, you trolls are lazy bastards. I thought that rotten old canard about France had been dropped years ago, but you people just can't help rooting through that Discarded Crap bin, can you?

For the multi-millionth time, back in 2002 France agreed (along with the rest of the UN Security Council) to pass Resolution 1441 (to pressure Iraq into letting the inspectors in so they could confirm or deny US and UK claims that they had illegal WMD) on the condition that 1441 had no automatic 'trigger' that would authorise the use of force. 1441 said that the inspectors would carry out their inspections, and then the UNSC would hear their verdict before deciding if it was necessary to pass a 2nd Resolution authorising the use of force.

Remember? It was in all the papers at the time?

Six months or so later, the inspectors were reporting that all the intel they'd recieved from the US and UK was basically full of crap. They were finding nothing (as the post-invasion US effort to find WMD would likewise find nothing) and needed another month or two to confirm that Iraq really had complied with the post-Gulf War demand that they dismantle their WMD arsenal. Thus making an invasion unneccesary.

Go and google it. Go on..... done yet? I'll continue.

The US and UK panicked, seeing their chances of getting the UN to rubber-stamp their invasion fading away, and started putting intense pressure on the smaller nations sitting on the UNSC to back them in voting for a bullshit "moral" 2nd Resolution which would pretend that 1441 authorised the use of force if a majority of UNSC member-states said it did.

Still with me? Ringing any bells? Well hold on, here's the kicker.

The French, after getting their ears bent by a lot of these smaller states complaining about the bully-boy tactics the US and UK were using on them, basically stepped up and said that the US and UK might as well stop being arseholes about all this, because, y'know, France had a veto, and would use it to stop he US and UK from violating the very UN Resolution that THEY'D written only a few months earlier.

Cue Washington and London screaming that France had sworn to veto ANY use of force, followed by an illegal invasion.

I can't believe you don't remember that. In fact, I don't believe you don't remember that.

I do, however, believe that you're a wingnut troll who would happily push any bullshit talking-point regardless of how untrue it is. Because, that's what you people do, n'est pas?

New talking-points, puh-leeze!

Posted by Tony J | June 19, 2008 2:40 PM

I don't think the Bush war administration was driven into Iraq by "crazy people." It was a risky strategic gambit that they see paying off in the current commercial and political/security agreements. What is happening resembles the 1920s-1950s colonial pattern of oil concessions backed by military force and cooperative local quislings. This agreement culminates the reversal of the 1958 revolution and 1971 nationalization of Iraq's oil. So it's a win for Bush. The devastation of the Iraqi people and the horrible cost to our own troops never have carried much weight in the calculations.

Posted by Maine Owl | June 19, 2008 3:00 PM

http://www.yale.edu/strattech/92dpg.html

The following is point 6 quoted in full from a Pentagon document prepared in 1992 at the behest of Paul Wolfowitz:

"In the Middle East and Southwest Asia, our overall objective is to remain the predominant outside power in the region and preserve U.S. and Western access to the region's oil."

The language was subsequently watered down, supposedly in a compromise involving Colin Powell and Dick Cheney, to include "safeguard our access to international air and seaways and to the region's oil."

Posted by Steve S. | June 19, 2008 3:07 PM

"I do, however, believe that you're a wingnut troll who would happily push any bullshit talking-point regardless of how untrue it is. Because, that's what you people do, n'est pas?
New talking-points, puh-leeze!"

Bullshit. Saddam could have allowed the inspectors free access, but he didn't because he was bluffing and was looney tunes.

Why does the "anti-war" left have so much sympathy for a dictator like Saddam Hussein? My view is that it's anti-Bush disease.

Posted by Peter K. | June 19, 2008 4:33 PM

Saddam could have allowed the inspectors free access, but he didn't because he was bluffing and was looney tunes.

Peter, I know you were busy fetching drinks for Mr. Hitchens during the build up to war, and hence when talking about that period have to rely on your imagination, but some people actually were paying attention. Please stop making things up.

Posted by 23456 | June 19, 2008 6:09 PM

Robert Powell in essence claims that the US went to Iraq to free up Iraq's oil. This is in fact what the neocons wanted to do.

Bush works more for the oil companies than the neocons, however. The oil companies, as Greg Palast has demonstrated with documents and names, shut that concept down. They wanted Iraq's oil OFF the market, to drive up the price. Iraq will adhere to OPEC's price and production levels and will do nothing to disrupt the oil companies profits.

Greg Palast » Bush Didn’t Bungle Iraq, You Fools
http://www.gregpalast.com/bush-didnt-bungle-iraq-you-fools/

t r u t h o u t | Greg Palast | Keeping Iraq's Oil in the Ground
http://www.truthout.org/docs_2006/061406J.shtml

Obama's Secret War Profiteering Tax
http://www.ourfuture.org/blog-entry/obamas-secret-war-profiteering-tax

Money Quotes from the last piece:

I wish to hell the Democrats would call their plan what it is: A war profiteering tax. War is profitable business – if you’re an oil man. But somehow, the public pays the price, at the pump and at the funerals, and the oil companies reap the benefits.

Indeed, the recent engorgement in oil prices and profits goes right back to Bush-McCain “surge.” The Iraq government attack on a Basra militia was really nothing more than Baghdad’s leaping into a gang war over control of Iraq’s Southern oil fields and oil-loading docks. Moqtada al-Sadr’s gangsters and the government-sponsored greedsters of SCIRI (the Supreme Council For Islamic Revolution In Iraq) are battling over an estimated $5 billion a year in oil shipment kickbacks, theft and protection fees.

The Wall Street Journal reported that the surge-backed civil warring has cut Iraq’s exports by up to a million barrels a day. And that translates to slashing OPEC excess crude capacity by nearly half.

Result: ka-BOOM in oil prices and ka-ZOOM in oil profits. For 2007, Exxon recorded the highest annual profit, $40.6 billion, of any enterprise since the building of the pyramids. And that was BEFORE the war surge and price surge to over $100 a barrel.

It’s been a good war for Exxon and friends. Since George Bush began to beat the war-drum for an invasion of Iraq, the value of Exxon’s reserves has risen – are you ready for this? – by $2 trillion.

Obama’s war profiteering tax, or “oil windfall profits” tax, would equal just 20% of the industry’s charges in excess of $80 a barrel. It’s embarrassingly small actually, smaller than every windfall tax charged by every other nation. (Ecuador, for example, captures up to 99% of the higher earnings).

Nevertheless, oilman George W. Bush opposes it as does Bush’s man McCain. Senator McCain admonishes us that the po’ widdle oil companies need more than 80% of their windfall so they can explore for more oil. When pigs fly, Senator. Last year, Exxon spent $36 billion of its $40 billion income on dividends and special payouts to stockholders in tax-free buy-backs. Even the Journal called Exxon’s capital investment spending “stingy.”

At today’s prices Obama’s windfall tax, teeny as it is, would bring in nearly a billion dollars a day for the US Treasury. Clinton’s plan is similar. Yet the press’ entire discussion of gas prices is shifted to whether the government should knock some sales tax pennies off the oil companies’ pillaging at the pump.

Posted by Richard Steven Hack | June 19, 2008 6:09 PM

Did anyone notice this whopper in troll robert powell's post?

A stable supply is crucial in determining whether we'll have a long glide path to alternate energy sources, or a world depression with associated wars and chaos.

So in trollword, we went to war with Iraq, incurred costs of over $1 trillion, caused the deaths of over 100,000 people, created chaos and showed the world that torture is goooood while spending a pittance on alternate energy sources in order to avoid...wars and chaos. Wow, that is impressive logic.

To a troll, every time someone dies as a result of USG policy the world becomes more stable. By definition.

Posted by SB | June 19, 2008 6:34 PM

Oil was and is a crucial, but not the only, factor here. Minus oil Iraq wouldn't have mattered much in the past or today, but with oil it represented the most substantive challenge to the international post-war security architecture since 1950, and remains an unavoidable issue.

Following the invasion, rape, and annexation of Kuwait, the UN resolved that Iraq's action would be reversed, and "the region restored to peace and stability". It was agreed that this required Iraq's compliance with the ceasefire and subsequent related Chapter VII Resolutions:

" Resolution 687, like subsequent Resolutions, requires cooperation from Iraq. But such was often witheld. Iraq appears not to have come to a genuine acceptance, even today, of the disarmament demanded which it needs to carry out to live in peace."--Hans Blix, January 27, 2003.

France decided, unilaterally and destructively according to her current Foreign Minister Bernard Kouchner, that "final opportunity" translated as "one more chance ad infinitum", and "serious consequences" as "yet more unenforced Resolutions". Chirac gave Saddam false assurances that he would be protected, ruining the last chance of resolving the issue without the invasion which was poised dangerously on the edge of the Arabian Peninsula with summer coming on, not that such considerations occur to those who would have preferred a victory for Saddam.

Posted by robert powell | June 19, 2008 6:59 PM

Once again, Powell is arguing, in true neocon fashion, that we need to rape Iraq in order to control the oil. He just pretties up the language a little bit.

He also ignores the fact that had the UNSCOM inspectors been given just a couple more months, they would have certified Iraq as WMD-free and then a monitoring program - subject to the same UN resolutions - would have been put in place which would have prevented Iraq from ever having nukes.

He also cherry picks quotes from Hans Blix.

Powell as usual ignores all facts except for his neocon fantasies.

Posted by Richard Steven Hack | June 19, 2008 7:47 PM

http://www.lib.ndsu.nodak.edu/blogs/council/wp-content/uploads/2007/05/6_22_bush_mission_banner1.jpg

Posted by scythia | June 19, 2008 8:35 PM

"Following the invasion, rape, and annexation of Kuwait,"

History is cruel but not without a sense of irony. Naturally the baathist Robert Powell circa 1991 described the invasion of Kuwait in the same terms that the American Robert Powell circa 2008 describes the invasion of Iraq: a necessary war to promote the free marketing of oil, promote secularism and secure world peace. And no doubt the baathist Robert Powell would describe the invasion of Iraq just as the American Robert Powell does the invasion of Kuwait: rape, exploitation, annexation.

What's missing here is consistency--of a sort: both Bob Powells love peace, human rights and the right of nations to determine the usage of their own resources--when such goods are being violated by the actions of official enemies. But when it's their particular government doing the "invading, raping and annexing", then, well, no excuse is left unmade: "Kuwait/Iraq posed a major threat to world peace; Kuwaiti/Iraqi oil must be made available to the world market; the regressive Kuwaiti/Iraqi society must be transformed; etc etc etc."

Such a farce.

Posted by Mark | June 19, 2008 9:40 PM

Robert Powell:

Oil was and is a crucial, but not the only, factor here.

Exactly right. The more racist among us supported the war because they felt they were being jerked around by Arabs.

Robert, why do you think you were referred to here as "Bobbitt"? I'm genuinely curious.

Posted by 23456 | June 19, 2008 9:41 PM

As usual, posters with little or no actual knowledge focus on personal attacks--when you don't have a respectable argument, just attack anyone who does! Stay classy, guys.

For what its worth, I'm on record opposing Reagan's "tilt towards Iraq", which though vastly over-rated in practical terms by anti-American propagandists was in fact a moral failure; and like most voters supported the invasion of Iraq in 1991. I also thought we should have finished the job then rather than continue to torture the Iraqi people for the next twelve years by leaving Saddam Hussein in power AND subjecting that nation to the criminal sanctions regime.

Posted by robert powell | June 20, 2008 4:08 AM

For what its worth, I'm on record opposing Reagan's "tilt towards Iraq"

On record where, exactly?

Posted by 23456 | June 20, 2008 8:19 AM

In his own mind - along with his "legend".

Posted by Richard Steven Hack | June 20, 2008 5:24 PM

hmmm. well, I read them all. You know alot more than I know. Just thought I'd offer one thought- I think the original writer (Tim) meant the Iraqis were the crazy ones. Somehow some of us thought he meant Bush and the oil buddies were 'crazy'. If so, they were/are crazy like foxes. With YOUR money and YOUR sons and daughters. BTW- who knows where the oil money's going? Somebody does- and apparently they're not talking...

PS, I do think there is a bit of craziness in us all...to even be where we are in this mess today. Bush and his pals are the ones who know what they're doing, and how. We are the responders to their actions- bound to fight amongst ourselves, because we just don't 'know'. Meanwhile, they're sitting back laughing, having a drink and smoke, counting their money- that used to be ours.

Does anyone recall what events came with the Bush regime? Enron and California Electricity issues. Almost as if they waited to see who got into powwer- and when it was 'their man', it was time to blow the story. Again,. I'm sure you know more than me about that.

Posted by willy | June 29, 2008 11:10 PM