It’s all about Iraq’s oil – rich, abundant, and coveted by multinational companies waiting to line their deep pockets.
Or so said Rep. Dennis Kucinich Wednesday in an unusual hourlong address on the House floor. He laid out his contention that the White House and Democratic-led Congress are helping oil companies grab a stake in Iraq’s vast oil fields while claiming to be interested merely in winding down the Iraq war.
The claim has brought Kucinich derision within his own Democratic Party. Leaders reject the suggestion that they would help “privatize” Iraqi oil. And Republicans dismiss him altogether, with Republican Party spokesman Dan Ronayne saying, “It sounds like congressman Kucinich is trying to get noticed with a nutty conspiracy theory.”
But elements of Kucinich’s claim appear to be based on theories about geopolitics and oil as much as on any conspiracy.
At the heart of the issue is a measure that, if ratified by the Iraqi parliament, would set the stage for rebuilding the war-torn country’s oil industry. Oil in Iraq, with the world’s third-biggest reserves, could pay for massive reconstruction and modernization.
But Iraq’s pipelines and terminals have been neglected or sabotaged. The industry needs to be rebuilt – yet there is promise, since only 15 of Iraq’s 74 discovered oil fields have been developed, according to a study by Amy Myers Jaffe, a fellow in energy studies at Rice University in Houston.
Who should develop that? What role should Baghdad play and what role should provincial governments have? If private industry helps, how should it be rewarded?
The framework for answering these questions is in the bill before the Iraqi parliament – a bill that’s been gaining detractors in Iraq. Some members of Congress – but not Kucinich – say it or some other so-called hydrocarbon act could serve as a benchmark for Congress and the administration to measure Iraq’s progress. It could be a measure on which to base eventual withdrawal of American troops.
But the measure itself is mired in disagreement in Iraq, with Sunnis and Kurds differing on the central question of provincial versus central control. Some in Iraq also see the measure as a way for Western corporations to gain control through revenue- sharing provisions.
“Everyone knows that the oil law does not serve the Iraqi people, and that it serves Bush, his supporters and the foreign companies at the expense of the Iraqi people who have been wronged and deprived of their right to their oil despite enduring all difficulties,” Hasan Jum’a Awwad, head of the Iraqi Federation of Oil Unions, said in a May 12 letter to Democrats in the U.S. Congress.
There’s another view. Iraq’s oil industry is in shambles. It needs help, but outside experts keep getting killed. Multinational oil companies, whose shareholders expect a return on investment, could help.
Iraq could go it alone, but getting higher oil output could require hard decisions, including “possible under-investment in other areas of the country’s economy,” Jaffe’s analysis said. Iraq needs up to $10 billion to restore production to pre-war levels, she said, and more than $20 billion – “a major investment program” – to raise output to about 5 million barrels a day, the high end of its historical production levels.
“If it is decided that higher levels of production are desired,” Jaffe wrote, “it is inevitable that the potential role of outside in vestors and lenders will loom large.”
While that does not mean companies would give their resources and expertise out of charity, Karen Matusic, a spokeswoman for the American Petroleum Institute, says it does not mean privatization, either. She asks why Kucinich would not want to help Iraq, which lacks the tools.
“They don’t have the kinds of funds or even technology needed to develop those fields,” she said.
Sen. George Voinovich, an Ohio Republican, shares that view.
“That oil is capital,” and all sides in Iraq need it, said Voinovich spokesman Chris Paulitz.
Kucinich agrees with the sentiment. But he worries it won’t work out that way.
“It’s clear,” he said, “that the people of Iraq are under enormous pressure to give up their oil.” The Plain Dealer