What Unites Iraqis: Blocking Western Petroleum Companies From Seizing Control of Their Oil

If passed, the Bush administration's long-sought "hydrocarbons framework" law would give Big Oil access to Iraq's vast energy reserves on the most advantageous terms and with virtually no regulation. Meanwhile, a parallel law carving up the country’s oil revenues threatens to set off a fresh wave of conflict in the shell-shocked country.

Subhi al-Badri, head of the Iraqi Federation of Union Councils, said last month that the "law is a bomb that may kill everyone." Iraq's oil "does not belong to any certain side," he said, "it belongs to all future generations." But Washington continues to push that bomb onto the Iraqi people, calling it a vital benchmark on the road to a fully sovereign Iraq. Democratic Rep. Dennis Kucinich of Ohio accused his own party of "promoting" President Bush's effort to privatize Iraq's oil "under the guise of a reconciliation program."

As is the norm, nobody bothered to ask Iraqis what they thought of the controversy until recently, when a coalition of NGOs and other civil society groups commissioned a poll (PDF) to gauge Iraqis' reaction to the proposed legislation. It found that Iraqis from all ethnic and sectarian groups and across the political spectrum oppose the principles enshrined in the laws. Considering the multiethnic bloodbath we've witnessed over the past four years, it's an impressive display of Iraqi solidarity.

The package of oil laws represent one of the clearest examples of a dynamic that's fueled much of the country's political instability but is rarely discussed in the commercial media. While the war's advocates continue to sell the occupation of Iraq as part of a grand scheme to democratize the region, anything resembling true Iraqi democracy is in fact a tremendous threat to U.S. interests. The law, after all, was not designed with Iraqis' prosperity in mind; plans for throwing the country's oil sector open to (almost) unregulated foreign investment were hashed out by a State Department working group that included major players from the oil industry long before the planning for the invasion itself. These plans were discussed in the White House (under the guidance of Dick Cheney) before that -- even before the attacks of 9/11.

The framework law -- from what we know from a series of leaked drafts -- will hand over effective control of as much as 80 percent of the country's oil wealth to foreign firms with minimal state participation. According to an analysis by the oil watchdog group Platform, Iraq stands to lose tens of billions of dollars in potential revenues under the contract terms being considered.

The administration claims that offering such lucrative terms is necessary given the dire need for investment in Iraq's war-torn oil infrastructure, but those investments could just as easily be made out of Iraq's existing operating budget or financed through loans -- despite the chaos on the ground, Iraq's massive energy reserves would be more than enough collateral for even the strictest lenders.

So while most oil-producing states are moving toward more state control of their energy sectors -- according to the Washington Post, "about 77 percent of the world's 1.1 trillion barrels in proven oil reserves is controlled by governments that significantly restrict access to international companies" -- Iraqi lawmakers are under enormous pressure to go in the opposite direction. (See here for a detailed critique of the framework law.)

It should come as no surprise that Iraqis overwhelmingly reject this arrangement. According to the poll of 2,200 Iraqis released this week, almost two-thirds of Iraqis said they would prefer "Iraq's oil to be developed and produced by Iraqi state-owned companies" over foreign companies. Less than a third favored foreign control -- less than the number who expressed a "strong preference" for the sector to remain under state control.