Bush's Iraq Plan: Surge or Gusher?

By Richard W. Behan

As many people have long suspected, George Bush's wars in Afghanistan and Iraq were undertaken to seize control of petroleum resources in the Middle East. Both invasions were conceived and planned long before 9/11, and the "war on terror" was concocted to disguise them.

They have not gone well, but George Bush's "surge" is one last attempt to succeed. It buys time he desperately needs. The President has a window measured in weeks.

The Afghan war overturned the Taliban, to clear the way for the Unocal Corporation to build a pipeline across Afghanistan. (Unocal has since been bought up by the Chevron Corporation.) Afghan President Hamid Karzai was once retained by Unocal as a consultant, but he has been unable to deliver for his former client, in spite of the Bush Administration's willingness to finance the pipeline and defend it with permanent military bases along the route. The warlords, the poppy growers, and the Taliban are steadily regaining control of the country, so the necessary precondition of political stability has vanished.

The Bush Administration today seems to have written off the Afghanistan adventure as a failure: we hear virtually nothing about it, and the pipeline project appears to be dead. (Osama bin Laden meanwhile remains at large, of no apparent interest to the Bush Administration. "I truly am not that concerned about him," Mr. Bush has said.)

The far larger prize is in Iraq, where the war's objective is to claim for American and British oil companies the rich crude resources of the country-some 115 billion barrels of oil, enough to dent seriously OPEC's dominance of world markets. Though the war is tenuous and increasingly bloody, capturing the oil is not yet irretrievably out of reach. (Exxon/Mobil, Chevron/Texaco, Conoco/Phillips, BP/Amoco, and Royal Dutch Shell are the visibly dominant companies in Baghdad today, according to Joshua Holland's recentAlterNet article.)

The strategy for capturing the oil was cleverly designed and purposefully deceitful. First, the nationalized structure of Iraq's oil industry would be abolished, and the oil fields privatized instead. International oil companies (e.g., the five named above) would be invited to "invest" in the oil fields. They would do so by signing Production Sharing Agreements (PSA's), which grant the companies a share of the oil produced, in exchange for their investing in infrastructure. But the prospective "shares" for the oil companies by any standards are unfairly, obscenely large, and the PSA's are irrevocable for 30 years. (The OPEC countries have nationalized their industries-Iraq did so in 1972-but not a single one relies on PSA's; they are tantamount to legalized theft.)

The privatization scheme and the provision for PSA's were worked out in the Bush State Department long before the Iraqi war was launched, and they were inserted into the emerging Iraqi government's tentative procedures by Paul Bremer's Coalition Provisional Authority.

In typical Bush Administration fashion, a smokescreen obscured a repulsive reality. American and British oil companies could capture the bulk of the oil without Iraq technically relinquishing ownership. Then a "war on terror" was launched to make all this happen.

But the invaders were not welcomed as liberators. The "Cakewalk" encountered a determined insurgency. The Mission was not Accomplished. The force-fed "democracy," purple fingers and all, decayed quickly into a tragic sectarian civil war. As American casualties rose arithmetically, Iraq's increased geometrically, until hundreds of thousands of people were dead. And half a trillion dollars have been squandered on this war of lies, deception, and greed.

President Bush seemed paralyzed. The American people withdrew their support for the war in last November's election, clearly seeking substantive and visible new initiatives. Mr. Bush responded the next day, ceremoniously sacking his Defense Secretary-but continuing without interruption his talk of "victory."

Much was hoped for and expected from the Iraq Study Group. Co-chairmen Mr. James Baker and Mr. Lee Hamilton submitted the Final Report of the ISG on December 6, 2006. Acknowledging the disaster in Iraq, it recommended negotiations with Syria and Iran and a pullback of troops.

These initiatives were substantive and visible, certainly, but Mr. Bush rejected them out of hand. The strategic objective of capturing the oil, however, was surreptitiously but unmistakably sustained.

The recommendations of the Baker-Hamilton Commission about the oil sector perfectly mirror the draft policies installed by Paul Bremer. Their Report urges Iraqi leaders to "reorganize the national industry as a commercial enterprise." That's code for privatizing the oil fields. The Commission wants very much to "ensure that best practices are used in contracting." That's code for Production Sharing Agreements. And finally, the Commission encourages "investment in Iraq's oil sector by the international energy companies." And that's code for Exxon/Mobil, Chevron/Texaco, Conoco/Phillips, BP/Amoco and Royal Dutch Shell.

Apparently it was difficult to find qualified people to chair the Iraq Study Group who do not have linkages to the U.S. oil industry. Mr. Hamilton serves on the board of Stonebridge International consulting group, which is advising Gulfsands Petroleum and Devon Energy Corporation about Iraqi and Syrian oil opportunities. Among the clients of Mr. Baker's law firm in Texas are Exxon/Mobil, Chevron/Texaco, and Conoco/Phillips.

The Bush Administration and the Baker-Hamilton Report may be in full agreement about the disposition of Iraqi oil, but their dreams are in serious jeopardy.

The oil companies cannot sign the PSA's until the Iraqi Parliament enacts legislation to codify the proposed structures and processes into law.

The legislation was to have been in place by December of 2006, but the raging civil war has intervened. TheUK Independent, in a stunning series about "blood and oil" published Sunday, January 7, reported Iraqi officials were hoping to have the law enacted by March.

One hundred and fifteen billion barrels of oil are in play here, and the U.S. position at the moment is delicate in the extreme. There is no room for new uncertainties. Withdrawing troops and negotiating with Iran and Syria would introduce huge new variables into the equation, with utterly unknowable outcomes: in exchange for peace, for example, the U.S. might be asked to relinquish its pursuit of Iraqi oil. The President's rejection of these recommended actions is not surprising.

And yet President Bush needs to offer, for political, not military reasons (the Administration has said as much), a gesture of substantial drama, a New Way Forward. His "surge" in troop levels is admirable, but it does not represent a radical shift in prosecuting the war-so it does not inject dangerous uncertainties into the conflict.

That means Mr. Bush can continue the horror in Iraq without much real change, hopefully for at least 60-90 days, during which the Iraqi "democracy" might hold together long enough to pass the oil law. This is chancy, to be sure, but the President has no other realistic option. Then the oil companies can sign their contracts, locking up for 30 years a sizeable portion of Iraqi crude.

President Bush must maintain the status quo in Iraq, no matter how fragile, heinous, and untenable, until the PSA's are signed. After that we can withdraw the troops and undertake other quantum changes.

So for now, he proposes a marginal "surge." Debating the proposal will run some time off the clock. Implementing it will, too. It's a desperation move, but there's nothing else Mr. Bush can do.

Richard W. Behan's last book wasPlundered Promise: Capitalism, Politics, and the Fate of the Federal Lands (Island Press, 2001). Behan is currently working on a more broadly rendered critique,To Provide Against Invasions: Corporate Dominion and America's Derelict Democracy. He can be reached by email at

-CounterPunch, January 11, 2007