Listening to the President’s press conference just now, something caught my ear. In discussing the new “strategy forward,” in Iraq, Bush mentioned that a key to unifying the country would be getting Iraq’s new oil law passed. The idea is, I imagine, that once Iraq’s new government has figured out how to equitably share oil revenues among various factions, everyone’s going to get along just fine.
One doesn’t need to “imagine” what the idea is, because it’s been spelled out quite clearly right here at Econbrowser as well as by the Iraq Study Group. I can forgive Mr. Hayes for not reading Econbrowser (actually I can’t, but that’s my problem, not his), so let me again recommend the analysis contained in the ISG report. To quote from the ISG:
Oil production and sales account for nearly 70 percent of Iraq’s GDP, and more than 95% of government revenues [page 22].
That to me means that any vision of how to get jobs for Iraqis or a government that can accomplish anything is absolutely and critically dependent on the health of Iraq’s oil sector. Here’s the ISG’s summary of the problems:
Problems with oil production are caused by lack of security, lack of investment, and lack of technical capacity. Insurgents with a detailed knowledge of Iraq’s infrastructure target pipelines and oil facilities. There is no metering system for the oil. There is poor maintenance at pumping stations, pipelines, and port facilities, as well as inadequate investment in modern technology…. Foreign companies have been reluctant to invest, and Iraq’s Ministry of Oil has been unable to spend more than 15 percent of its capital budget [page 22].
Even if Iraq were at peace tomorrow, oil production would decline unless current problems in the oil sector were addressed [page 56].
But where is the necessary investment capital going to come from, when it’s not even clear who has the authority to approve anything that’s implemented? Hence the ISG’s recommendation:
As soon as possible, the U.S. government should provide technical assistance to the Iraqi government to prepare a draft oil law that defines the rights of regional and local governments and creates a fiscal and legal framework for investment. Legal clarity is essential to attract investment [page 56].
What disturbed me most about Christopher Hayes’ analysis was his suggestion that President Bush’s urging of Iraq to develop a new oil law was inspired not by the above considerations, but instead had the goal of benefiting U.S. oil companies:
Of course, along with bringing Iraqis together, the new law might just also provide a boon to American energy companies A win-win!
…It’s fairly clear that Bush is not going to withdraw from Iraq no matter what happens. Part of this is due to the fact that he has decided that as long as we stay in Iraq we can’t lose the war, and he doesn’t want to lose. But there’s also the not-so-minor fact that if we withdraw from Iraq we’ll have a hard time establishing permanent bases and may not have any secure access to the country’s oil.
So why is it the word oil never crossed the lips of any of the reporters at today’s press conference?
Now this is my position– if Iraq is unable to pass an oil law, that will mean thousands of additional deaths of Iraqi civilians and U.S. soldiers. Analyses such as that from Mr. Hayes make it less likely that an oil law will be passed. And yet, although that is how I see the situation, I do not declare that Mr. Hayes’ motive is to try to cause additional unnecessary bloodshed. Instead, I am inclined to assume that he simply sees the world differently than I do, and does not share my belief that an oil law would help solve any problems.
But why then does Mr. Hayes assume that Bush’s motive for promoting an oil law is anything other than trying to solve the very huge problems there?
Although I do not believe that Mr. Hayes thinks of himself as doing his part to prolong and deepen the conflict, from my view of the situation, anything that undermines the prospects for successfully developing an Iraq oil law has exactly that effect. The thesis that he advocates– the claim that America’s motives in Iraq were to acquire oil rather than overthrow an evil regime– is something that the Bush Administration must be prepared to fight just as energetically as it takes on insurgents and their IEDs. The ISG also recognized the vital need to combat such perceptions, but its recommended solution strikes me as pathetically lame:
The United States can begin to shape a positive climate for its diplomatic efforts, internationally and within Iraq, through public statements by President Bush that reject the notion that the United States seeks to control Iraq’s oil [page 42].
I find this recommendation lame because those who are persuaded that the U.S. does seek to control Iraq’s oil would put no credence at all on anything Bush says. And yet, their intellectual belief must be confronted and changed.
So here’s another proposal to throw into the mix. What about China as one of the international players whose participation in Iraq’s oil industry we try to encourage? True, their interests in the region are not always the same as ours, but that is precisely the factor that could give them some credibility as an independent third party. If Sinopec or China National Offshore Oil Corporation ends up helping the Iraqis reap the benefits of their rich geological heritage, that would be far more effective than any words from Bush in terms of silencing the “blood for oil” pundits.
And if so, also more effective in reducing the total blood that ends up flowing into the sands above these rich oil lands.