By Joshua Holland, on AlterNet

Despite the ethnic bloodshed in Iraq, majorities of Shiites, Sunnis and Kurds are united in their disapproval of the proposed oil laws that Washington and Big Oil are pushing. 

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."

A coalition of NGOs and other civil society groups commissioned a poll 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 (oil) 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 (which included major players from the oil industry) long before the planning for the invasion itself.  Before that, and even before the attacks of 9/11, these plans were discussed in the White House (under the guidance of Dick Cheney). 

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. 

More at: http://www.alternet.org/waroniraq/59318/

The Bush administration claims that offering such lucrative terms to oil companies 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 (from the Bush administration) to go in the opposite direction. 

From Greg Palast's web site, Oct. 2006:

"U.S. oil companies, previously all but shutout of Iraq's oil sector, are on the verge of winning Iraq's oil prize. 

On September 10, Iraq's Deputy Prime Minister repeated a pledge made earlier this year by Oil Minister al-Shahristani that Iraq would have a new national petroleum law by the end of 2006.  The law will open Iraq's currently nationalized oil industry to private foreign oil companies on terms unprecedented in the Middle East or in any oil- rich nation.  According to Iraqi Vice President Mahdi, the law will be "very promising to the American investors and to American enterprise, certainly to oil companies."  The law mirrors proposals originally set out by the Bush administration prior to the March 2003 invasion. 

Meeting four times between December 2002 and April 2003, members of the U.S. State Department's Oil and Energy Working Group agreed that Iraq "should be opened to international oil companies as quickly as possible after the war" and that the best method for doing so was through Production Sharing Agreements (PSAs). 

None of the top oil producers in the Middle East use PSAs because they favor private companies at the expense of the exporting governments.  In fact, PSAs are only used in respect to about 12 percent of world oil reserves.  PSAs are the favorite of international oil companies, and the ‘worst-case scenario’ for oil-rich states. 

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