However, Republicans could be justified in saying any large increase of Iraqi oil coming our way (which is supposed to very good oil compared to the Saudi’s sour crude) will ease the financial crunch that is upon middle America. You bet the Democrats are seeing a chance that oil prices could go down as a result and thus less of a reaction against the current regime. Sour grapes? But then again why should US tax payers be used militarily to profit the Hunt family of Texas?

And if the Kurds are making separate contracts with different companies than the Baghdad govt. that does verify the Senator’s concerns. Turkey might also differ with an independent Kurdistan too. Isn’t this oil supposed to be shipped through Turkey? I googled “Kurdish oil piped through Turkey” and got 200K+ hits incl. this hot one! (disclaimer–not my politics but interesting history none-the-less) and there are interesting twists and turns including anti-Israeli rants about an Kurdish-Jordan-Israel pipeline that doesn’t sound that bad considering the Turkish anti-western attitudes of late.

Given the total lack of transparency in decisionmaking by the government and the presence of a huge American force, the order of the day should have been to reconstruct the very good Iraqi oil ministry and leave it as a functioning state institution, under previous law, until the occupiers left. Many oil producing states are wildly corrupt. This particular state, however, is American business insofar as it hooks up with American corruption, of which we receive reports daily as various deals that the Pentagon and the State department make get audited or reported on.

All of which points to a need for a larger framework of restraint.

Iraq has a government that is recognized as sovereign by other powers. Per Wikipedia:

It was recognized by the U.S., the United Nations, the Arab League and several other countries as being the sovereign government of Iraq (see Iraqi sovereignty for more information). The U.S. retained significant de facto power in the country and critics contend that the government existed only at the pleasure of the United States and other coalition countries, whose military forces still remain in Iraq. The coalition did promise that its troops would leave if the new sovereign government requested it, but no such request was made.

Perhaps more important than its formal status, the Iraqi has taken some moves that were most assuredly not approved by the US and therefore point to at least a degree of autonomy. In particular, the Iraqi government has made overtures to Iran (humanitarian and cultural), announced that it refuses to allow Iraq to be used to launch attacks against Iran, and undermined US efforts to claim that Iran is supplying weapons to Iraq (a press conference to announce the same was cancelled after the Iraqi government announced that there was no evidence that the weapons that the US claimed were from Iran actually were, and the Iraqis further contended that they could establish that their origins. This was a very big embarrassment that went completely unreported in the US).

I can’t imagine that the contracts that are being made right now between Iraq and the oil companies will hold up over the next decade – if the U.S. doesn’t keep occupying the place. It is easy to envision Maliki or Sadr re-nationalizing the oil companies – and they’d have every right to do so, since the contracts have been signed under extraordinarily coercive circs.

Which may well be why the U.S. seems determined to stay in Iraq forever.

http://www.tomdispatch.com/post/174853

To wit:

“In September, when the effort to enact U.S.-favored oil legislation — a much-announced ‘benchmark’ of both the White House and Congress — collapsed in Iraq’s legislature, the coup de grace seemed to be delivered by a wildcat agreement between the Kurdistan Regional Government and Hunt Oil of Dallas, Texas, headed by Ray L. Hunt, a longtime Bush ally and a member of the President’s Foreign Intelligence Advisory Board. This agreement, undertaken against the stated wishes of the central government, provides for the separate development of Kurdistan’s oil resources and puts the Kurds in blatant, preemptive violation of the pending legislation. It makes, in fact, such a mockery of that legislation that the prospect of its passage before the Development Fund mandate expires is now vanishingly small.”

“If the mandate expires and the law is not passed, then what? Then others in Iraq may well seek to follow the Kurdish example and cut comparable deals with whomever they wish. The central government, even if it has lost effective control of the Kurdish north and the Sunni west, could well ratify resource-separatism by contracting for the development of the oil resources in the territory generally remaining under its control. Thus, a new, Iran-allied, oil-rich, nine-province Shiite Iraq could match Kurdistan’s deal with one of its own, perhaps even with ready-and-willing China. Will any combination of American military and diplomatic pressure suffice to stop such an untoward outcome?”

My questions are these:

1) Does the announcement of these contracts last week signal that the Bush administration has given up hope for an oil law?

2) Has the Bush administration now decided to instead “ratify resource-separatism by contracting for the development of the oil resources in the territory generally remaining under its [Shiite] control?”

3) If this is true, what will be the reaction of the Sunnis?

4) If this is true, what will be the reaction of Saudi Arabia (also Sunni)?

5) If this is true, and especially given that China and Russia were so conspicuosly cut out of the newly announced contracts* (see below), what will be their reaction?

*”In all cases but one, the same company that had provided free advice to the ministry for work on a specific field was offered the technical support contract for that field, one of the companies’ officials said.”

“The exception is the West Qurna field in southern Iraq, outside Basra. There, the Russian company Lukoil, which claims a Hussein-era contract for the field, had been providing free training to Iraqi engineers, but a consortium of Chevron and Total, a French company, was offered the contract. A spokesman for Lukoil declined to comment.”

http://www.nytimes.com/2008/06/19/world/middleeast/19iraq.html?pagewanted=2&_r=1&sq=exxon-mobil%20iraq%20contracts&st=nyt&scp=4

Separatism and Empire Building in the 21st Century, by James Petras

http://www.dissidentvoice.org/2008/06/separatism-and-empire-building-in-the-21st-century/

A couple of points:
The key to US military empire building follows two principles: direct military invasions and fomenting separatist movements.

Clearly US military intervention promotes separatism as a means of establishing a regional ‘base of support’. Separatism facilitates setting up a minority puppet regime and works to counter neighboring countries opposed to the depredations of empire. In the case of Iraq, US-backed Kurdish separatism preceded the imperial campaign to isolate an adversary, create international coalitions to pressure and weaken the central government. Washington highlights regime atrocities as human rights cases to feed global propaganda campaigns.

Those filled in the pieces I was missing. Thanks. And FYI, the national news outlets reports were pretty much like UPI but less detailed (Reuters did at least mention no-bid, but that was the only major addition).

It only appears inconsistent if you do not understand the terminology.

Demand is said to be ‘decelerating’ but has it actually declined? I think not. No, all that has happened is that the pace of increased demand has slowed. That is, it is merely a rate change.

Understood simply, if you are driving your Prius from NYC to LA, and you slow from 80 mph to 55 mph are you still getting closer to LA? Why yes, you are.

So demand is still rising and supplies are not keeping pace. This is not an argument against the role of speculation. I think speculation plays a large role. But is not the nefarious ‘commodity speculator’ that many seem to want to target.

No, it is the actual product puveyors who are speculating. After all, if you are in the business of selling petroleum how will you price your product – on what you actually paid for it, or on what (you speculate) the replacement cost will be?

What you really have here, Yves, isn’t an argument between Dems and Reps but an argument between factions of US Big Oil on how best to steal the stuff from the serfs of Mesopotamia. The proposed hydrocarborn law is a Big Steal, designed to lock up long-term control of fields _and extraction pricing_ in the hands of US plutocrats. —But the hydrocarbon law is going nowhere fast. Sooo, other factions of Big Oil have been getting in to cut their own side deals with local Iraqi factions to lock up exports at least from these local fields; an end around on nationalist oppostition to having the oil stolen. However, such side deals, should they occur, favor separatist factions inordinately, and are problematic for the country as a whole. In addtition to being steals, but that isn’t the issue. Big Republican money is mostly still behind the Big Steal. Big Democrat money has been bought round to the idea of mand Little Steals. _That_ is the argument you are trying to parse, as I read it.

Under no circumstances should any foreign oil country be allowed to sign any contract in Iraq giving them control of anything. Period. The response will be explosive in kind, and enduring. If and when the Iraqis can make a decision without our guns held to their heads, as now, they may choose to contract with some US firms on rehabilitating their extrative infrastructure. I think that this is most unlikely: they have every reason to hate our guts. We should have no entangling dalliances with Iraqi oil; we will only get burned. Period. We are only going on pursuing it now to keep the neocons from looking as exacrable and deluded as in fact they are. Rome conquered Mesopotamia from Parthia, too; they held it for not a dozen years, and went bankrupt in the endeavor. Just so. This Great Game has already failed miserably: it’s over, it’s just not done.