Our Precious Bodily Fluids

By the time President Bush announced his escalation in Iraq on the night of January 10, the debate over the war had grown so intense that it was easy to forget the reasons, real and imagined, that we went to Iraq in the first place.

Oil is the life's blood of modern industrial infrastructure and the body politic of industrialized nations. We went to Iraq to get the oil, and we need to always keep it in mind.

A reminder of that sordid fact came on January 7, from the foreign press, naturally, when the U.K.'s daily The Independent announced that Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.

The paper's reporters said they had seen the draft of the controversial new law which would give 30-year leases to oil giants such as BP, Shell, and Exxon. These would be the first such Iraqi concessions to foreign oil firms since the country's petroleum industry was nationalized in 1972.

"The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil," the article noted, and went on to quote Vice-President Cheney, who in 1999, when he was CEO of Hallibuton, said that by 2010 the world would need an additional 50 billion barrels of oil a day.

"So where is the oil going to come from?" Cheney asked rhetorically. "The Middle East," he answered, "with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

Keep your eyes on the prize.

The Independent also pointed out that the terms of the proposed deals would allow oil companies to pocket up to three-fourths of revenue accruing from exploitation of Iraqi oil in the early stages of the contracts, dropping to 20 percent in the leases' latter portions. But even that latter figure is twice as much as the typical producer's cut usual in such deals with foreign governments.

Oil industry spokesmen say these unusually large payouts offer the only way to get Iraq's oil industry back to regular and efficient operation after years of sanctions, wars, and loss of expertise.

The article also quoted voices opposed to the proposed deals. A spokesman for the human rights and environmental group Platform, which monitors the oil industry, "said Iraq was being asked to pay an enormous price over the next 30 years for its present instability. 'They would lose out massively,' he said, 'because they don't have the capacity at the moment to strike a good deal.'"

And James Paul, a director of the Global Policy Forum, an independent international government watchdog, maintained that the vast majority of Iraqis will oppose these deals. "To do it anyway, with minimal discussion within the [Iraqi] parliament is really just pouring more oil on the fire," Paul said.

Whether Iraq's refineries and pipelines can even be secured sufficiently against sabotage to maintain regular operations is questionable, and the oil giants may never be able to gather the spoils of this sweetheart deal. But George Bush is doing his best to provide the protection his friends in the industry are going to need, and sending reinforcements.