Triumph…and Denial

Over the past weekend, the Bush administration scored arguably its largest political triumph in the Iraq War. That victory, of course, was the announcement that no-bid oil developmental contracts had been signed between the Iraqi government and five western oil companies (Exxon Mobil, Shell, BP, Total, and Chevron) for the purpose of exploring the best ways to exploit some of Iraq’s massive untapped petroleum reserves. Hurrah, hurrah!

This is a major victory if one assumes (as I do) that the major geopolitical reason for the American invasion of Iraq in the first place was to break the barrier in place since 1972 that had kept the United States’ hands off Iraqi oil. Moreover, at a time when issuesof supply and demand are contributing to spiralling oil prices, the deal may also help increase Iraqi production, with some hoped-for dampening effect on the price of oil. This sounds like the stuff of rejoicing. But is it?

Somewhat astoundingly for an administration that takes credit for almost anything good that happens in the world (whether it contributed to that situation or not), the administration DENIES it had anything to do with the breakthroughs. As quoted in the New York Times, press spokesperson Dana Perrino, for instance, deadpanned that “Iraq is a sovereign country, and it can make decisions based on how it wants to move forward in its development of its oil resources.” Secretary of State Condoleezza Rice (after whom, it should be remembered, an oil supertanker is named) added with an equally straight face, “The United States has stayed out of the matter of awarding Iraqi oil contracts. It is a private sector matter.” Never mind that the State Department served in a “consulting” role in drafting the contracts.

You can virtually see the noses growing in the White House. Head cowboys/oil “bidness”men Bush and Cheney can hadly be less than ecstatic at this turn of events. Ironically, if they simply admitted that this had been their motive all along, they could now claim triumph that would be hard to deny. But they are not. Why not?

Part of their reluctance, of course, must come from the fact that this was not why they said the United States went to war in the first place. At the time, a battle cry of “American blood for Iraqi black gold” would not have appealed to the American patriotic sense as well as the threats of weapons of mass destruction and terrorists. Those rationales were always a crock, and the Bushies should have known it, but as long as the public did not, they provided much less venal cover for the invasion than grubbing for oil. In addition, the Bush administration hardly dares admit to the Muslim world that their suspicions about American motivations were also correct, an admission that would hardly enhance America’s highly tarnished image in the region. And, should American companies be among those who ultimately gain concessions for pumping the oil (clearly the real brass ring), then someone will have to be around to make sure the oil keeps flowing. Do we see a rationale for a protracted stay in Iraq lurking only slightly in the background?

It has arguably been a very good weekend for a White House that has not had many good days lately. It’s almost a shame they do not think they can enjoy it. Maybe when the doors are all closed and the reporters are all safely dispatched from view, the high-fiving begins.

Source: Andrew E. Kramer, “U.S. Advised Iraqi Ministry on Oil Deals.” New York Times (online), June 30, 2008.  

Schlepping toward the Center

In the past week, both Senators Obama and McCain have begun talking in ways about Iraq that suggests their stark differences on the subject are not really as fundamental as they have been made to seem. Let the schlepping begin.

As noted in the most recent posting, there are really three positions one can take about what to do about Iraq after inauguration day in January 2009. The candidates have occupied the extremes. Obama has favored getting out rapidly on a fixed timetable of withdrawal. This position speaks to the public desire for American withdrawal and is based on the presumption that the United States had no good reason to be there in the first place and that a protracted continuation will do little good and might even do more harm. McCain has adopted the other extreme, which is that the United States must remain in Iraq until victory is achieved, and that the surge is working to achieve that end. The elusive term victory has gone from producing a democratic Iraq to a stable Iraq. 

The two extremes share a common problem: both raise objections from the public. Leaving raises hackles because a growing portion of the population now thinks that “progress” is now being made and that pulling up stakes will throw away that effort and progress. An open-ended commitment to victory, on the other hand, violates the public desire to see the war end.

How to deal with this dilemma? The answer seems to be to head from the extremes toward the center, a third position that can be thought of as Don’t Leave So Fast/Stay Just a Little Bit Longer. Obama is moving toward the former: he is now scheduled to visit Iraq, where he will be regaled with signs of progress. He has already said that withdrawal will be conditioned by what the military tells him, and they are not going to tell him to leave instantly. McCain, on the other hand, has been backtracking from his assessment of being there ”as long as it takes” by suggesting that progress is greater than expected, and thus we may not have to stay as long as once feared. Obama says the timetables are flexible, McCain that success may come sooner rather than later. Is it only a matter of time until these two positions converge on a common point in time for American extraction from Iraq?

These changes reflect changes in the public mood, in two ways. One is that American assessment of the war’s progress has change. Fewer Americans see Iraq as a inevitably lost cause and have softened their opposition to the war. At the same time, the abyssmal performance of the American economy has shoved Iraq out of the electoral limelight (a not uncommon phenomenon). If Obama wants to reenergize the Iraq issue, he might be well advised to tie economic performance to the effects of Iraq (for instance, the impact of borrowing for Iraq on the strength of the dollar and consequently the higher number of dollars needed to buy a barrel of oil). McCain, of course, wants to get as far away as he can from the Bush economy and as close as he can toward a national security election, at which he feels he is advantaged. In the meantime, both are quietly schlepping their way toward a closer ground on the Iraq War.

Choosing among Lousy Choices in Iraq

Thomas L. Friedman’s weekend New York Times column reminded the reader of two things. Printed in my hometown paper–the (Hilton Head, SC) Island Packet as”Let’s Start Talking about How to Leave Iraq Without Losing Everything on June 22, 2008–its reminders were that the political dialogue has provided stark but underdeveloped policy positions from McCain and Obama on the subject, and that choosing among the alternatives is likely to be a difficult task, since both positions have problems associated with them.

Friedman suggests there are three cogent variables in the current mix. The first is public opposition to continuing the war that makes an indefinite continuing commitment politically untenable. The base of this observation is the unbearable costs both to the military and the economy of continuing the war. The second is the evidence of progress in the field. Things are better in Iraq, Friedman offers, but adds, “It is still not clear that Iraq is a country that can be held together by anything other than an iron fist.” Linear projections of progress, in other words, are suspicious. The third observation is that a precipitous withdrawal would be injurious, because the country has not reached a point where its “stability is self-sustaining.”

Like most of what Friedman has to say, there are no revelations here, but rather a summation of that part of public opinion that wants to see an end to American involvement but fears the consequences of withdrawal–a fairly sizable part of the population. A quick look at his assumptions, however, is useful to clarify the bad options the U.S. has in ending the imbroglio.

The first comment is that the observations are of varying empirical content. That the American people are tired of Iraq and want out is unassailable–there is lots of factual evidence to support it. The other two oservations, however, are less grounded in observed reality. There are indeed measures that suggest things are better (if less violence against Americans is the main criterion of better), but not why this is the case or whether it will continue. That Iraq would deteriorate without an American “referee” to monitor progress is an extrapolation into the future without clearly compelling empirical base. It might be true, and it might be false, but an argument can be made in either direction.

What, then, are the lousy choices among which to choose? There are three. One (call it the Obama option) is to set a reasonably short timetable for leaving and adhere to it. That option is clearly politically popular in the United States, but it comes with drawbacks. Once the United States withdraws (exactly what that means depends on the outcome of the SOFA negotiations), it will lose influence in Iraq, with three possible consequences. The result could be internal Iraqi chaos the United States would not be in a position to reverse. A new government in Iraq lacking American troops looking over its shoulder might reverse the oil leasing negotiations noted here last week and admit other oil interests or, at worst, kick the U.S. out again. If either of these things happen, the result could be a negative political backlash in the United States. Of course, the American people may also be so grateful to get out that they simply do not care what happens when the U.S. is gone, but that is a chance.

The second possibility (the McCain option) is to stay until something like “victory” (currently defined as a stable, self-sufficient Iraq) is achieved. This option also has problems. It would be unpopular virtually everywhere–in the United States, in Iraq, and among American allies. It would also mean the continuation of ruinous economic and human costs as the goal is pursued. That pursuit is made more difficult because there are no certainties that it can be achieved. If the option is pursued and fails, there are high political costs as well.

The third possibility is to let things slide. This option (the stay/leave option) suggests that the United States should neither commit to a long-term involvement nor set a short timetable for withdrawal. Rather, it would suggest, Iraqification-style, that the United States is committed to leaving but only when the time is “right” (purposely left vague). That is pretty much what is happening today, and is a compromise that seeks minimally to avoid antagoniing either side, at least until the election is over. Whether it is viable depends on whether a point of departure that turns out to be more satisfactory than its parallel in Vietnam is attainable. If the U.S. stays awhile longer and still fails, supporters of this option will have to answer the ire of those who say the U.S. could have pulled out much earlier and gotten the same result. If it succeeds, supporters can say “we told you so.” The problem is not knowing which result the option will yield. 

All the options are lousy, because each has potentially negative political consequences, and the future of Iraq is sufficiently opaque that one cannot confidently predict which option will hold. Pick your posion! 

It Really Is the Oil, Stupid!

Many observers (including myself in What After Iraq?) have suggested that the real reason the United States invaded Iraq was to gain control of the country’s vast oil deposits, from which the United States had been excluded since the Iraqis nationalized their oil in 1972. The administration has historically denied such motivation, preferring to rely on the flimsy excuses surrounding WMD and terrorism, and more recently, President Bush’s stated belief that getting rid of “bad guy” Saddam Hussein was reason enough to justify the effort.

Once one discounted the stated motivations, the invasion and occupation made little sense, particularly measured in realist terms (which is why so many classic realists condemned it from the beginning). Even if Iraq had WMD and/or was consorting with terrorists, was this adequate reason for military action, particularly as that action has turned out? To realists, the answer was–and is–a resounding no! If, on the other hand, the purpose was to gain control over one of the world’s last largely unexploited sources of petroleum (thereby relieving the United States of strained sources of petroleum and possibly even helping to drive down the price of crude), that might be another story.

The announcement on June 19, 2008, that the four oil companies that had formed the old Iraq Petroleum Company nationalized in 1972 (Mobil, Shell, Total, and BP) plus several others including Chevron have received no-bid contracts to help Iraq rebuild its oil industry suggests that the oil motivation was there all along. According to the New York Times story on the subject, the contracts, to be announced formally on June 30, are 1-2 year agreements that, in the words of one industry analyst quoted in the story, provide a “foothold” for the contracting companies when long-term contracts are let sometime later.

This is significant for a couple reasons. First, the idea of letting contracts to foreign private companies reverses an international trend among OPEC members to nationalize their industries and extract the oil themselves. As a number of observers of the Bush efforts in Iraq have chronicled since the occupation began, privatizing Iraqi state-owned industries has been a high priority for the administration. Score one for the Bushies! Second, the contracts significantly exclude Russia, China, and India, all of which have signed Memorandums of Understanding (MOUs) with Iraq but will not be part of the preliminary efforts that are included in the agreement. The United States presumably hopes those countries will be excluded when long-term agreements are struck. If true, score another one for the Bushies!

So was the real underlying purpose of the Iraq war (to paraphrase James Carville in 1992) “It’s the oil, stupid”? The administration has consistently denied that it is, despite evidence to the contrary. The potential benefits for the United States and western oil companies is huge: industry estimates are that Iraq could be pumping 4 million barrels per day in a few years and could reach a peak of 6 million. That amount would change radically the supply and demand equation for petroleum for several years, as the transition toward alternate fuel sources proceed. In the meantime, the oil companies that get the leases (and which, of course, have heavily supported Bush) stand to reap great benefits (given the niggardly profits they have made in recent years, something they clearly need). Moreover, the total worth of the oil under Iraq soilhas been estimated in the tens of trillions of dollars, beside which U.S. war costs pale. Was war in Iraq an investment in America’s energy future?

Presumably, there are a lot of suppressed smug grins on the faces of the Bush advisors who counseled war on Iraq at this latest news. Can it be long before they start slapping very public high fives to celebrate their triumph? It really always has been the oil, hasn’t it guys?

Source: Andrew E. Kramer. “Deals with Iraq Are Set to Bring Oil Giants Back.” New York Times (online), June 19, 2008.   

 

A Lumpy SOFA

Reports over the weekend that both the al-Maliki government and the Iranian government are less than enthused about the extension of the American military presence in Iraq via the proposed new Status of Forces Agreement (SOFA) are complicating the Iraq War future’s prospects. The SOFA is indeed turning lumpy.

What is going on here? The U.N. mandate under which the U.S. has operated its occupation in Iraq ends at the end of this year, as noted in an earlier posting. The only way the United States can legally remain in Iraq into 2009 is through a new UN mandate (which is not going to happen) or through Iraqi permission in the form of a SOFA wherein the two governments agree to an extension. The U.S. proposal calls for a long-term continued presence on a series of bases throughout Iraq. The pretensive reason is to protect the Iraqis (and Americans) from terrorists operating out of Iraq. The Iraqis, encouraged by the Iranians, increasingly view the SOFA as a ploy for the Americans to maintain effective control of Iraq more or less indefinitely. The Americans deny this; most Iraqis, who want the Americans to leave, do not believe us.

How is this all going to work out? Earlier in the year, the Bush administration apparently felt negotiation of the SOFA would be easy, assumed it would be signed and sealed well before the November election and would bind a new administration to honor commitments to stay. That hope not only no longer seems very likely, it now seems unlikely. Iraqi agreement to a new SOFA on American terms before November remains a possibility, but it is increasingly unlikely: the Iraqis and Iranians do not want it, and signing an agreement with a lame duck Bush administration that may be opposed by its successor is not a good deal for Iraqis who will have to deal with that new administration.

If the Bush deal is unlikely, then the next possibility is that nothing happens until the election, at which point a new arrangement is negotiated with the new administration’s blessing. If the incoming regime is headed by Obama, the new SOFA will likely be restrictive, calling for rapid removal of most U.S. forces and a small residual force to deal with AQI (Al Qaeda in Iraq) and to provide security for Americans remaining in the country. If the incoming adminstration is led by McCain, there will be prickly negotiations because McCain will essentially adopt the Bush position of a long, high manpower presence that could lead to the third outcome.

The third outcome is that the Iraqis simply refuse to sign any SOFA with the United States, a possibility hat seemed highly unlikely six months ago but not today. It is increasingly obvious that al-Maliki, or any other Iraqi leader who signs the SOFA the Bush administration wants, would be labeled a collaborator and besubject to retaliation after the Americans leave. If they reuse to allow the U.S. to stay, that would leave the United Statdes with two unpalatable options: obey international law, leave, and lose influence in Iraq; or brak the law, stay, and run the risk of international approbrium. The Bush administration would have no trouble with this dilemma, since they hold international law in disdain. But what about an Obama or a McCain administration? We will look at these possibilities in the future.