What Cheney Energy Task Force Talked About

Retired Senior Foreign Service Officer of the US Department of State offers educated insight into the real purpose of the 2001 energy task force.

Reports from Baghdad indicate that the US-backed Iraqi cabinet has finalized a new oil law that would (a) turn the development of 2/3rds of Iraqi oil reserves over to foreign firms, (b) give multinationals 15


As an Iraqi matter, adoption of the new oil law must be a black day for Adnan Pachachi who is apparently the only surviving member of the original Middle East country group of officials who formed OPEC, the Organization of Petroleum Exporting Countries, in 1960. He is watching a plan abruptly to return Iraq to the good old days of foreign oil company operators who viewed themselves virtually as independent governments. Under those rules, the multinationals controlled exploration, drilling, production, shipping, and marketing/pricing of the region’s oil, and the five OPEC founders–Iraqis, Iranians, Saudis, Kuwaitis, or Venezuelans, as the companies saw matters, only got in the way. The way the Iraq situation unfolds is sure to be viewed with vital interest by OPEC members and all energy sources, especially Russia, other Caspian region and the Central Asian ones who-on their own–are just getting deeply into the Western energy game.

The British and American oil companies involved might well regard this new Iraqi law as payback for the fact that the Iraqis nationalized the oil industry in 1971 and took it away from the foreign operators. That would be truly a sour grapes attitude, however, because the oil companies never paid the Iraqis for their concessions in the first place. The colonial operators worked that out without consulting the Iraqis. That is one reason why what is going on now sounds so familiar. Once again the Iraqis have been handed a petroleum regime that they had minimal part in crafting. In the present case, the Iraqis surely will raise cane if their payments are not equal to the share they would enjoy in OPEC. Prices recently have averaged $60-65 per barrel, and OPEC member shares (profits, costs, and taxes) tend to run more than half the market price for a given crude oil.

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