[Congressional Record Volume 153, Number 85 (Wednesday, May 23, 2007)]
[House]
[Pages H5638-H5644]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     QUESTION OF PERSONAL PRIVILEGE

  Mr. KUCINICH. Mr. Speaker, I rise to a question of personal privilege 
under article IX, clause 1.
  The SPEAKER pro tempore. The Chair has been made aware of a valid 
basis for the gentleman's point of personal privilege.
  The gentleman from Ohio is recognized for 1 hour.
  Mr. KUCINICH. Mr. Speaker, there is an issue of critical importance 
facing this Congress, and that issue relates to whether or not this 
Congress should pass legislation to continue to fund the war in Iraq.
  The legislation contains a particular provision that would lead to 
the privatization of Iraq's oil, a provision that I'm quite concerned 
about, because I think that if we take that position, it will make it 
very difficult for us to ever be able to end the war.
  So today I'm going to lay out the case as to why this provision 
that's in the bill would advance privatization and as to what the 
options are for this Congress.
  As many know, the administration has set forth several benchmarks for 
the Iraqi Government, including the passage of a hydrocarbon law by the 
Iraqi Parliament. The administration has emphasized only a small part 
of this law, what they call the ``fair distribution,'' that's in 
quotes, of oil revenues.
  I want this House to consider the fact that this Iraqi hydrocarbon 
law contains a mere three sentences that generally discusses the so-
called fair distribution of oil. Except for three scant lines, the 
entire 33-page hydrocarbon law is about creating a complex legal 
structure to facilitate the privatization of Iraqi oil. As such, it is 
imperative that Members of Congress read the Iraqi Parliament's bill, 
because passage of any legislation that includes insisting that the 
Iraq Government push the passage of a hydrocarbon act puts this 
Congress on record to promote privatizing Iraq's oil.
  Now, I have maintained from the beginning that the war has been about 
oil. We must not be a party to any attempt to set the stage for 
multinational oil companies to take over Iraq's oil resources.
  There have been several benchmarks set by the administration for the 
Iraqi Government, including passage of a so-called hydrocarbon law by 
the Iraqi Parliament. Many inside the Beltway are contemplating linking 
funding for the war in Iraq to the completion of these benchmarks, 
including passage of the hydrocarbon law by the Parliament.
  This administration has led Congress into thinking that this bill is 
about fair distribution of oil revenues. In fact, as I mentioned 
earlier, except for three scant lines, the entire 33-page hydrocarbon 
law creates a structure to facilitate the privatization of Iraq oil.
  Now, the war in Iraq is a stain on American history. Let us not 
further besmirch our Nation by participating in an outrageous 
exploitation of a nation which is in shambles due to the U.S. 
intervention.
  Let me provide this House with an analysis of the underlying bill in 
the Iraqi Legislature, which this administration is trying to get 
Congress to pass to pressure the Iraqi Government to accept 
privatization. And this analysis that I'm offering at this moment is a 
version that passed the Iraqi Cabinet and was referred to the Iraqi 
Parliament.
  The legislation contains only three sentences in regards to the fair 
distribution of oil, but does not resolve any of the issues facing this 
challenge. The legislation simply requires that future legislation be 
submitted for approval; thus this legislation does not even meet the 
benchmark of the administration.
  The legislation ensures that ``chief executives of important related 
petroleum companies,'' follow that now, ``chief executives of important 
related petroleum companies'' are represented on a Federal Oil and Gas 
Council, which approves oil and gas contracts. This is akin to foreign 
oil companies approving their own contracts.
  This legislation ensures that the Iraqi National Oil Company, which 
is the oil company of the people of Iraq,

[[Page H5639]]

has no exclusive rights for the exploration, development, production, 
transportation and marketing. The Iraq National Oil Company must 
compete against foreign oil companies with rules that benefit the 
foreign oil companies. This is for their own oil.
  The legislation gives the Iraqi National Oil Company some control of 
developed oil fields and rights to participate in undeveloped oil 
fields in the Annex I and II of the legislation, but these annexes have 
never been made public, so we don't know for sure.
  The legislation gives the Iraq National Oil Company temporary control 
of the oil pipelines and export terminals, but then it directs the 
Federal Oil and Gas Council, which is run by chief executives of oil 
companies, it directs them to turn these assets over to any entity with 
no further instructions. The opportunity for a foreign oil company to 
have control over the Iraqi oil pipeline and export terminals would 
give that company enormous control of the Iraqi oil market.
  The legislation demands that contracts, and this is a quote, ``must 
guarantee the best level of coordination'' with the Oil Ministry, Iraqi 
National Oil Company, the regions and oil companies. The legislation 
mandates that undeveloped oil fields be developed quickly, and oil 
companies are given explicit authority to collaborate.
  The legislation does not require contracts to be published for public 
review for up to 2 months after approval. The legislation provides for 
up to 35 years of exclusive control over oil fields for foreign oil 
companies. The legislation provides for a preference to Iraqis for jobs 
and services, but only if these benefits do not place extra costs or 
inconveniences on the foreign oil companies. The legislation states 
that disputes between the State of Iraq and any foreign investors shall 
be submitted for arbitration to an international court and will not be 
decided upon by an Iraqi court.
  This legislation has four appendices whose contents remain secret. 
Annex I, which is secret, regards to present producing fields allocated 
to the Iraqi National Oil Company; Annex II, discovered or undeveloped 
fields allocated to the National Iraqi Oil Company; Annex III, 
discovered undeveloped fields outside the operations of the Iraqi 
National Oil Company; and Annex IV, exploration areas. These appendices 
will effectively make clear which old fields will be controlled by the 
Iraq National Oil Company and which are open to foreign control of oil 
companies.
  And I might add that when you look at this, out of about 98 oil 
fields, Iraq will have control of approximately 80, 81 of those oil 
fields. Excuse me. The foreign oil companies will have control of about 
80, 81 of those oil fields, or over 80 percent of Iraqi oil under this 
agreement will be controlled by foreign oil interests. This is an 
analysis that I'm offering based on facts that are ascertainable.
  Now, what are others saying about this draft Iraqi oil law and what 
it will do? Here's a quote from the Christian Science Monitor of May 
18, 2007, in an article entitled ``How Will Iraq Share the Oil?'' In 
the U.S., the demand that Iraq pass an oil law is a benchmark that is 
becoming a flash point. Here's the quote.

                              {time}  1145

  `` `The actual law has nothing to do with sharing oil revenue,' says 
former Iraqi Oil Minister, Issam Al Chalabi, in a phone interview from 
Amman, Jordan. The law aims to set a framework for investment by 
outside oil companies, including favorable production sharing 
agreements that are typically used to reward companies for taking on 
risk, he says.
  `` `We know the oil is there. Geological studies have been made for 
decades on these oil fields; so why would we let them,' '' that is, the 
international oil companies, `` `have a share of the oil?' he adds. 
`Iraqis will say this is solid proof that Americans have staged the war 
. . . because of this law.' ''
  The next quote comes from the Dow Jones Newswires of March 4, 2007, 
the headline: ``Iraq Oil Law Details Untouched Fields, Blocks--
Document.'' And the text says:
  ``Iraq's draft hydrocarbon law, the centerpiece in the development of 
the country's shaky oil industry, details dozens of untouched oil 
fields loaded with proven reserves and scores of exploration blocks 
that may prove a magnet to international oil companies, according to a 
document seen by Dow Jones Newswires.''
  In an article from the Dow Jones Newswires again, on March 10, 2007, 
the headline: ``Some Iraqi Politicians Urge Rejection of Draft Oil 
Law.'' Here's the text:
  ``The law, if passed, is expected to open the country's billions of 
barrels of proven oil reserves, the world's third largest, to foreign 
investors.''
  From an article from the American Lawyer, April 25, 2007, ``Our Man 
in Iraq.'' Here is the text:
  ``Under the new law, the Iraq National Oil Company would have 
exclusive control of only about 17 of Iraq's approximately 80 known oil 
fields.'' So that number, then, is 17 of Iraq's approximately 80 known 
oil fields. ``The law would also allow the government to negotiate 
different kinds of exploration and production contracts with foreign 
oil companies, including production sharing agreements, or PSAs. Energy 
lawyers favor these because they allow oil companies to secure long-
term deals and book oil reserves as assets on their company balance 
sheets. Under the proposed law, foreign companies would not have to 
invest their earnings in Iraq, hire Iraqi workers, or partner with 
Iraqi companies.''
  Next, from the U.S. Morning Star Online, January 28, 2007, headline: 
``Iraqi Officials Insist Oil Law Won't Favor U.S.''
  ``The proposal would provide for production sharing agreements that 
would give international firms 70 percent of the oil revenues to 
recover their initial investments and subsequently allow 20 percent of 
the profits without any tax or restrictions on transferring the funds 
abroad.''
  This from CommonDreams.org, April 18, 2007, entitled ``Time to Do the 
Math in Iraq'':
  ``The most notable feature of the law is a revival of exploitive type 
of contact widely used prior to the rise of Arab nationalism in the 
1960s, known as a production sharing agreement. Although the Oil Law 
uses an alternative term, `exploration and production contract,' the 
effect is identical. The new arrangement would allow the bulk of Iraq's 
reserves to be controlled by outside oil companies, privatizing what 
until now has been a nationalized resource under the auspices of the 
Iraq National Oil Company. It specifies the royalty that will be paid 
to Iraq: `12.5 percent of gross production, measured at the entry 
flange to the main pipeline.' And as if the rest of the law were not 
already explicit enough, article 35(A) reiterates: `Holders of 
exploration and production rights may transfer any net profits from 
petroleum operations to outside Iraq after paying taxes and fees owed.' 
''
  This, from a publication called PLATFORM in 2005, entitled ``Crude 
Designs: The Rip-Off of Iraq's Oil Wealth,'' by Greg Muttitt:
  ``At an oil price of $40 per barrel,'' and keep in mind that the 
price of oil is about $65 a barrel right now, heading towards $70 a 
barrel, but at a ``price of $40 a barrel, Iraq stands to lose between 
$74 billion and $194 billion over the lifetime of the proposed 
contracts.
  ``Under the likely terms of the contracts, oil company rates of 
returns from investing in Iraq would range from 42 to 162 percent, far 
in excess of the usual industry minimum target of around 12 percent 
return on investments.''
  Next, on March 13, 2007, Antonia Juhasz, an oil industry analyst in 
an op-ed contribution, asks: ``Whose Oil is it, Anyway?'' Here is what 
Antonia Juhasz writes:
  ``Today more than three-quarters of the world's oil is owned and 
controlled by governments. It wasn't always this way. Until about 35 
years ago, the world's oil was largely in the hands of seven 
corporations based in the United States and Europe. Those seven have 
since merged into four: ExxonMobil, Chevron, Shell, and BP. They are 
among the world's largest and most powerful financial empires. But ever 
since they lost their exclusive control of the oil to the governments, 
the companies have been trying to get it back. Iraq's oil reserves, 
thought to be the second largest in the world, have always been high on 
the corporate wish list. In 1998 Kenneth Derr, then chief

[[Page H5640]]

executive of Chevron, told a San Francisco audience, `Iraq possesses 
huge reserves of oil and gas, reserves I'd love Chevron to have access 
to.'
  ``A new oil law set to go before the Iraqi Parliament this month 
would, if passed, go a long way toward helping the oil companies 
achieve their goal. The Iraq hydrocarbon law would take the majority of 
Iraq's oil out of the exclusive hands of the Iraqi Government and open 
it to international oil companies for a generation or more.
  ``In March, 2001,'' continuing to quote from this article, ``the 
National Energy Policy Development Group, better known as Vice 
President Dick Cheney's energy task force, which included executives of 
America's largest energy companies, recommended that the United States 
Government support initiatives by Middle Eastern countries `to open up 
areas of their energy sectors to foreign investment.' One invasion and 
a great deal of political engineering . . .'' later, this is exactly 
what the Iraq oil law would achieve. It does so to the benefit of oil 
companies but to the great detriment of Iraq's economy, democracy, and 
sovereignty.
  ``Since the invasion of Iraq, the administration has been aggressive 
in shepherding the oil law toward passage. It is one of the 
administration's benchmarks for the government of Prime Minister Nuri 
Kamal al-Maliki, a fact that'' the administration officials ``are 
publicly emphasizing with increasing urgency.'' And, that is that these 
are the benchmarks of the administration.
  ``The administration has highlighted the law's revenue sharing plan, 
under which the central government would distribute oil revenues 
throughout the nation on a per capita basis. But the benefits of this 
excellent proposal are radically undercut by the law's many other 
provisions. These allow much, if not most, of Iraq's oil revenues to 
flow out of the country and into the pockets of international oil 
companies.''
  Continuing quoting from the article:
  ``The law would transform Iraq's oil industry from a nationalized 
model closed to American oil companies, except for limited although 
highly lucrative marketing contracts, into a commercial industry.''
  So, again, the nationalized model is now closed to American companies 
except for limited marketing contracts. It would transform that into a 
commercial industry, all but privatized, that is fully open to 
international companies.
  ``The Iraq National Oil Company would have exclusive control of 17 of 
Iraq's 80 known oil fields, leaving two-thirds of known and as of yet 
undiscovered oil fields open to foreign control.
  ``The foreign companies would not have to invest their earnings in 
the Iraqi economy, partner with Iraqi companies, hire Iraqi workers, or 
share new technologies. They could even ride out Iraq's current 
`instability' by signing contracts now, while the Iraqi Government is 
at its weakest, and then wait at least 2 years before even setting foot 
in the country. The vast majority of Iraq's oil would then be left 
underground for at least 2 years rather than being used for the 
country's economic development.
  ``The international oil companies could also be offered some of the 
most corporate-friendly contracts in the world, including what are 
called production sharing agreements. These agreements are the oil 
industry's preferred model but are roundly rejected by all the top oil 
producing countries in the Middle East because they grant long-term 
contracts, 20 to 35 years in the case of Iraq's draft law, and greater 
control, ownership, and profits to the companies than other models. In 
fact,'' this kind of contract is ``used for only approximately 12 
percent of the world's oil.
  ``Iraq's neighbors Iran, Kuwait, and Saudi Arabia maintain 
nationalized oil systems and have outlawed foreign control over oil 
development. They all hire international oil companies as contractors 
to provide specific services, as needed, for a limited duration and 
without giving the foreign company any direct interest in the oil 
produced.
  ``Iraqis may very well choose to use the expertise and experience of 
international oil companies. They are most likely to do so in a manner 
that best serves their needs if they are freed from the tremendous 
external pressure being exercised by the administration, the oil 
corporations, and the presence of 140,000 members of the American 
military.
  ``Iraq's five trade union federations, representing hundreds of 
thousands of workers, released a statement opposing the law and 
rejecting `the handing of control over oil to foreign companies, which 
would undermine the sovereignty of the state and the dignity of the 
Iraqi people.' They ask for more time, less pressure, and a chance at 
the democracy they have been promised.''
  Let me share with this House some basic facts about Iraqi oil 
because, over the past several months, we have had many different news 
agencies citing diverse reports about how much oil Iraq has.
  From the Petroleum Economist Magazine, they estimate that Iraq has 
200 billion barrels of oil. The Federation of American Scientists' 
estimate is 215 billion barrels of oil. The Council on Foreign 
Relations estimates Iraq has 220 billion barrels of oil. And the Center 
for Global Energy Studies estimates 300 billion barrels of oil. These 
figures, by the way, from a report from the Brookings Institution dated 
May 12, 2003.
  Now, for the sake of discussion, let's take this figure of 300 
billion barrels of oil so we can see how much money we are talking 
about here. As I mentioned earlier, the price of oil, somewhere around 
$65 a barrel right now and moving up quickly, as American consumers are 
finding out. It is not unusual to predict at this moment that the price 
of oil could go to $70 a barrel. Now, if it does go to $70 a barrel, we 
are looking here at a potential value of Iraqi oil at being about $21 
trillion. Now, if the foreign oil companies have control over 80 
percent or more, you start to get an idea of the kind of money that is 
at stake here and why there is such pressure being put on the Iraqi 
Government to privatize their oil.
  Now, I would like to turn to a quote further talking about the Iraq 
oil, a basic fact. This from the Global Policy Forum called ``Oil in 
Iraq: the Heart of the Crisis,'' December, 2002:
  ``According to the Oil and Gas Journal, Western oil companies 
estimate that they can produce a barrel of Iraqi oil for less than a 
$1.50 and possibly as little as $1, including all exploration, oil 
field development and production costs and including a 15 percent 
return.

                              {time}  1200

  This is similar to production costs in Saudi Arabia, and lower than 
virtually any country. So again, the desirability of a private 
corporation having Iraq's oil is that their production costs would be 
very low.
  A word about the history of oil exploitation in Iraq. Following World 
War I, the British assumed control of Iraq from the Ottoman Empire. In 
1925, a 75-year concession contract was granted to American, French and 
British oil companies. By 1930, the consortium was in complete control 
of all Iraqi oil. The oil companies controlled the oil fields and 
reaped almost all the profits. It was not until the overthrow of the 
British-installed monarchy in 1958 that the foreign control of oil was 
challenged. In 1961, the consortium's rights were limited to current 
production. And beginning in 1972, Iraq oil resources were 
nationalized, a process that was finalized in 1975.
  Now, here is a statement issued by the Iraqi Labor Union Leadership 
at a seminar held in December of 2006 to discuss this draft Iraqi oil 
law: ``Iraq is rich in national wealth, foremost among which is its oil 
wealth, the essence of the economic life for Iraq and the world, which 
has been a focus of attention of the large, industrialized countries in 
particular.
  ``The British and American oil companies were the first to obtain 
concessions to extract and invest in Iraqi oil nearly 80 years ago. 
After Iraq got rid of this octopus network, these foreign oil companies 
had again attempted to dominate this important oil wealth under 
numerous pretexts and invalid excuses.''
  Indeed, Iraqi oil unions have objected to the Hydrocarbon Act. In an 
open letter to the U.S. Congress dated May 13, 2007, just a little more 
than a week ago, here are some excerpts:
  ``Peace be unto you and greetings to all.
  ``We wish to clarify certain matters relating to events in Iraq for 
our

[[Page H5641]]

friends among the Members of the U.S. Congress. It is common knowledge 
that the occupation spared neither the young nor the old, and that Iraq 
is passing through the most difficult of times because all and sundry 
are hounding it and covet a share of its riches. We see no good reason 
for linking the passing of the feeble Iraq oil law to the withdrawal of 
the occupation troops from Iraq.
  ``Everyone knows that the oil law does not serve the Iraqi people, 
and that it serves the administration, its supporters and the foreign 
oil companies at the expense of the Iraqi people, who have been wronged 
and deprived of their right to their oil, despite enduring all 
difficulties.
  ``We ask our friends not to link withdrawal with the oil law, 
especially since the USA claimed that it came to Iraq as a liberator 
and not in order to control Iraq's resources.
  ``The general public in Iraq is totally convinced that the 
administration wants to rush the promulgation of the oil law so as to 
be leaving Iraq with a victory of sorts.
  ``We wish to see you take a true stance for the children of Iraq. And 
we always say that history will remember those who advance peace over 
war.
  ``With my regards, Hassan Jum'a Awwad, Head of the Iraqi Federation 
of Oil Unions.''
  This now from the Oil union leader's speech on oil law. This is a 
speech of the head of the Federation of Oil Unions in Basra on Tuesday, 
February 6, 2007:
  ``Recently, the Constitution of Iraq, on which the Iraq people voted 
in the most dire and difficult of conditions, notes in clause 111 that 
oil and gas are the property of the Iraqi people. But, alas, this 
clause in the Constitution will remain but ink on paper if the oil law 
and oil investment law being presented to the Parliament are ratified, 
laws which permit production-sharing agreements, laws without parallel 
in many oil producers, especially the neighboring countries. Why should 
Iraqis want to introduce such contracts in Iraq, given that applying 
such laws will rob the Iraqi Government of the most important thing it 
owns?''
  ``We send a message to all of the members of the Iraqi Parliament, 
when debating the oil and investment law, to bear the Iraqis in mind, 
to protect the national wealth, and to look at the neighboring 
countries. Have they introduced such laws even when their relations 
with foreign companies are closer than in Iraq?''
  Now, there is a question that's being raised. Are these oil companies 
just trying to help Iraq gain its wealth? What if Iraq doesn't have the 
ability or the money to be able to get its own oil industry on its 
feet? Does Iraq have to privatize in order to tap its oil wealth? Well, 
the fact of the matter is that Iraq has options beyond privatization to 
develop its own oil capacity.
  According to the Middle East Economic Survey, volume 49, number 2, 
dated March 19, 2007, entitled ``Iraq Open Letter from Iraqi Oil 
Experts to Parliament'':
  ``We anticipate that the motive behind the issuance of this law is 
based on the increase of production capacity through the attraction of 
foreign investments. In this regard, we feel and recommend to plan the 
increase of the capacity gradually, starting with the rehabilitation of 
currently producing fields by national effort, Iraqi National Oil 
Company, followed by the development of the giant discovered, but not 
developed or partially developed, fields, and to schedule the priority 
of their development according to their capacities and development 
costs, irrespective of their geographical locations.'' And it goes on 
to say that there ought to be an avoidance of long-term contracts with 
foreign companies at the present time.
  This is a statement issued by the Iraqi Union Leadership in a 
seminar. And another statement in a seminar in December 2006 in Amman, 
Jordan:
  ``Whereas oil and gas are greatly important for the Iraqi economy and 
whereas the building of the state and its institutions are dependent on 
it as the main source of national income, it is therefore the right of 
the Iraqi people to read the draft oil law under consideration. The 
Iraqi people refuse to allow the future of their oil to be decided 
behind closed doors.''
  In an article by Michael Schwartz called ``The Prize of Iraqi Oil,'' 
``None of these conditions apply in Iraq. Huge reservoirs of easily 
accessible oil are already proven to exist, with more equally 
accessible fields likely to be discovered at little expense. That's why 
none of Iraq's neighbors emphasize production-sharing agreements. Saudi 
Arabia, Kuwait, Iran and the United Arab Emirates all pay the 
multinationals a fixed rate to explore and develop their fields, and 
all the profits become state revenues.''
  Christian Science Monitor, May 18, 2007: ``How Will Iraq Share the 
Oil?'' ``In New York, oil industry analyst, Fidel Geit of Oppenheimer 
Company, Incorporated, has reviewed both the official Arabic version of 
the draft law and the unofficial English translation and say they are 
ambiguous and seem to be written in haste.'' Quote, ``Why shouldn't 
Iraq use Iraqi nationals to decide how contracts will be awarded? They 
have oil engineers. Use the best brains in the country and hopefully 
they will do what is in the best interest of the country,'' he says, 
``otherwise there is an impression that American companies are telling 
Iraqis what to do.''
  Now, I have stated many times on this floor that I believe that the 
war against Iraq was about oil. Now let me provide you with some quotes 
that may reflect on my thinking on this.
  Mr. Dick Cheney, CEO of Halliburton, in a speech at the Institute of 
Petroleum in 1999, said, ``By 2010, we will need on the order of an 
additional 50 million barrels a day. So where is the oil going to come 
from? Governments and national oil companies are obviously controlling 
about 90 percent of the assets. Oil remains fundamentally a government 
business. While many regions of the world offer great oil 
opportunities, the Middle East, with two-thirds of the world's oil and 
lowest cost, is still where the prize ultimately lies. Even though 
companies are anxious for greater access there, progress continues to 
be slow.''
  In an article from Platform, November 2005, called ``Crude Designs: 
The Rip-Off of Iraq's Oil Wealth.'' Chapter four, ``Planning Iraq's Oil 
Future. Preinvasion Planning.'' And when you listen to this, it's 
pretty astonishing to see how all these facts have been available for 
people to be able to gain, and perhaps only now people are reflecting 
on the real meaning of this.
  This is what Greg Muttitt writes: ``Prior to the 2003 invasion, the 
principal vehicle for planning the new postwar Iraq was the U.S. State 
Department's Future of Iraq project. This initiative, commencing as 
early as April 2002, involved meetings in Washington and London of 17 
working groups, each composed of 10 to 20 Iraqi exiles and 
international experts selected by the State Department.
  ``The `Oil and Energy' working group met four times between December 
2002 and April 2003. Although full membership of the group has never 
been revealed, it is known that Ibrahim Bahr al-Uloum, the current 
Iraqi Oil Minister, was a member. The 15-strong oil working group 
concluded that Iraq, quote, `should be opened to international oil 
companies as quickly as possible after the war,' and that, quote, `the 
country should establish a conducive business environment to attract 
investment of oil and gas resources.'
  ``The subgroup went on to recommend production-sharing agreements as 
their favorite model for attracting foreign investment. Comments by the 
hand-picked participants revealed that `many of the group favored 
production-sharing agreements with oil companies.' Another 
representative commented, `Everybody keeps coming back to production-
sharing agreements.'
  ``The reasons for this choice were explained in the formal policy 
recommendations of the working group, published in April 2003,'' and I 
quote from this article from Platform:
  ``Key attractions of production-sharing agreements to private oil 
companies are that, although the reserves are owned by the state, 
accounting procedures permit the companies to book the reserves in 
their accounts, but, other things being equal, the important feature 
from the perspective of private oil companies is that the government 
intake is defined in terms of the production-sharing agreement, and the 
oil companies are therefore protected under a production-sharing 
agreement from future adverse legislation,'' which means it would be 
very

[[Page H5642]]

tough to be able to have a government, once it gives up its oil wealth, 
to be able to get it back.
  ``The group also made it clear that in order to maximize investments, 
the specific terms of the production-sharing agreements should be 
favorable to foreign investors: `PSAs can induce many billions of 
dollars of direct foreign investment in Iraq, but only with the right 
terms, conditions, regulatory framework laws, oil industry structure 
and perceived attitude toward foreign participation.'
  ``Recognizing the importance of this announcement, The Financial 
Times noted: `Production-sharing deals allow oil companies a favorable 
profit margin and, unlike royalty schemes, insulates them from losses 
incurred when the oil price drops. For years, big oil companies have 
been fighting for such agreements without success in countries such as 
Kuwait and Saudi Arabia.'
  ``The article concluded that: `The move could spell a windfall for 
big oil companies such as ExxonMobil, Royal Dutch/Shell, BP and 
TotalFinaElf.' ''
  Now, this article goes on to talk about what has been done to try to 
shape the new Iraq with respect to oil.
  ``The U.S. and the U.K. have worked hard to ensure that the future 
path for oil development chosen by the first elected Iraqi Government 
will closely match their interests. So far it appears they have been 
highly successful. Production-sharing agreements, which were first 
proposed by the U.S. State Department group, have emerged as the model 
of oil development favored by the postinvasion phases of Iraqi 
Government.
  ``Phase one: Coalition Provisional Authority and Iraqi Governing 
Council. During the first 14 months following the invasion, occupation 
forces had direct control of Iraq through the Coalition Provisional 
Authority. Stopping short of privatizing oil itself, this Coalition 
Provisional Authority began setting up a framework for a longer-term 
oil policy.
  ``The Coalition Provisional Authority appointed former senior 
executives from oil companies to begin this process. The first advisers 
were appointed in January 2003, before the invasion even started, and 
they were stationed in Kuwait, ready to move in. First, there were 
Phillip Carroll, formerly of Shell, and Gary Vogler of ExxonMobil, 
backed up by three employees of the U.S. Department of Energy and one 
of the Australian Government. Carroll described his role as not only to 
address short-term fuel needs and the initial repair of production 
facilities, but also,'' point, `` `begin planning for the restructuring 
of the Ministry of Oil to improve its efficiency and effectiveness.' '' 
Another point: `` `Begin thinking through Iraq's strategy options for 
significantly increasing its production capacity.'
  ``In October 2003, Carroll and Vogler were replaced by Mob McKee of 
ConocoPhillips and Terry Adams of BP, and finally in 2004, by Mike 
Stinson of ConocoPhillips and Bob Morgan of BP. The 147,000 pound cost 
of two British advisers, Adams and Morgan, was met by the U.K. 
Government. Following the handover to the Iraq Interim Government in 
June 2004, Stinson became an adviser to the U.S. Embassy in Baghdad.''
  Again, from Platform, On the 13th of July, 2003, ``In the first move 
towards Iraqi self-government, the Coalition Provisional Authority's 
Administrator Paul Bremer appointed the quasi-autonomous, but virtually 
powerless, Iraqi Governing Council. On the same day Mr. Bremer 
appointed Ibrahim Bahr al-Uloum, who had been a member of the U.S. 
State Department oil working group, as Minister for Oil.''

                              {time}  1215

  Within months of his appointment, Bahr al-Uloum announced he was 
preparing plans for the privatization of Iraq's oil sector, but that no 
decision would be taken until after the election scheduled for 2005. 
Speaking to the Financial Times, Bahr al-Uloum, a U.S.-trained 
petroleum engineer, said the Iraqi oil sector needs privatization, but 
it is a cultural issue, noting the difficulty of persuading the Iraqi 
people of any such policy. He then proceeded to announce that he 
personally supported production sharing agreements for upstream 
development, giving priority to U.S. oil companies and European 
companies, probably.
  The second phase, the Iraq interim government. In June 2004, the 
Coalition Provisional Authority handed over Iraq's sovereignty to an 
interim government headed by Prime Minister Allawi. The position of 
Minister of Oil, was handed to Thamir al-Ghadban, a U.K.-trained 
petroleum engineer and former senior adviser to Bahr al-Uloum. In an 
interview in Shell Oil Company's in-house magazine, al-Ghadban 
announced that 2005 would be the ``year of dialogue'' with 
multinational oil companies.
  ``About 3 months after taking power, Allawi issued a set of 
guidelines to the Supreme Council for Oil Policy from which the Council 
was to develop a full petroleum policy. Preempting both the Iraqi 
elections and drafting of a new constitution, Allawi's guidelines 
specified that while Iraq's currently producing fields should be 
developed by the Iraq National Oil Company, all other fields should be 
developed by private companies, through the contractual mechanism of 
production sharing agreements.
  ``Iraq has about 80 known oil fields, only 17 of which are currently 
in production. Thus the Allawi guidelines would grant the other 63 to 
private oil companies.''
  The third phase, the transitional government and writing the 
constitution: ``The interim government was replaced in 2005 by the 
election of Iraq's new National Assembly, which led to the formation of 
the new government with Ibrahim al-Ja'afari as Prime Minister. In a 
move which no doubt assisted policy continuity from the period of U.S. 
control, Ibrihim Bahr al-Uloum was reappointed to the position of 
Minister for Oil.
  ``Meanwhile, Ahmad Chalabi, the Pentagon's former favorite to run 
Iraq, was appointed chair of the Energy Council, which replaced the 
Supreme Council for Oil Policy as the key overseer of energy and oil 
policy. Back in 2002, Chalabi had famously promised that `U.S. 
companies will have a big shot at Iraqi oil.'
  ``By June 2005, government sources reported that a Petroleum Law had 
been drafted, ready to be enacted after the December elections. 
According to sources, although some details are still being debated, 
the draft of the Law specifies that while Iraq's currently producing 
fields should be developed by Iraqi National Oil Company, new fields 
should be developed by private companies.''
  Now, this again comes from an article, Foreign Policy in Focus. The 
title, ``When It Comes to Oil, the U.S. Administration is Bypassing 
Democracy in Iraq,'' an article ``Oil Pressure'' by Greg Muttitt, 
August 28, 2006. It goes on to say: Since the new Iraqi Government was 
formed in 2006, the U.S. Government has dramatically scaled up its 
efforts to provide ``advice.'' Last month, the administration and major 
oil companies reviewed and commented on the new law governing Iraq's 
crucial oil sector before it had even been seen by the Iraqi 
Parliament.
  ``Violating the very notions of freedom and democracy'' the 
administration invokes in nearly every speech, ``the U.S. Government 
has actively intervened in the restructuring of Iraq's oil industry 
since at least 2002.
  In December 2002, the State Department established a working group on 
oil and energy as part of its ``Future of Iraq'' project. The project 
brought together influential exiled Iraqis with U.S. Government 
officials and international consultants. Later, some members of the 
group became part of the Iraqi Government. The result of the project's 
work was a draft framework for Iraq's oil policy. Despite Iraq being 
rich in oil and technical expertise, the group recommended a major role 
for foreign companies through long-term contracts, an approach that 
would set Iraq at odds with the rest of the Middle East where major oil 
producers keep their oil in the public sector.
  ``In March 2003, the wheels started to turn as the Coalition 
Provisional Authority appointed the former head of Shell USA as a 
senior oil adviser, in direct contact with the Iraq Ministry of Oil. He 
was joined by an executive from ExxonMobil, and after 6 months, the 
post was rotated to former managers of ConocoPhillips and BP.
  ``In December 2003, the framework was set out in more detail when 
USAID commissioned a report by the privatization specialists 
BearingPoint,'' is

[[Page H5643]]

the name of the company, entitled `Options for Developing a Sustainable 
Long-Term Iraqi Oil Industry.' The report reinforced the `Future of 
Iraq's' report, recommending long-term contracts with foreign 
companies.
  ``Pointing to the success, as they call it, of this model, 
BearingPoint used Azerbaijan's privatization model as an example. The 
report commented approvingly that Azerbaijan's high corruption and lack 
of democracy had not impeded investment; the government had simply 
given away a higher share of revenues in order to attract companies. 
The implication was that Iraq, which has a nascent democracy and 
chronic corruption, might follow the same approach.
  ``After the handover to the interim government in June 2004, senior 
oil advisers, now based within the Iraq Reconstruction Management 
Office in the U.S. Embassy worked closely with the Iraq Oil Ministry in 
shaping policy. Post holders included executives from ChevronTexaco and 
Unocal.
  ``In 2006, these efforts intensified. In February, the Iraq 
Reconstruction Management Office advisers accompanied eight senior 
officials from the Oil Ministry on a trip to the U.S., sponsored by the 
U.S. Trade and Development Agency. On the trip, they met oil 
company representatives to discuss the future structure of the Iraq oil 
industry.

  ``The same month, at the request of the State Department, USAID 
provided an adviser to the Oil Ministry, again from BearingPoint,'' the 
privatization specialist, ``to work directly on a new oil law providing 
`legal and regulatory advice and drafting the framework of petroleum 
and other energy-related legislation, including foreign investment.' ''
  ``The U.S. campaign on the fledgling Iraqi Government has been 
successful. Following his appointment in May, new Oil Minister Husayn 
al-Shahristani announced that one of his top priorities would be 
writing of an oil law to allow Iraq to sign contracts with `the largest 
companies.' ''
  ``This would be the first time in more than 30 years that foreign 
companies would receive a major stake in Iraq's oil. Oil was brought 
into public ownership and control in Iraq in 1975.
  ``With the ink not yet on the paper, the U.S. has maintained its 
pressure. On his visit to Baghdad in 2006,'' the U.S. Energy Secretary 
``insisted that the Iraqi government must `pass a hydrocarbon law under 
which foreign companies can invest.' But the work to make this case had 
already been done: `We got every indication they were willing and also 
felt a necessity to open up this sector,' he commented after a meeting 
with the Oil Minister and Iraqi officials.
  The Energy Secretary did not stop at reviewing the draft law himself 
in Baghdad. He also arranged for Dr. Al-Shahristani, the new Oil 
Minister, to meet with nine major oil companies, including Shell, BP, 
ExxonMobil, ChevronTexaco and ConocoPhillips, for them to comment on 
the draft as well, during the Minister's trip to Washington, D.C. the 
following week.
  ``Given the pressures involved, perhaps the Minister felt he did not 
have much choice. His promise to pass the law through Parliament by the 
end of 2006 was set in Iraq's agreement with the International Monetary 
Fund last December. According to that agreement, IMF officials would 
also review and comment on a draft in September.
  ``And still, the draft law had not been seen by the Iraqi Parliament. 
Meanwhile, an official from the Oil Ministry had stated that Iraqi 
civil society and the general public will not be consulted at all.
  ``These issues could hardly be more important for Iraq. Oil accounts 
for more than 90 percent of government revenue, is the main driver of 
Iraq's economy. And decisions made in the coming months will not be 
reversible--once contracts are signed, they will have a major bearing 
on Iraq's economy and politics for decades to come.''
  There is much that has been written, an article in the Associated 
Press on March 13, 2007, about how Iraqi leaders fear ouster over oil 
money. Continued White House support for Iraq depended on positive 
action and all the benchmarks, especially the oil law and sectarian 
reconciliation, by the close of this parliamentary session. June 30.
  In an article in the Los Angeles Times, May 13, 2007, Iraqis resist 
U.S. pressure to enact oil law. Foreign investment and Shiite control 
are primary concerns. Here is a quote. ``I did make it clear that we 
believe it is very important to move on the issues before us in a 
timely fashion and any undue delay would be difficult to explain.'' 
That is a quote from Vice President Cheney, who recently visited Iraq 
to urge the passage of the Hydrocarbon Act, among other matters.
  ``The U.S. Energy Secretary calls on Iraq to open up its oil sector 
to foreign investment.'' This is an article from the 21st of July, 
2006, saying that U.S. Energy Secretary Samuel Bodman has urged Iraq to 
establish a legal framework that would be instrumental in attracting 
foreign investment.
  Other articles. From a Department of Energy press release, July 26, 
2006: Secretary Bodman hosts Iraqi Ministers of Oil and Electricity. 
Energy leaders sign memorandum of understanding to further promote 
electricity cooperation.
  From Agence France-Presse, U.S. wants new Iraq oil law so foreign 
firms can take part. July 18, 2006. The United States on Tuesday urged 
Iraq to adopt a new hydrocarbon law that would enable U.S. and other 
foreign companies to invest in the war-torn country's oil sector.
  We all know that the Iraq Study Group, in one of its major 
recommendations, Recommendation 63, said the United States should 
encourage investment in Iraq's oil sector by the international 
community and international energy companies; that the United States 
should assist Iraqi leaders to reorganize the national oil industry as 
a commercial enterprise; that the United States should ensure the World 
Bank's efforts to assure that best practices are used in contracting.
  Mr. Speaker, the last 50 minutes that I have spent talking about the 
effort to try to privatize Iraq's oil, if you go to one of the search 
engines, you can find perhaps 1 million different citations relating to 
this. So it is impossible to cover this kind of a subject, even in a 
period of an hour. But it needs to be said that this administration has 
pushed the Congress to put language in funding bills for Iraq that 
would set the stage for the privatization of Iraq's oil.
  I am going to quote from the first war supplemental, that the 
President shall make and transmit to Congress a determination, No. 2, 
whether the Government of Iraq is making substantial progress in 
meeting its commitment to pursue reconciliation initiatives, including 
enactment of a hydrocarbon law. Then under subsection (b), it says if 
the President fails to make this determination, the Secretary of 
Defense shall commence the redeployment of our Armed Forces from Iraq.
  In other words, privatize your oil, or we are leaving you without 
having a security and peacekeeping force to replace the United States 
Army.

                              {time}  1230

  In the second supplemental, the administration language promoted the 
President transmitting to Congress a report in classified and 
unclassified form, article 2, whether the Government of Iraq has 
enacted a broadly accepted hydrocarbon law that equitably shares 
revenues among all Iraqis.
  Now again, they don't talk about what the real purpose of the 
Hydrocarbon Act has been. It is not about sharing revenues equitably; 
it is about a complex restructuring of Iraq's oil industry for the 
purpose of turning Iraq's oil over to private oil companies.
  Finally, in the third supplemental that is before this Congress this 
week, there is an article from the Senate side that relates to Iraq 
oil, and I quote: ``The United States strategy in Iraq shall hereafter 
be conditioned on the Iraqi Government meeting certain benchmarks.'' 
And one such benchmark, ``enacting and implementing legislation to 
ensure the equitable distribution of hydrocarbon resources of the 
people of Iraq.'' And it goes on to pay homage to the issues of equity 
and ethnicity.
  Madam Speaker, it is clear that the people of Iraq are under enormous 
pressure to give up control of their oil. When you consider that there 
was no cause to go to war against Iraq, that Iraq did not have weapons 
of mass destruction, that Iraq had nothing to do with 9/11, that Iraq 
had nothing to do with al Qaeda's role in 9/11, that the administration 
kept changing the reason

[[Page H5644]]

why we went into Iraq, and here we are, years later, we are still in 
Iraq, and enormous pressure is being put on the Iraqi Government to 
privatize their oil.
  I am here to say that there is another path that can be taken, and 
that path is part of H.R. 1234, a bill that I have written that would 
enable the war to end by Congress determining that no more money will 
go for this war, telling the administration that it must open up 
diplomatic relations with Syria and Iran, and moving in a direction 
where we put together an international peacekeeping and security force 
that would move in as our troops leave. And then we set the stage for 
real reconciliation that cannot come with the U.S. serving as an 
occupying army.
  We have a moral responsibility to the Iraqi people whose country we 
have ravaged with war to the tune of hundreds of billions of dollars of 
damage, whose people may have experienced the loss of perhaps as many 
as a million Iraqis during this conflict, innocent people, whose social 
bonds have been torn asunder. We have a moral responsibility to work to 
bring about a program of reconciliation between the Sunnis, Shiites and 
the Kurds which can only come when we end the occupation. We have a 
moral responsibility to bring about an honest reconstruction program, 
absent the U.S. contractors who have been gouging the Iraqi people, and 
gouging the American taxpayers as well, but we have to make sure that 
the Iraqi people have control of their oil.
  I would like to believe that this war has not been about oil. I would 
like to believe that there was some kind of a righteous cause connected 
to what we did; but I know better, and the proof is in this Hydrocarbon 
Act.
  This Congress has an opportunity to finally take a stand and reject 
this Hydrocarbon Act. We can strip out this provision forcing Iraq to 
privatize its oil. We can strip that out of the legislation. Or we can 
simply defeat the legislation because that is in there, and then go 
back to the boards and tell the President, look, Mr. President, we are 
not going to give you any more money for this war, which is what I 
believe we should do. Tell the President, this war is over, Mr. 
President, and use the money that is in the pipeline to bring the 
troops home. Let's go and reach out to the international community. 
With the end of the occupation and the closing of bases, we will have 
people who will start listening to us internationally, and we will have 
some credibility.
  But the morality which this country rests on, our heart and soul of 
who we are as Americans, is not reflected by this obscene attempt to 
steal the oil resources of Iraq. That is why I have chosen to take this 
time to come before the Congress, to lay these facts out for Members of 
Congress and for the American people so that you can see without 
question the relationship between war and this oil and the relationship 
between the pressure that is being put on the Iraq Government right now 
and privatization and the continuation of the war.
  Let's end this war. Let's end the attempt to control Iraq's oil. 
Let's challenge the oil companies in this country as this House has 
done this morning. Let's take a stand for truth and justice. Let's take 
a stand for what is right. Let us not be seduced by this idea that 
somehow we have the military might, and we can, therefore, grab other 
people's resources. That is not what America is about.
  America has a higher calling in the world. It is time we began a 
process of truth and reconciliation in our own country, in reaching out 
and creating the healing of America. But we must first begin with the 
truth, and the truth is what I have told this Congress today.
  Madam Speaker, thank you.
  Members of Congress, thank you.

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