Oilfieldtobymelvillegetty

Today is a good day to re-read my friend Jim Holt's alarmingly prescient piece in the LRB last fall when he declared the Iraq war a great success:

The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.

Who will get Iraq’s oil? One of the Bush administration’s ‘benchmarks’ for the Iraqi government is the passage of a law to distribute oil revenues. The draft law that the US has written for the Iraqi congress would cede nearly all the oil to Western companies. The Iraq National Oil Company would retain control of 17 of Iraq’s 80 existing oilfields, leaving the rest – including all yet to be discovered oil – under foreign corporate control for 30 years.

Ta-da! The deal just announced for US oil companies is not just any old deal. It's a series of no-bid contracts:

Imagine. At the precise moment when demand for oil was the highest in history, a recently democratized country with enormous reserves had the chance to sell extraction contracts to the highest bidder. This was a country that desperately needed the revenue to help rebuild its schools, power grid and water supply after a long internal conflict. So why did it hand out the contracts with no auction at all?

Because the US told them so. You don't get to conquer a new province and not get any spoils, do you? Who needs ANWR or a carbon tax when you can drain Iraq at record high oil prices?

(Photo: Toby Melville/Getty.)

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