Politics & Policy

Big Oil Chutzpah

We’re surprised that Sen. Chuck Schumer can keep straight which foreign countries he’s haranguing to pump more oil and which he’s haranguing to stop pumping more oil. A few weeks ago the New York senator and aspiring global Petroleum Czar was threatening to block arms sales to Saudi Arabia if it didn’t produce more oil. Now, he’s outraged that the Iraqi government may give modest no-bid service contracts to Western oil companies as a first step toward more fully exploiting the country’s vast oil reserves. Perhaps Sen. Schumer would approve if the Saudis were to agree to pump the Iraq oil?

Consider the peregrinations of the Democrats on the question of Iraq and oil. At first, many of them charged that Iraq was a “war for oil.” Then, they complained that then-Deputy Secretary of Defense Paul Wolfowitz had been wrong in his pre-war reassurance that Iraq could pay for much of its own reconstruction — i.e., it wasn’t enough of a war for oil. By this past April, when Gen. David Petraeus testified before Congress, they were practically banging the table demanding that Iraq pay for more of the war with its own oil revenues. Now, with Iraq moving to earn more of such revenues slated for reconstruction, Schumer — together with Sens. John Kerry and Claire McCaskill — is urging Secretary of State Condoleezza Rice to step in and quash the deal.

Where to start? First, with the fact that Iraq is a sovereign country. It has a perfect right to develop its resources in any manner it pleases (although we have a right to expect it to be mindful of all we have sacrificed on its behalf). Second, it has been unanimously considered — until now — a sign of health if Iraq produces more oil. How many times have we heard from Democrats over the years that Iraq is not even back to its pre-war levels of production? Well, now it is finally at 2.5 million barrels a day again, and set to go higher. Third, the Iraqis hope through the arrangements with the Western companies to increase production by half-a-million barrels a day in the short term, half of the amount of increased production Schumer wanted to pressure out of the Saudis.

The big firms involved — Exxon Mobil, Shell, Total, and BP — have been advising the Iraqi oil ministry without charge for two years. The Iraqis understandably treasure their expertise and technology, which can increase the productivity of current fields. The contracts will probably give the firms a head-start in the competition to develop Iraq’s highly coveted new oil fields, but what of it? It is bizarre for U.S. senators to be upset that U.S. companies have a leg up on foreign competition.

Of course, anti-“Big Oil” demagoguery is at the bottom of Democratic senators’ plaint. McCaskill said, “It doesn’t take a rocket scientist to connect these dots — Big Oil is running Washington and now they’re running Baghdad.” O.K., but who is running Claire McCaskill’s brain? The high-minded sheen Schumer et. al. put on their position is that without an oil law’s having passed to divvy up revenues among the country’s factions, additional revenues will only exacerbate Iraq’s sectarian strife.

Everyone agrees that Iraq needs an oil law, but this contention is absurd on its face. Schumer makes it sound like the gravest threat to the Iraqi state is more revenue. The fact is that sectarian strife has drastically diminished as oil revenues have been rising. That is because the troop surge that Schumer and his colleagues opposed has nearly ended Iraq’s civil war. It’s rich to hear Schumer berate an Exxon Mobil official at a hearing for supposedly working to undo the work of Gen. Petraeus and our troops when that has been the Democrats’ Iraq-war platform going on two years. Chutzpah? Sometimes you would think Sen. Schumer invented the word.

The no-bid contracts are a stopgap until an oil law passes and more extensive contracts can be bid for Iraq’s undeveloped fields. Iraq’s oil ministry is hardly a model of efficiency. The contracts to which Schumer so objects are still hung up in negotiations. But Iraq is headed in the right direction. One could be forgiven for getting the sense sometimes that it is that progress that bothers Democrats most.


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