Indeed, if any debate provides a window on the complexity of trying to win compromise in Iraq, it’s the ongoing discussion over the draft oil and gas law. The legislation, due to be debated in the coming days after months of painful drafting by Iraq’s Shiite, Sunni and Kurdish political factions—and endless prodding by U.S. diplomats—outlines how to exploit the country’s massive oil and gas reserves. But even Ali Baban, the minister of planning for the Iraqi government and one of they key architects of the bill, says he wouldn’t give it better than a 50-50 chance of winning parliamentary approval. “Oil will be one of the cards in the political conflict,” he said in an interview Wednesday. “I think it will be a threat to the unity of the country.”
Baban is considered a moderate Sunni politician, but his views on managing some of the world’s largest oil reserves are inevitably skewed by Iraqi politics. The draft bill gives Iraq’s regions broad authority to develop oil fields within their regions and negotiate product-sharing agreements with foreign petroleum companies, subject to approval by a national oil council. This suits the Kurds, who have dozens of untapped fields in the north but need foreign help to get the black gold out. The minority Sunnis, however, have far fewer resources and want Iraq’s entire hierarchy, oil or otherwise, to be centralized in Baghdad so they aren’t marginalized. The majority Shiites have an abundance of oil fields in the south, but given that they also control the national government, they have an interest and having oil resources centralized. What’s resulted is an unlikely coalition against the draft bill that includes Shiite nationalists suspicious of U.S. oil companies, fatwa-issuing Sunni clerics and oil-union leaders. Even the Kurds, who stand to gain the most, came out against the bill in recent days, claiming it was watered down by the cabinet in the eleventh hour to strip away some of the region’s authority. Given that some Sunni and Shiite political blocs are already boycotting Parliament sessions, any oil legislation that squeaks through may not be worth the paper it’s written on. “Such a law needs to be passed by a great majority, not a simple majority,” says lawmaker Hashim Hassani. “If it is just a simple majority, there could be more problems later.”
It’s ironic—but not surprising—that the notion of meeting a U.S.-mandated benchmark could cause more problems. The draft law before Parliament doesn’t include provisions for equally and fairly dividing Iraq’s oil wealth among its Shiite, Sunni and Kurdish populations. That contentious issue is dealt with in a separate piece of legislation that still has not been approved by the cabinet of Prime Minister Nuri al-Maliki. The draft oil and gas law is a regulatory umbrella under which Iraq’s hydrocarbon resources are managed, explored and developed. The problem is that this only attempts to resolve a dispute between the Kurds, who want local control over oil fields, and Sunni and Shiite Arabs who favor more national control. The benchmark does nothing to address the core issue facing Iraq, namely sectarian violence between Sunnis and Shiites. With all its flaws and despite opposition, the draft law was sent to Parliament anyway because of U.S. pressure for the Iraqi government to meet the benchmarks, lawmakers told NEWSWEEK. Any delay “would give the U.S. a signal that the Iraqis were unable to accomplish an agreement,” Baban says, which would be “additional evidence that their mission in Iraq is hard—if they haven’t discovered this conclusion already.”
Closer examination of other benchmarks suggests they either don’t remedy the core issues fueling sectarian violence or instead invite further political deadlock. Disputes over issues such as distributing oil revenues or constitutional amendments are primarily between Kurds and Arabs, or Kurds and Sunnis. Even if Sunni political parties push through constitutional changes giving the central government greater powers, backed by the majority Shiites, the Kurdish population would likely reject them in a referendum, sending the process back to square one. While organizing provincial elections looks good on paper, the leading Supreme Islamic Iraqi Council, or SIIC, would be hesitant go along because it would likely lose influence in the south to the movement of radical cleric Moqtada al-Sadr, a fellow Shiite. It’s also hard to imagine Sadr and SIIC leader Abdul Aziz Hakim, both of whom had multiple relatives brutally murdered by Saddam Hussein’s regime, openly embracing a reversal of the de-Baathification program, which is another benchmark set by the Bush administration. “What’s going on is not about sharing oil revenues or changing the Constitution, or getting jobs for ex-Baathists—it’s an existential struggle,” says Peter W. Galbraith, a former U.S. diplomat and author of “The End of Iraq.” “We have a remedy aimed a solving a dispute between Kurds and Arabs when the problem is a war between Sunnis and Shiites.”
The ongoing debate on the draft oil law underscores just how difficult it will be to find a compromise between Iraq’s three main groups. Production-ready fields in the Kurdish north are geologically difficult to exploit, requiring the regional government to sign agreements with foreign firms through which they would extract the oil in return for a percentage of the profits. Sunni political groups, fearful that having such broad regional authority would nudge the Kurds closer to independence, want greater central oversight on contracts. They are echoed by some Shiite groups like Sadr’s movement, which doesn’t like the idea of American and British petroleum companies sharing in the spoils and wants the country’s oil industry to remain nationalized like other gulf states. The Kurds reject this idea, and given Iraq’s woeful current production levels, the decay of its oil industry infrastructure and the limitations of the Iraq National Oil Company, they have a strong argument. “If their goal is to dramatically increase oil production, how could they do it without foreign participation?” says Charles Esser, an energy analyst with the Brussels-based International Crisis Group. “It’s going to be quite expensive even though production costs in Iraq are fairly low.” However, Tariq Shafiq, an Iraqi oil consultant who helped write the initial draft law, says Iraq should seek foreign technical expertise and management skills but limit foreign investment into its oil industry.
Amid the ongoing debate, the U.S. military “surge” continues. While today’s report warns of “tough fighting” during the summer, U.S. military officials say they believe the increased troop presence is working to reduce bloodshed. “Sectarian violence has come down,” says Col. Steve Boylan, spokesman for Gen. David Petraeus, the top U.S. commander in Iraq. “Violence against the civilian population is the lowest we’ve seen in a year.” But the Iraqis’ process of meeting benchmarks, he admits, is operating on a different timeline, and patience is wearing thin in Washington. Today’s report—and the Bush press conference—were intended to buy some time on that front. But with little more than two months to go before Petraeus and Ryan Crocker, the American ambassador to Iraq, are due to deliver a September progress report to Congress, the clock may just be ticking too fast.
