Senator Chuck Schumer recently showed oil companies what a level playing field looks like -- in Iraq. And he intends to make the Iraqi government contribute to reconstruction costs if they cut deals with oil companies outside the context of a national hydrocarbon law.
Senator Chuck Schumer recently showed oil companies what a level playing field looks like -- in Iraq. And he intends to make the Iraqi government contribute to reconstruction costs if they cut deals with oil companies outside the context of a national hydrocarbon law.
It's an instructive story as Congress gets close to a vote on offshore energy drilling. If Schumer can level the playing field in Iraq, why not here at home?
Last summer, Schumer and a group of Democratic senators appealed to Secretary of State Condoleeza Rice to block six no-bid contracts that Western oil companies had secured from the Iraqi government. The reason? The Senators were concerned that the contracts would undermine the efforts of Kurds, Sunnis and Shiites to come to agreement on a national oil law and a formula for sharing oil revenues.
Last week, the Iraqis canceled the no-bid contracts with Exxon, Chevron, Shell, Total, BP and other companies. Schumer said:
I'm glad the Iraqis heard our plea that to do this now would be bad for Iraq and bad for Iraqi-American relations.
Schumer said the next step is to make progress on the long-term goal of passing a national hydrocarbon law in Iraq; and to help put pressure in favor of achieving that goal, Schumer said he'd propose an amendment to the next defense appropriations bill.
The amendment would require the Iraqi government to turn over profits from contracts with oil companies to defray the cost of reconstruction, if those contracts are put in place before a national hydrocarbon law.
In other words, Schumer is not ready to let US taxpayers foot the bill for reconstruction in Iraq while oil companies walk off with lucrative government contracts, and the Iraqi government rakes in oil revenues without contributing to a comprehensive national solution.
If Schumer has his way, the oil companies and Iraqi government ministers are going to be blocked from sweetheart deals while the US military babysits at taxpayer expense.
Time to put the greater good first in Iraq. Now how about in domestic US waters?
See: Iraq Cancels Six No Bid Oil Contracts (NYT)