The Aaron Harber Show


The War is Over
Iraqis Solve America's Politcal Dilemma

July 19, 2008
By Aaron Harber

Part 1: Wake Up! - We Won The War!

One of the most fascinating aspects of the War in Iraq is the disconnect between (a) the rhetoric on both sides (simplistically put, pro-war versus anti-war contingents) in the United States, as the presidential campaign is being waged, and (b) what actually is happening in Iraq.

In reality, the War is over. America has won (or won as much as we're going to win) and it is now time to head home. The battling sides have failed to even acknowledge the fact we began "going home" several months ago as the extra troops from the Surge began heading back (albeit in chronological order based on assignment lengths). In essence, the American presence peaked and then our gradual withdrawal began. And the reality is, with the exception of a very brief multi-six-week period of reassessment, the withdrawal will continue.

Despite the American-centric nature of the debate within the United States - almost solely focused on what we should or should not do - while our own debate rages, the War in Iraq is being resolved by the people of Iraq and its federal government. And Americans would be surprised to find these same people - and not the United States - are defining what the U.S. role should be.

In 2007 and 2008, the United States and Iraq were engaged in extensive negotiations for a long-term security pact which would define the role of the U.S. military in Iraq for years to come but negotiations collapsed. At one point, the U.S. expected the Iraqis to acquiesce to almost any American demand in exchange for the protection we offered. U.S. negotiators, however, found a different set of positions from the Iraqis.

The reality today is the Iraqi people not only want U.S. troops out of their country but believe they can take care of their own security needs. Hopefully, their assessment of their readiness is accurate.

The reason for this confidence on the part of Iraqi leaders can be attributed to the success of American military operations in Iraq. U.S. troops have done an extraordinary job training the Iraqi military. And the success of the Surge gave the Iraqi government the time it needed not only to become stabilized but to gather the resources necessary to begin offenses against the remaining insurgents.

It is true some Iraqi political groups are calling for the immediate departure of American troops so these groups can play a greater role politically and militarily in Iraq. Many of these groups seek to destabilize Iraq. But the combination of those, albeit with differing motivations, who want us to leave, create a large majority of opinion which now dominates the debate and the decision-making process.

Perhaps the greatest change is the confidence exuded today by Prime Minister Nouri al-Maliki. It is genuine and has been demonstrated on the ground, militarily, several times in the past several months. While not always successful at first, the Prime Minister has been relentless in his effort to root lawlessness from within his nation. Most noticeable has been the progressively less visible and less important role U.S. troops have played in each successive Iraqi military operation in 2008.

While U.S. experts may not be as sanguine about the level of preparedness of the Iraqi military, the decision about what the Iraqi military can do ultimately belongs to the Iraqi government - not us. And that government has made it clear it believes it is nearly ready to "go it alone."

That is great news for Iraq and for the United States. It is wonderful news for our troops and for our overtaxed military. But what it means politically back in the United States is what is most fascinating because the truth is the War is over.

Part 2: The Political Implications Of The War's End.

The debate about the role of the United States in Iraq has been raging for years and was the center point of the Democratic primary election contest, with candidates arguing who was against the War "the most" and who would get us out the fastest. Even the Republicans became embroiled at times in the debate - with John McCain breaking ranks and making it clear he was a staunch supporter of the U.S. effort in Iraq despite its unpopularity.

Ironically, the War in Iraq may not matter in the November General Election. The War is over and the role of the United States is being defined by the country it is in - not by American voters, the Pentagon, the President or anyone else.

With the primary election season over and many electoral decisions having been made by voters concerned about the War, they now are finding there is little to debate. In fact, the debate about the War in Iraq has been quickly reduced to differences which border on minutia.

Senator Barack Obama wants the U.S. to withdraw in 16 months. He is likely to find the logistics of the process and the need for time to make an orderly withdrawal could extend that timetable but even in the worst case scenario, that would not be more than 24 month (i.e., two years). That's only an extra eight months than he may have desired. But that extra time is likely to ensure the competency of the Iraqi military.

Obama's plan would reduce the stress on the U.S. military, whose troops have performed extraordinarily under difficult and demanding circumstances (especially related to those who had to serve multiple tours, some of which were extended to 1¼ years apiece).

Senator John McCain was castigated for saying it was possible the U.S. would have a military presence in Iraq for up to 100 years - referencing the fact we already have had troops stationed in Europe and South Korea for the better part of a century. His statement was reasonable, however, when understood in the context he made it - i.e., the U.S. should be willing to play a peacemaking role in the Middle East with part of that function including troops based in Iraq.

McCain is oriented towards removing troops based on when certain objectives are achieved. If troop withdrawals are based on milestones rather than artificial timetables, McCain's approach makes sense. But the reality is Iraq's leadership is not going to give him that option. Rather, they are telling us they want U.S. troops out as soon as possible and they are the ones who will set the milestones. It is their country and the United States would look awful if we were to try to dictate any other timetable. We will be consulted but Iraq, as a sovereign nation with a government we have argued is legitimate, will have the last say.

Given the desires of the Iraqi people and their leadership, McCain likely would face a maximum timetable of approximately 24 months - the same as Barack Obama. Thus, in the end, it may not matter who is elected President as far as Iraq is concerned because we will be departing that country at approximately the same time, regardless of this November's results.

The exercise of this decision-making power by Iraq only serves to further prove it, indeed, is a sovereign power not under the control of the United States. Will the road be rocky for the Iraqis? Yes, it likely will be very difficult. There will be setbacks. But it is their country and they have the right to make these decisions - even if they are mistaken or we don't always agree with them.

Hopefully, the United States will be there to lend a hand (although not primarily in a military role) to Iraq. If we assist with their economic development efforts, the final chapter could be a win/win for all concerned. That, too, will be a decision left to the Iraqis.

Part 3: Why Couldn't We Make A Long-Term Deal?

A difference of perspective ruined any chance of a long-term security agreement between Iraq and the United States. We wanted it for more reasons than to just protect Iraq and the Iraqi leadership knew this. Our objectives were complex (involving the entire Middle East) and long-term (multiple decades in length). Their objectives were simple (assert complete control over their own country) and short-term (assert that control as quickly as possible). It was an oil-and-water mix and we failed to appreciate the extent of those differences.

The Iraqis remain eager to have protection provided by the United States but want to limit the scope of America's presence and activities in Iraq as well as the length of time we would stay there. The U.S., on the other hand, sees its bases in Iraq as part of a larger Middle East security strategy. Securing bases for troops and operations is difficult in the Middle East so the U.S. Military understandably wants to take advantage of the opportunity Iraq offers.

The bilateral treaty which was being negotiated evolved from (1) a long-term, multi-year agreement which could have been the foundation for a U.S. presence measured in decades to (2) a short-term agreement which will give the U.S. time to conduct an orderly withdrawal. The final agreement will be an extraordinary transformation in position for both parties.

When a long-term agreement was contemplated, the Bush Administration believed it could have approved the security pact without the consent of the United States Senate. That consent is usually required for the U.S. to sign and approve any significant treaty (especially of a military nature) with a foreign nation.

The Bush Administration understandably feared submission of the treaty could have resulted in a wide-ranging debate fraught with political peril about the role of the U.S. in Iraq and the entire Mideast. Rather than fear that prospect, however, the Administration should have welcomed it.

But today this all is moot. The ultimate version of the agreement is likely to be so modest in scope that successfully securing the "advice and consent" of the Senate would not be a problem. There is no one in the Senate who is likely to oppose a short-term agreement which is focused on the completion of our orderly withdrawal from Iraq.

Part 4: Why Iraq Does Not Need America.

What the falling dollar and rising price of oil have done, when combined with the less frequent attacks interrupting the oil infrastructure in Iraq, is result in an abundance of wealth for Iraqis. With two million barrels of oil flowing daily, at an average rate of $130 per barrel, the Iraqi government is generating over quarter of a billion dollars per day in revenues.

This kind of wealth allows the Iraqi government to address its country's needs in a serious manner. It allows it to declare its independence from the United States sooner than later. And it represents the kind of wealth which reduces the friction among various political and religious sects as it is evident there is enough for everyone. While corruption remains a major issue and the allocation of oil revenues remains only partially addressed, these are problems for the Iraqis - not Americans - to solve. And the Iraqis are taking on these challenges in their own way.

It is the increase in oil production coupled with the increase in the price of oil which has generated this extraordinary resource of wealth. Few people remember, oil was just $30 per barrel when the War in Iraq began over five years ago. It has almost quintupled since then.

If Iraq ultimately sells five million barrels a day and the price of oil goes to $200 per barrel, its riches will be astonishing. This would generate $1 billion daily and easily would meet all of the reconstruction and military needs of the nation. And that is where Iraq may be headed.

Iraq has an estimated 115 billion barrels of proven oil reserves and may have an additional 100 billion barrels which have yet to be included in the proven reserves category. At an average of $150 per barrel, that represents a potential revenue total of over 32 trillion dollars. And while the price of oil may fluctuate based on the limping global economy (perhaps temporarily sending oil down to $90 per barrel), the growth of the world's population from 6½ billion people to 9½ billion people over the next 40 years along with the concomitant explosion in the size of the world's middle class combine to make $225 per barrel oil a likely reality.

In addition to the oil reserves, Iraq is estimated to have 110 trillion cubic feet of natural gas and that number eventually could be double or triple the proven total. This represents an additional potential $1 to $3 trillion dollars, resulting in a potential cumulative yield of $35 trillion for its long-term hydrocarbon production.

Even after discounting for the cost of energy production and delivery, this potentially represents an average of approximately $1¼ million per Iraqi citizen in a country whose per capita income has ranged in recent years between $1,000 and $4,000. And, if energy prices continue to climb, this per-citizen total calculation of over $1 million per person could be even greater. Today, the per capita annual income of Iraqi citizens is about $4,000 while per capita oil revenues alone are now headed towards approximately $3,400 annually.

Part 5: The Fight To Control Iraqi Oil Resources.

The political debate in the United States over control of Iraqi oil borders on the absurd. Iraq has the third largest proven oil reserves in the world. Topped only by Saudi Arabia and Iran, Iraq is in an enviable position given the extent of its natural energy resources.

Today, multinational firms already are in Iraq, helping the nation develop its oil resources. Given the extremely high royalties paid to the Iraqi Government, it is difficult for anyone to complain Iraqi resources are being unfairly exploited. While royalties in the United States typically run between 10 and 20% for mineral rights owners, the Iraqi Government's royalties often reach 85% of net profits (i.e., after costs have been reimbursed).

Therefore, even after costs are taken into consideration, the Iraqi's have demonstrated their ability to drive a hard bargain. And, because the Iraq governments have and own the oil, energy companies are in a take-it-or-leave-it situation. Smart companies would rather have 10 or 20% of $10 billion in gross revenues than nothing so, for the most part, they have taken the deals.

The Iraqi provincial government in Kurdistan has signed a number of oil exploration and production deals in 2007 and 2008 with a variety of international companies. American firms remain in the numerical minority and have to compete with a wide array of international companies. The U.S.A. may have liberated Iraq and its oil but we are not getting any special treatment because of that effort.

An overlooked consideration in America is the reality of Iraqi oil in the world marketplace. Even if Iraqi oil were to be controlled by a foreign power antagonistic to the United States, the likelihood those resources would reach the global oil marketplace is very high.

If, for example, Iraq sold oil only to China and refused to sell it to the United States, the impact might be minimal. This is due to the fact China then would not be buying that quantity of oil from other sources - i.e., freeing up those other sources to sell the same amount to the U.S.

Certainly, as oil-producing countries collaborate, the U.S. is negatively impacted by collusion on production volumes and price. Iraq already is a member of the Organization of Petroleum Exporting Countries so it is too late to worry about it joining a cartel. As a long-time OPEC member, Iraq already is acting in what it believes is its best interests - and not the best interests of the United States. That should not be a surprise or unexpected by anyone.

The reality today is Iraq is an oil-rich nation which can afford to pay for any U.S. support Iraq wishes to have. Iraq is likely to sell its oil to the highest bidder. Why would it not do this? And Iraq will get exploration and production assistance from a wide variety of international firms, a minority of which are likely to be American.

The good news is Iraqi oil dollars already are more than sufficient to pay the costs of the country's reconstruction. It is a wonderful position the Iraqis have today and everyone in America should be pleased at their good fortune - a financial windfall which allows the United States to end its seemingly unlimited expenditures on a nation which today can pay its own way.


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