February 27, 2007
Iraqis Reach an Accord on Oil Revenues

By EDWARD WONG
BAGHDAD, Feb. 26 — The Iraqi cabinet approved a draft of a law on Monday that would set guidelines for nationwide distribution of oil revenues and foreign investment in the immense oil industry. The endorsement reflected a major agreement among the country’s ethnic and sectarian political blocs on one of Iraq’s most divisive issues.

The draft law approved by the cabinet allows the central government to distribute oil revenues to the provinces or regions based on population, which could lessen the economic concerns of the rebellious Sunni Arabs, who fear being cut out of Iraq’s vast potential oil wealth by the dominant Shiites and Kurds. Most of Iraq’s crude oil reserves lie in the Shiite south and Kurdish north.

The law also grants regional oil companies or governments the power to sign contracts with foreign companies for exploration and development of fields, opening the door for investment by foreign companies in a country whose oil reserves rank among the world’s three largest.

Iraqi officials say dozens of major foreign companies, including ones based in the United States, Russia and China, have expressed strong interest in developing fields or have done some work with the Iraqi industry. The national oil law would allow regions to enter into production-sharing agreements with foreign companies, which some Iraqis say could lead to foreigners reaping too much of the country’s oil wealth.

Iraqi officials say all such contracts will be subjected to a fair bidding process, but American inspectors have reported that the upper echelons of the government, including the senior ranks of the Oil Ministry, are rife with corruption. There are also fears among non-Americans that American companies could be favored.

But oil industry analysts in the United States say it is unclear whether companies will rush to sign contracts because the law is vague about what legal protections investors would be given.

The oil law and several related measures must still be approved by Parliament before they are enacted. Since the American-led invasion in 2003, Iraqi politics have often been split bitterly along ethnic and sectarian lines, and that kind of conflict could stall the law’s passage. Drafts were debated for months by a committee before the cabinet finally approved one.

“At the end of the day, we all supported this thing because it’s workable for all the parties,” said Barham Salih, a deputy prime minister and the head of the committee.

Distributing revenue by population is not guaranteed to placate the feuding parties because no accurate census exists. There is intense disagreement over demographics in Iraq — many Sunni Arabs insist they are the majority of Iraqis, even though Sunni Arabs are generally estimated to be 20 percent of the population, Kurds 20 percent and Shiite Arabs 60 percent.

If the law is passed, its effect on the oil industry could be enormous, assuming that foreign companies would be willing to work here despite the violence. Iraq has 80 known oil fields, 65 of which will be offered for bids for development contracts, said Hussain al-Shahristani, the oil minister.

Iraqi leaders say they want the 275-member Parliament to approve the law before May. The legislature is in recess but is expected to reconvene next month. American and Iraqi leaders had tried to get the law approved last year, but the effort bogged down at the drafting level. Before the cabinet vote on Monday, the main Sunni, Shiite and Kurdish political blocs agreed to work together to ensure that the law passes Parliament in an expeditious manner, Mr. Shahristani said.

Since last year, senior Bush administration officials and top American commanders here have said a new oil law is crucial to the country’s political and economic development, and they have pressured Iraqi leaders relentlessly to make passage of the law a priority.

In recent weeks, Ambassador Zalmay Khalilzad, the senior American envoy here, has been in intense talks with Kurdish leaders in the north to overcome their objections to the draft, which centered on the contracting powers given to the central government versus the regions. Iraqi officials say Mr. Khalilzad’s negotiations were crucial to winning unanimous cabinet approval on Monday.

“This is a significant political achievement because leaders representing all of Iraq’s communities have demonstrated that they can pull together to resolve difficult issues of vital national importance,” Mr. Khalilzad said in a written statement on Monday evening. “The drafting of this framework law was not easy. It presented special challenges for the Iraqi and Kurdistan regional governments, and the leaders of key political blocs.”

Several members of the committee overseeing the drafting said in interviews that they were confident that Parliament would ultimately endorse the law, but perhaps only after heated debate.

“It will be tough,” Mr. Salih said. “I want to admit it and I want to recognize that. It will be an interesting roller coaster, my friends.”

The writers of the draft law tried to balance the powers of regional and central governments, an issue that goes directly to the heart of the Iraq war.

The minority Sunni Arabs, who ruled Iraq for decades before the toppling of Saddam Hussein and are now leading the insurgency, have chafed at rule by the Shiites and Kurds partly because they fear that those two groups might hoard oil wealth for themselves. Sunni Arab leaders have resisted attempts by the Kurds and some Shiite politicians to create laws allowing for greater regional autonomy.

The draft law says that all revenues from current and future oil fields will be collected by the central government and redistributed to regional or provincial governments by population, in theory ensuring an equitable distribution of profits. That method could help assuage Sunni Arabs hostile to Kurdish and Shiite autonomy.

The attitudes of Sunni Arabs could also soften if more oil exploration is done on their land. Iraqi officials recently increased their estimates of the amount of oil and natural gas deposits in Sunni Arab territory after paying tens of millions of dollars to foreign oil companies to re-examine old seismic data across the country and retrain Iraqi petroleum engineers.

Industry and government analysts in and outside Iraq estimate the proven oil reserves at 115 billion barrels. Oil production peaked at 3.7 million barrels a day in 1979, according to the United States Department of Energy. Production stood at 2.6 million barrels a day before the 2003 invasion, but has dropped since.

The oil law’s drafters reached agreement on the principle of revenue sharing fairly early in the process. Much more contentious was the issue of signing oil contracts. The Kurds, who have enjoyed de facto independence in the mountainous north since the end of the Persian Gulf war in 1991, argued strongly for regional governments or companies to have full power in signing contracts with foreign companies to develop oil fields. Sunni Arab leaders insisted on keeping this power in the hands of the Oil Ministry. The Shiites fell somewhere in the middle.

The draft law has a compromise: regions can enter into contracts, but a powerful new central body, the Federal Oil and Gas Council, would have the power to prevent the contracts from going forward if they do not meet certain prescribed standards, Mr. Salih said. A panel of oil experts from inside and outside Iraq would advise the federal council on the contracts.

The draft law also re-establishes the state-run Iraq National Oil Company, which was founded in 1964 to oversee oil production but was shut down by Mr. Hussein in 1987. The company would operate separately from the Oil Ministry and use a business model. In addition, any region that can produce at least 150,000 barrels of oil a day can create its own operating company.

Energy analysts said the new law is unlikely to lead to a stampede by foreign companies anytime soon because it leaves too many unresolved issues, including the lack of a mechanism to settle potential disputes between the federal authority and local governments.

“I think the devil is going to be in the details,” said Fadel Gheit, an analyst with Oppenheimer & Company in New York. “Oil companies need governments that will honor the contracts they sign and they need a safe environment to operate,” he added.

While Mr. Gheit said he expected American and British oil companies to receive preferential treatment in the awarding of contracts, other analysts said Iraqis would be suspicious of awarding preferential deals to American companies.

“Iraqis are extremely protective of their resources,” said Rochdi A. Younsi, an analyst at Eurasia Group, a political risk consulting firm. “Given the level of anti-American sentiment, any major American oil company perceived to take advantage of their relations in government would be seen as being part of the so-called conspiracy to take over Iraq’s natural resources.”

Jad Mouawad contributed reporting from New York.

POWER: GORE MANSION USES 20X AVERAGE HOUSEHOLD; CONSUMPTION INCREASE AFTER 'TRUTH'
Mon Feb 26 2007 17:16:14 ET

The Tennessee Center for Policy Research, an independent, nonprofit and nonpartisan research organization committed to achieving a freer, more prosperous Tennessee through free market policy solutions, issued a press release late Monday:

Last night, Al Gore’s global-warming documentary, An Inconvenient Truth, collected an Oscar for best documentary feature, but the Tennessee Center for Policy Research has found that Gore deserves a gold statue for hypocrisy.

Gore’s mansion, [20-room, eight-bathroom] located in the posh Belle Meade area of Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service (NES).

In his documentary, the former Vice President calls on Americans to conserve energy by reducing electricity consumption at home.

The average household in America consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh—more than 20 times the national average.

Last August alone, Gore burned through 22,619 kWh—guzzling more than twice the electricity in one month than an average American family uses in an entire year. As a result of his energy consumption, Gore’s average monthly electric bill topped $1,359.

Since the release of An Inconvenient Truth, Gore’s energy consumption has increased from an average of 16,200 kWh per month in 2005, to 18,400 kWh per month in 2006.

Gore’s extravagant energy use does not stop at his electric bill. Natural gas bills for Gore’s mansion and guest house averaged $1,080 per month last year.

“As the spokesman of choice for the global warming movement, Al Gore has to be willing to walk to walk, not just talk the talk, when it comes to home energy use,” said Tennessee Center for Policy Research President Drew Johnson.

In total, Gore paid nearly $30,000 in combined electricity and natural gas bills for his Nashville estate in 2006.

For Further Information, Contact:
Nicole Williams, (615) 383-6431
editor@tennesseepolicy.org

February 26, 2007
Bombing at Iraqi Ministry Injures Vice President

By DAMIEN CAVE
BAGHDAD, Feb. 26 — An explosion inside the headquarters of the Iraqi Ministry of Public Works killed at least five people today and injured Iraq’s vice president and the minister in what Iraqi official described as a possible assassination attempt.

Though it was unclear where the bomb was hidden or who was the target of an assassination attempt, the attack was the most serious breach of an Iraqi government building since November, when dozens of employees at the Ministry of Higher Education were kidnapped by gunmen dressed in police commando uniforms.

Vice President Adel Abdul-Mahdi, one of two Iraqi vice presidents, was approaching a conference room lectern to address ministry employees at the time of the blast, which tore through walls and hurled him to the ground, witnesses said. His guards threw themselves on top of him, and he was immediately taken to an American-run hospital inside the Green Zone where witnesses said he was received in a wheelchair, covered in dust but smiling.

Statements from several offices of the Shiite-led Iraqi government later said Mr. Abdul-Mahdi was released from the hospital and returned to work.

The minister of public works, Reyad Ghareeb, was also seriously wounded, news agencies reported. It was not clear if his injuries were life-threatening.

The Ministry of Public Works is located in the Sunni neighborhood of Mansour. Like nearly all government buildings here, it is surrounded by concrete blast walls 10 feet tall and by dozens of guards. Visitors to the building pass through metal detectors and are then searched by hand.

Witnesses and Iraqi officials said it was unclear whether a bomb had been carried in by an employee or had been slipped past security.

Assassination attempts on Iraqi officials are not uncommon, and members of all sects have been targets. The vice president and the public works minister are both Shiites, and the ministry is run by one of Iraq’s leading Shiite parties, the Supreme Council for the Islamic Revolution in Iraq. Last fall, a car bomb exploded in the Green Zone near the convoy of the Sunni speaker of the Iraqi Parliament, Mahmoud al-Mashadani. Nasreen Barwari, a Kurd and the former public works minister, said three attempts were made on her life during her tenure from 2003 to 2006.

She said satellite offices of the ministry were regularly made targets as well.

“I believe all governmental offices are a target all the time,” she said in an e-mail interview. “The main objective is to undermine the government as a whole and discredit its security measures or plans.”

Witnesses said the vice president, the minister and several senior ministry officials had gathered in the conference room on the third floor to give employees awards when the blast tore through walls, shredded rows of chairs and collapsed part of the roof onto the victims.

“While Dr. Abdul-Mahdi was trying to deliver his speech, the explosion took place,” said a ministry employee, also injured in the attack, who had been sitting next to the vice president. If it was a suicide bomber, the witness said, “there would have been more people killed.”

Interior Ministry officials said three women were among the five people killed. Four held the rank of directors general in the Public Works Ministry, being the middle managers who run the organization day to day.

The blast came on a yet another day of violence in Baghdad. A roadside bomb in southern Baghdad killed two policemen. A mortar exploded in central Baghdad, where security forces have set up blast walls around open-air markets, killing two people and wounding four. Gunmen attacked a fire station with grenades and machine guns in Mansour, in west Baghdad, killing three firemen and wounding three others.

The authorities found 25 bodies throughout the city.

Also today, the political bloc loyal to the militant Shiite cleric Moktada al-Sadr clarified his stance on the new security plan, declaring that Mr. Sadr still supported the plan despite a statement attributed to him on Sunday saying that the effort to pacify Baghdad was doomed to failure because it relied on American troops.

Saleh al-Ugaili, a member of Parliament and a spokesman for Mr. Sadr’s political movement, said the statement was meant to emphasize a need for more Iraqi control.

“What was mentioned in Moktada’s statement was an assessment of the security plan and a call to correct its approach,” he said. “Everybody knows that the American intervention in the duties of army and Iraqi police confuses their work and creates opportunities for breaches.”

The United States military said in a statement today that elements of Mr. Sadr’s Mahdi Army militia “seem to be practicing a policy of non-interference,” with many senior leaders leaving the country and others adopting a “wait-and-see” attitude.

The military also announced the death of a marine killed Feb. 26 during combat in the Sunni Anbar province.

The office of President Jalal Talabani said in a statement today that he was recovering from exhaustion at a hospital in Jordan, and it denied reports that he had heart surgery.

Ali Adeeb and Qais Mizher contributed reporting.

Copyright 2007 The New York Times Company

Feb. 26, 2007, 3:58PM
Iranian leaders criticize president

By ALI AKBAR DAREINI Associated Press Writer
© 2007 The Associated Press

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TEHRAN, Iran — President Mahmoud Ahmadinejad faced a new round of sharp criticism at home Monday after he said Iran's nuclear program is an unstoppable train without brakes. Reformers and conservatives said such tough talk only inflames the West as it considers further sanctions.

The criticism came even as new signs have arisen that Iran's supreme leader Ayatollah Ali Khamenei is growing discontented with Ahmadinejad, whom he is believed to have supported in 2005 presidential elections.

Last week, Khamenei voiced rare criticism of the domestic performance of Ahmadinejad's government, and the president was notably absent when a group of Cabinet members and vice presidents met with Khamenei, who has the final word in all political affairs in Iran, including the nuclear issue.

The increasing criticism reflects public worries about the course of the country's confrontation with the United States and the West. Washington has taken a more aggressive stance toward Iran, building up the U.S. military presence in the Gulf and accusing Tehran of backing militants in Iraq. That has heightened fears among Iranians of possible U.S. military action.

On Monday, the U.S., the four other permanent members of the Security Council and Germany began work on a new U.N. resolution that could impose further sanctions on Iran over its nuclear program, after Tehran rejected U.N. demands it stop enriching uranium.

However, sharp differences appear to remain between the tough U.S. position and what Russia and China, veto-holding council members with close ties to Iran, are willing to accept. U.S. State Department spokesman Sean McCormack said in Washington the diplomats would hold a telephone conference Thursday to continue talks on the specific elements of the document.

On the eve of the gathering, Ahmadinejad struck a defiant tone. He told a group of clerics that Iran's nuclear ambitions were unstoppable. "The train of the Iranian nation is without brakes and a rear gear ... We dismantled the reverse gear and brakes of the train and threw them away some time ago," he said.

Those comments brought a hail of condemnations in Iran on Monday, not only from reformists who have long opposed Ahmadinejad, but also from conservatives who once backed him but now see his fiery rhetoric as needlessly provoking the West into confrontation.

"Why are you speaking a language that causes a person to be ashamed?" wrote the reformist daily Etemad-e-Melli, or National Confidence.

"A train's brakes are needed to reach its destination safely," it said. "You represent the voters of the great Iranian nation. Speak equal to the name and dignity of this nation."

The conservative daily Resalat chided Ahmadinejad, saying "neither weakness nor unnecessarily offensive language is acceptable in foreign policy."

"Our foreign policy must reflect the ancient Iranian civilization and rich Islamic culture of the Iranian nation. Therefore, delicacy ... rich diplomatic language and non-primitive policies must be part of a calculated combination to work," it said.

Ahmadinejad's critics have grown more vocal ever since his allies suffered a humiliating defeat in local elections in December. That vote was swept by reformists and anti-Ahmadinejad conservatives who said the president has spent too much time castigating the West and neglected dealing with Iran's faltering economy.

The president appeared to have toned down his rhetoric in the past few weeks, insisting Iran would not give up its nuclear program but using a more moderate tone and expressing a desire to negotiate with the West.

Iranian political analyst Iraj Jamshidi said it appeared "the top leadership has cautioned him about his remarks" but Ahmadinejad's tough rhetoric "is part of his personality."

Iran denies U.S. and Western claims that it seeks to develop nuclear weapons, and the country's political factions have long been united in their stance that Iran has a right to a peaceful nuclear program. So far the criticism of Ahmadinejad has focused on his confrontational tone — though some reformers have gone further, saying Iran should be more willing to compromise in the standoff over the enrichment program.

The Islamic Iran Participation front, Iran's largest reformist party, has said Iran must return to suspension of enrichment activities to pave the way for a compromise.

Iran's nuclear policy is ultimately in the hands of Khamenei, who has always been a proponent of pushing ahead with the program. There have been no signs that he has changed that stance, but there are indications he is souring on the performance of his protege, Ahmadinejad.

On Feb. 19, Khamenei hosted a series of top officials for meetings, including several Cabinet ministers and vice presidents — but not Ahmadinejad. The same day, Khamenei — who has rarely criticized a president since he became supreme leader in 1989 — blamed the government for failing to use constitutional articles allowing privatization of state industries "to create an economic breakthrough."

At the same time, Ahmadinejad's top political rival, Ayatollah Akbar Hashemi Rafsansjani, has emerged as a high-level advocate of a more conciliatory stance toward the West, saying the nuclear dispute needs to be resolved through "dialogue and wisdom."

Rafsanjani, a top figure in Iran's clerical leadership, lost to Ahmadinejad in the 2005 election, but Rafsanjani's allies were among those swept to victory in the December local elections.

Enriched to a low level, uranium is used to produce nuclear fuel but further enrichment makes it suitable for use in building an atomic bomb. In December, the U.N. Security Council imposed limited sanctions on Iran over its refusal to suspend enrichment and gave it a 60-day grace period to halt enrichment. That deadline expired last Wednesday.

___

Associated Press Writer Thomas Wagner contributed to this report from London.

Feb. 26, 2007, 1:02PM
Some in Iran denounce Ahmadinejad stance

By ALI AKBAR DAREINI Associated Press Writer
© 2007 The Associated Press

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TEHRAN, Iran — President Mahmoud Ahmadinejad faced a new round of sharp criticism at home Monday after he said Iran's nuclear program is an unstoppable train without brakes. Reformers and conservatives said such tough talk only inflames the West as it considers further sanctions. The criticism came even as new signs have arisen that Iran's supreme leader Ayatollah Ali Khamenei is growing discontented with Ahmadinejad, whom he is believed to have supported in 2005 presidential elections.

Last week, Khamenei voiced rare criticism of the domestic performance of Ahmadinejad's government, and the president was notably absent when a group of Cabinet members and vice presidents met with Khamenei, who has the final word in all political affairs in Iran, including the nuclear issue.

The increasing criticism reflects public worries about the course of the country's confrontation with the United States and the West. Washington has taken a more aggressive stance toward Iran, building up the U.S. military presence in the Gulf and accusing Tehran of backing militants in Iraq. That has hiked fears among Iranians of possible U.S. military action.

On Monday, the U.S., the four other permanent members of the Security Council and Germany met in London to consider further sanctions against Iran over its nuclear program, after Tehran rejected U.N. demands it halt its uranium enrichment program.

On the eve of the gathering, Ahmadinejad struck a defiant tone. He told a group of clerics that Iran's nuclear ambitions were unstoppable. "The train of the Iranian nation is without brakes and a rear gear ... We dismantled the reverse gear and brakes of the train and threw them away some time ago," he said.

Those comments brought a hail of condemnations in Iran on Monday, not only from reformists who have long opposed Ahmadinejad, but also from conservatives who once backed him but now see his fiery rhetoric as needlessly provoking the West into confrontation.

"Why are you speaking a language that causes a person to be ashamed?" wrote the reformist daily Etemad-e-Melli, or National Confidence.

"A train's brakes are needed to reach its destination safely," it said. "You represent the voters of the great Iranian nation. Speak equal to the name and dignity of this nation."

The conservative daily Resalat chided Ahmadinejad, saying "neither weakness nor unnecessarily offensive language is acceptable in foreign policy."

"Our foreign policy must reflect the ancient Iranian civilization and rich Islamic culture of the Iranian nation. Therefore, delicacy ... rich diplomatic language and non-primitive policies must be part of a calculated combination to work," it said.

Ahmadinejad's critics have grown more vocal ever since his allies suffered a humiliating defeat in local elections in December. That vote was swept by reformists and anti-Ahmadinejad conservatives who said the president has spent too much time castigating the West and neglected dealing with Iran's faltering economy.

The president appeared to have toned down his rhetoric in the past few weeks, insisting Iran would not give up its nuclear program but using a more moderate tone and expressing a desire to negotiate with the West.

Iranian political analyst Iraj Jamshidi said it appeared "the top leadership has cautioned him about his remarks" but Ahmadinejad's tough rhetoric "is part of his personality."

Iran denies U.S. and Western claims that it seeks to develop nuclear weapons, and the country's political factions have long been united in their stance that Iran has a right to a peaceful nuclear program. So far the criticism of Ahmadinejad has focused on his confrontational tone — though some reformers have gone further, saying Iran should be more willing to compromise in the standoff over the enrichment program.

The Islamic Iran Participation front, Iran's largest reformist party, has said Iran must return to suspension of enrichment activities to pave the way for a compromise.

Iran's nuclear policy is ultimately in the hands of Khamenei, who has always been a proponent of pushing ahead with the program. There have been no signs that he has changed that stance, but there are indications he is souring on the performance of his protege, Ahmadinejad.

On Feb. 19, Khamenei hosted a series of top officials for meetings, including several Cabinet ministers and vice presidents — but not Ahmadinejad. The same day, Khamenei — who has rarely criticized a president since he became supreme leader in 1989 — blamed the government for failing to use constitutional articles allowing privatization of state industries "to create an economic breakthrough."

At the same time, Ahmadinejad's top political rival, Ayatollah Akbar Hashemi Rafsansjani, has emerged as a high-level advocate of a more conciliatory stance toward the West, saying the nuclear dispute needs to be resolved through "dialogue and wisdom."

Rafsanjani, a top figure in Iran's clerical leadership, lost to Ahmadinejad in the 2005 election, but Rafsanjani's allies were among those swept to victory in the December local elections.

The big powers at the U.N. are considering new steps against Iran after it ignored a U.N. Security Council deadline last week to suspend uranium enrichment. Enriched to a low level, uranium is used to produce nuclear fuel but further enrichment makes it suitable for use in building an atomic bomb.