Iraqi oil provision unlikely in final comprehensive energy bill

A Senate provision championed by Sen. Frank Murkowski (R-Alas.) that bans Iraqi oil imported into the US via the United Nations oil-for-aid program is unlikely to be part of any final energy bill.

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, July 12 -- A Senate provision championed by Sen. Frank Murkowski (R-Alas.) that bans Iraqi oil imported into the US via the United Nations oil-for-aid program is unlikely to be part of any final energy bill, congressional and administrative sources predicted July 12.

The White House and key congressional leaders in the Republican-led House and Democratic-controlled Senate oppose the provision. The House's energy bill does not include an Iraq oil ban.

Oil companies never publicly lobbied against the amendment but were clearly troubled by the Senate's action, which approved the plan by an 88-10 margin in April.

They privately told the White House the measure could exacerbate gasoline price spikes, because several refineries are optimized to run on Iraqi crude.

Amendment details
Under the UN oil-for-aid program, the US imports about 1 million b/d of Iraqi crude.

Murkowski said the US should ban oil from Iraq because the UN program fails to prevent Iraqi President Saddam Hussein from using petrodollars to fuel his war machine.

International trade sanctions already prevent Iraq from selling oil directly to US companies. And under current law, President George W. Bush has the authority to ban US companies from participating in the UN program.

Murkowski's amendment emphasizes the president has the authority to waive the ban if an embargo would be "inconsistent with the national security and foreign policy interests of the US."

Under Murkowski's amendment, the ban would be lifted if Baghdad were to allow UN inspectors back in Iraq to certify the government is complying with UN regulations and that there is no stockpiling of nuclear or biological weapons

Lawmaker support fleeting
At least one key lawmaker, Senate Energy Committee Chairman Jeff Bingaman (D-NM), opposed the provision on the Senate floor before the vote was taken.

In his remarks Bingaman said a vote was premature because the White House had not indicated whether a ban would help or exacerbate US efforts to broker a Middle East peace. The senator also suggested the ban would have little to no impact on Iraq, because the country could simply sell the oil to European and Asian buyers instead of the US (OGJ Online, Apr. 19, 2002).

Soon after the vote, state department officials publicly indicated their agency had serious reservations about the amendment. Then on June 28, Sec. of Energy Spencer Abraham released a letter saying the administration strongly opposes the provision.

"Were the United States to cease participation in this humanitarian program, it would work against our efforts to bolster Security Council consensus on Iraq. Such a ban would likely afford Iraq the opportunity to seek more illicit oil sales and revenues outside of UN control," Abraham wrote.

Abraham's comments were part of a larger document outlining the White House's views on pending energy legislation before Congress.

Abraham said if lawmakers want to reduce foreign imports, the most effective way is to enact the House's provision allowing the leasing of a portion of the Arctic National Wildlife Refuge.

The battle over ANWR and other controversial provisions, including ironing out the wide funding gaps between the House and Senate energy tax provisions, is expected to heat up in September.


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