Page 2 of 2 Big Oil, the big survivor
By Antonia Juhasz
Senate. Democrats pledged in their election campaigns to take action against
the oil industry, climate change, and the war in Iraq - all three of which are
intimately and rightly connected in the public's mind. The Democrats failed to
deliver. Far too often, Big Oil's money appeared to be the reason why.
In one particularly glaring example, the Center for American Progress
investigated the relationship between votes and campaign contributions in
connection with HR 2776, the Renewable Energy and Energy Conservation Tax Act
of 2007. The bill would have eliminated $16 billion in oil and gas industry tax
breaks to fund clean energy alternatives. Between 1989 and 2006, members of
Congress who voted against the bill received on
average four times more money in campaign contributions from the oil and gas
industry (approximately $100,000) than those who voted for the bill
(approximately $26,000). The bill ultimately died.
Similarly, Oil Change International compiled voting records for the five most
important bills on the Iraq War: the initial 2003 vote authorizing the use of
force in Iraq and the subsequent supplemental war funding bills in 2003, 2004,
2005, and 2006. From 1989 to 2006, members of Congress who voted for all five
bills received on average eight times more money from the oil and gas industry
(approximately $116,000) than those who voted against the war (approximately
$14,000). And the war rages on.
Big Oil does not only wield its financial purse at election time, it impacts
daily policy-making through its unprecedented spending on lobbyists. In fact,
the millions of dollars it spends on elections is small potatoes compared with
the tens of millions it spends lobbying the federal government.
From 1998 to 2006, ExxonMobil alone spent more than $80 million lobbying the
federal government, over 14 times more money than it spent on political
campaigns. Combined, ExxonMobil, Chevron, Shell, BP, Marathon, and
ConocoPhillips spent $240 million lobbying the federal government from 1998 to
2006 - more than the entire oil and gas industry spent on federal election
campaigns from 1990 to 2006.
There is simply no comparison between the financial reach of the oil industry
and that of organizations working on behalf of consumers, the environment,
public health, communities living near oil production or gasoline refining
facilities, and groups working in support of alternative energy, antitrust
enforcement, or the protection of human rights. Through lawyers, lobbyists,
elected officials, government regulators, conservative think tanks, industry
front groups, and full-force media saturation, the oil industry uses its wealth
to change the public debate and, more often than not, achieve its desired
policy outcomes.
Running out
Yet for all its enduring power, Big Oil finds itself in a precarious position
today. While it is at its financial and political pinnacle, it faces the
greatest threat to its existence in its 150-plus-year history: oil, the
resource on which it depends, is growing far more difficult to come by.
Today the Earth is just about tapped out of conventional oil. There are no new
vast, untouched reserves sitting close to the earth's surface just waiting to
be discovered. In fact, even with phenomenal advances in technology, no one has
made such a discovery in more than 45 years. This, of course, is not for lack
of trying. From Canada to China, Mexico to Brazil, Nigeria to Iraq, Malaysia to
Greenland, California to Florida, through ice, sand, silt, and rock, over the
course of the past 150 years and at an incalculable cost, we have scoured the
globe in search of oil.
Oil is a nonrenewable natural resource: when a reservoir of oil is depleted, no
new oil emerges to take its place. Since about 1960, the rate at which the
world has consumed oil has outpaced the rate at which we have discovered new
fields. Today we find only about one new barrel of oil for roughly every four
that we consume. Meanwhile, it is estimated that the world will consume 120
million barrels of oil a day by 2025, over 50% more than we consumed in 2001.
We are therefore forced to confront a bitter reality: the world is fast
approaching the point at which conventional sources of oil will decline until
they are forever gone.
More than 50% of the world's remaining conventional oil is found in just five
countries: Saudi Arabia, Iran, Iraq, Kuwait, and the United Arab Emirates. In
2003 the Bush administration, composed of former and future oil company
executives, led the United States into war against Iraq on the pretense that
Saddam Hussein had weapons of mass destruction. The same administration is now
threatening war against Iran while establishing permanent US military
facilities across the region, including in Kuwait and the UAE. The
administration supplies arms to Saudi Arabia while negotiating for greater
access to that nation's oil for US oil companies.
The rest of the world's conventional oil is found in comparatively small
amounts in 14 other countries: Venezuela, Russia, Libya, Nigeria, Kazakhstan,
the United States, China, Qatar, Mexico, Algeria, Brazil, Angola, Norway, and
Azerbaijan. If you map the massive increase in construction of US military
bases and installations and military deployments around the world under the
Bush administration, you will see that they directly follow oil locations and
oil transit routes. New US military installations in Central and South America,
West Africa, and elsewhere raise the threat of new military action in those
regions. The costs to people who live in those countries and along those routes
are mounting, from human rights abuses, environmental destruction, military
occupation, and war.
Oil production in most of the world has reached or is nearing its peak.
Production in most Middle Eastern countries, on the other hand, is not expected
to peak until 2025. This means that an even greater percentage of the world's
remaining oil will be consolidated in just a few Middle Eastern nations.
The realization that oil is being concentrated in the Middle East has led many
to argue that the United States should become more "energy independent". In
response to this sort of view, Sarah Emerson of Energy Security Analysis Inc
explained in 2002, "The trouble with diversifying outside the Middle East ...
is that it is not where the oil is. One of the best things for our supply
security would be to liberate Iraq."
Climate change
Outside of the Middle East, the oil that is left is becoming more
technologically difficult, expensive, and environmentally destructive to
acquire. Conventional oil is found offshore below the world's ocean waters,
making its production risky, environmentally harmful, and destructive to
coastal communities. Among the largest unconventional sources of oil are the
tar sands of Canada and the shale regions of the midwestern United States.
In addition to the problems just listed, the process of removing the tar and
shale from the earth, extracting the oil, converting it into liquid, and
refining it into gasoline is far more energy-intensive and ozone-depleting than
traditional methods of oil production and thus contributes more to climate
change.
Climate change and global warming are increasingly critical issues. Including
2007, seven of the eight warmest years since records began in 1880 have
occurred since 2001, and the 10 warmest years have all occurred since 1997.
Burning fossil fuels, primarily oil, natural gas, and coal, increases
atmospheric concentrations of carbon dioxide (CO2), the principal greenhouse
gas. The more greenhouse gas there is in the earth's atmosphere, the more of
the sun's heat is trapped near the earth's surface; the more heat that is
trapped, the higher the planet's temperature; the higher the earth's
temperature, the more ice melts, oceans rise, and extreme weather results. All
of which would be better described as "climate chaos" rather than mere "climate
change" or "global warming." Just to stabilize current greenhouse gas
concentrations in the atmosphere, it is estimated that the world must reduce
emissions of these gases by 50 to 80% by 2050 or even sooner.
The United States is by far the largest per capita contributor to global
warming - releasing 30% of all energy-related CO2 emissions in 2004 (the most
recent date for which data is available) - primarily from our cars and trucks.
The United States is also the largest consumer of oil. With just 5% of the
world's population, the United States uses almost 25% of the world's oil every
year. In fact, Americans consume as much oil every year as the next five
countries - China, Japan, Russia, Germany, and India - combined. On average,
each American uses nearly three gallons of oil per day. Products made from
petroleum, such as plastics, linoleum, nylon, and polyester, fill our lives,
but it is the car that dominates our oil consumption.
One out of every seven barrels of oil in the world is consumed on America's
highways alone. In fact, the population growth of cars in the United States is
greater than that of people: a new car rolls onto the street every three
seconds, whereas a baby is born only every eight seconds. Americans are
increasingly aware that this consumption is unsustainable. Many of us would
like to see fewer cars on the road, cleaner-burning renewable alternative
fuels, more and better public transportation, more pedestrian-friendly
downtowns, better rail systems, and electric cars. This is where we collide
head-on with the economic clout of the oil industry.
Big Oil would like us to believe that it is part of the solution, that it has
seen the writing on the wall and knows that the future is clean energy. The
companies' advertising campaigns would have us believe that they are in fact
using their vast resources to embrace a clean, green, sustainable, and
renewable energy future. Do not believe the hype. None of the companies invests
more than 4% of its entire annual expenditures on clean, renewable, alternative
forms of energy. Big Oil is deeply committed to remaining Big Oil and is
putting all its considerable resources behind this effort.
And Big Oil thrives on secrecy, a lack of transparency, and control over
information. We can only address its power by pulling back its veil.
Antonia Juhasz is a Foreign Policy In Focus senior analyst and the author
of The Tyranny of Oil: the World's Most Powerful Industry, and What We
Must Do To Stop It (William Morrow 2008), of which the above article is an
edited excerpt.
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