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U.S. ENERGY POLICY

A voice of reason countering Big Oil’s clout

by Stephen Hesse

The United States government may be hemorrhaging money in Iraq, but the financial condition of America’s oil companies and their top management couldn’t be rosier.

Thank goodness at least one politician in Washington is countering with truth the greed and myopia that have characterized the Bush presidency’s energy policy.

Last week, for the first time since Hurricane Katrina knocked out 10 percent of U.S. refinery production in August 2005, crude oil futures topped $70 a barrel due to violence in Nigeria and rising international tensions surrounding Iran’s nuclear ambitions — Iran is the world’s fourth-largest oil producer, Nigeria is the 12th.

Also last week, we learned that Lee R. Raymond, the former chief executive and chairman of Exxon Mobil Corp., recently received a compensation and retirement package worth nearly $170 million.

Pretty sweet numbers for an industry that has a long history of human rights abuses and environmental destruction worldwide — as well as a starring role in stoking climate change.

But seen in another light, Raymond deserves every penny: For more than 40 years, 13 of those at the helm, he has been helping to guide the most profitable corporation in history, as well as overseeing the energy policy of the United States. Of course he hasn’t been doing that directly, but for years his company has funded a stable of lobbyists and special-interest groups whose sole purpose has been to wine, dine and donate money to the politicians that make America’s energy and national security decisions.

The real tragedy in Washington is that money talks loudest, so corporate lobbyists can drown out the voices of reason calling for national and energy security. In fact, if you have enough money you can get legislators to do what you please, no matter how ignorant and self-serving.

Take Exxon Mobil for example. Despite the overwhelming consensus that global climate change has substantial man-made causes (even Pentagon research published two years ago concluded that climate change risks “should be elevated beyond scientific debate to a U.S. national security concern”), last June Raymond told the Wall Street Journal, “Our view is it’s yet to be shown how much of this [climate change] is really related to the activities of man.”

And what could be better for his business? By ignoring what is certain, and clinging to what is not, Raymond was doing his best to protect the value of Exxon Mobil shares — a stack of which he recently sold for over $20 million, according to media reports.

So even as Raymond leaves town, Big Oil still owns Washington.

On the offensive

But there are reasons for optimism, and one of those is a 44-year-old freshman Democrat senator from Illinois, Barack Obama, who took office in January 2005.

Obama is not new to politics, having spent seven years in the Illinois State Senate, but he is new to Washington — and he is squaring off against the Bush administration’s energy policy.

On Feb. 28, soon after Bush gave a speech that marked the beginning of his second four-year term in office, Obama went on the offensive, criticizing the Bush administration for taking from the Saudi royal family with one hand, and then, apologetically, giving back with the other.

“In this year’s State of the Union address, President Bush told us that it was time to get serious about America’s addiction to foreign oil. The next day, we found out that his idea didn’t sit too well with the Saudi royal family. A few hours later, Energy Secretary [Samuel] Bodman backtracked and assured the world that even though the president said he planned to reduce the amount of oil we import from the Middle East, he actually didn’t mean that literally,” said Obama.

“If there’s a single example out there that encapsulates the ability of unstable, undemocratic governments to wield undue influence over America’s national security just because of our dependence on oil, this is it,” he continued.

Earlier this month, speaking at the annual luncheon of The Associated Press, Obama again lambasted Bush. “When it comes to finding a way to end our dependence on fossil fuels, the greatest vacuum in leadership, the biggest failure in imagination and the most stubborn refusal to admit the need for change is coming from the very people who are running the country,” he said.

Unlike too many in Washington, Obama recognizes that true national security demands energy independence and environmental conservation, both of which require Americans to wean themselves off oil.

Backing up his calls for change, Obama has released a list of what he calls Energy Independence Proposals. None of these are radical, but they are practical and politically palatable, which is why they just might get traction among disenchanted U.S. voters — as well as among worried Washington politicians fleeing the Bush camp.

Obama’s proposals include having the U.S. government pay a portion of the costs American automakers are now paying for retiree health care costs; in return the automakers would spend the money they save on manufacturing fuel-efficient cars, such as hybrids. He also calls for the United States to strengthen fuel-efficiency requirements for all vehicles, and begin applying these standards to light trucks, such as Hummers, that are currently exempt from national fuel-economy standards.

To reduce reliance on oil and encourage the use of cleaner fuels, Obama also supports renewable fuels such as ethanol (ethyl alcohol), 200-proof grain alcohol made by fermenting and distilling grains such as corn or wheat. According to his Web site, he has already sponsored legislation that would give tax credits of up to $30,000 to gas stations that install E-85 pumps (E-85 refers to fuel that is blended from 85 percent ethanol and 15 percent gasoline); and he has co-sponsored legislation to create a federal Renewable Fuels Standard and expand research into biofuels.

Huge bite out of profits

Obama hopes that by 2010 all cars sold in the United States will be flexible-fuel vehicles, meaning they can run on either gasoline or E-85 fuel. Unfortunately, his Web site notes, brand-name gasoline stations may need to be pressured to install E-85 pumps because “some industry leaders are actively dissuading E-85 sales” — most likely because if vehicles run on 85 percent ethanol, E-85 will take a huge bite out of the oil industry’s historically high profits.

Inevitably, as oil costs rise, coal is becoming an increasingly attractive, and relatively cheap, source of fossil-fuel energy. Unfortunately, different coals are loaded to different degrees with sulfur, carbon dioxide and particulates — which is why Obama is also pushing for clean-coal technologies and carbon sequestration, which removes carbon from fossil fuels or their combusted emissions and puts it in permanent “storage” deep underground or under the oceans.

And finally, he is also promoting a federal Renewable Portfolio Standard that would require, by the year 2020, that 20 percent of U.S. electricity consumption be derived from clean, renewable sources of energy.

Now, if he just cranks that up another 50 percent, I’ll pack up, move to Illinois, and volunteer on his next campaign.