Oil and the Bush Administration

by Mark J. Palmer

Earth Island Journal, Autumn 2002

Last year, Vice President Dick Cheney hosted a series of meetings with a group of energy industry representatives and lobbyists. From these meetings, the Bush administration unveiled a controversial National Energy Plan, which consisted chiefly of $33 billion in public subsidies and tax cuts for the oil, coal, and nuclear power industries, as well as provisions to open up the Arctic National Wildlife Refuge for industrial oil drilling.

For months, Vice President Cheney refused to release the names of participants, citing presidential privilege to conduct consultations in private. However, Congress's non-partisan investigative and oversight arm, the General Accounting Office (GAO), filed an unprecedented lawsuit to obtain the names of the industrialists who met with the Bush Administration to shape his National Energy Plan. Environmentalists filed suit as well. The names of the industry experts are finally, if slowly, being released, revealing that the administration had given environmental groups only three days to provide input in writing, while meeting in person with the energy lobby time after time.

One participant was grudgingly revealed by Cheney early on: Former Enron CEO and George W Bush's most generous campaign contributor, Kenneth Lay Cheney admitted that he and/or his staff met at least six times with Lay on energy policy issues. Congressmember Henry Waxman (D-CA) subsequently identified 17 different provisions of the Bush National Energy Plan bill that would have benefited Enron. At least one Executive Order on energy policy was virtually identical to draft proposals submitted by the American Petroleum Institute.

Despite the strong backing of the Bush administration, the energy policy only survives on legislative life-support. Though the House passed the bill, the Senate stripped provisions from its version, including plans to drill in the Arctic National Wildlife Refuge (ANWR). Now, a contentious Conference Committee must try to make sense out of the hash of two quite different House and Senate versions of the bill. Environmentalists support neither version.

Compassionate McCarthyism

The energy debate in Congress started out in 2001 as one of supply and cost. But after the tragic events of September 11, a different note crept into the arguments of Bush supporters.

"Every day the United States imports 700,000 barrels of oil from [Iraq's] Saddam Hussein... It's time to start producing that energy in the United States," said Bush's Interior Secretary, Gale Norton.

Senator Frank Murkowski (R-AK), long a supporter of opening up ANWR for drilling, stated: "This September, we were brutally and viciously attacked. Yet government figures show we imported 1.2 million barrels of oil from Iraq every day in September, the most since 1990. I hope the tragic irony of this is not lost on [Senate Majority Leader] Daschle. However, his announcement yesterday that he doesn't want to move energy legislation this year leads me to believe otherwise."

But are people who oppose drilling in wilderness areas really at fault for the weaknesses of the US oil-dependent economy and US policy in the Middle East?

US Oil Drilling vs. Imports

The US uses (many would say squanders) 25 percent of global oil production, but has only three percent of the world's known oil reserves.

Ironically, due to the high price of extracting oil from Alaska and other domestic sources, many oil companies are scaling back domestic production, even as they push Congress to open up the Arctic Refuge. BP announced in January that it was abandoning its Liberty offshore oil prospect in Alaska, cutting 120 jobs and saving an estimated $600 million in costs required to develop that offshore area. BP told the Financial Times that "the Liberty project was too expensive to develop."

A minimum eight to ten years of exploration and development will be required before one drop of oil can reach the US market from the Arctic Refuge.

According to Tim Burnhill in New Scientist, there have been seven different estimates of the amount of oil in ANWR over the past 15 years, the best being that by the US Geological Survey (USGS) in 1998, of 4.3 to 11.8 billion recoverable barrels of oil. But even the "best" estimate is little more than a guess, Burnhill adds, and the higher estimated numbers for recoverable oil depend on oil prices skyrocketing so that expensive Alaskan crude would be competitive. Based on the USGS report, the environmental Alaska Coalition calculates the realistic mean amount of economically recoverable oil at 3.2 billion barrels in the Arctic Refuge, less than a six-month supply at current consumption rates.

Robert Kuttner, co-editor of The American Prospect, notes in Business Week that the Refuge at best would yield only two percent of annual US oil consumption during peak operations in 2027.

Could the Arctic Refuge be opened only to exploratory drilling just to determine how much oil the refuge might carry? Under current law, the answer is no. The US government has no capacity for exploratory oil drilling. Oil exploration and development are tied inextricably to leases for private oil companies, which regard exploratory data as proprietary information.

Crude from the Middle East

Does oil from the Middle East "threaten" US security? Possibly, although that threat is definitely exaggerated.

According to the US Department of Energy (DOE) and other sources, the US imported about 13 percent of its domestic consumption of oil from the Middle East in 2000, most of it (about eight percent of total US consumption) from oil-rich Saudi Arabia. Only 3.18 percent of total US consumption was imported from Iraq, under an international agreement limiting Iraq's use of the oil profits to humanitarian food supplies. The US is a voluntary participant in this program sponsored by the United Nations. The very people in the Bush administration and Congress who point to the oil fields of Iraq with such consternation could have shut those imports down any time.

The US actually imports less oil today from the Middle East-about 2.4 million barrels a day-than it did in 1977, when we brought in 3.6 million barrels a day Today, the US imports oil from 60 different countries around the world, according to the DOE.

Further reductions in oil use in the US, through improved conservation standards (especially with improved gasoline mileage requirements for cars, SUVs, and light trucks), would reduce the need for foreign sources of oil much more quickly and reliably than drilling in the Arctic Refuge. Such conservation efforts can also buy time for development of cost-effective renewable energy sources. Just to cite one example: The Environmental Protection Agency calculates that increasing fuel efficiency standards for new vehicles by just three miles per gallon would save more than one million barrels of oil per day-five times the amount of oil the Arctic Refuge is likely to provide.

ANWR and the Middle East

Senator Murkowski, after the Arctic drilling amendment was defeated, ominously claimed that the vote played into the hands of Saddam Hussein and other Middle East oil producers. But the very companies that propose to drill the Arctic Refuge are also heavily invested in Middle East oil. Will these foreign and domestic oil companies, if the Arctic Refuge were in fact opened for business, cut back on oil drilling and importing from the Middle East?

The DOE reports that Chevron, Exxon/Mobil, Phillips Petroleum, and BP imported oil from Iraq into the US in 2000. All four of these giant oil companies are also actively lobbying for the opening the Arctic Refuge in Congress. These four are also active in Qatar, while BP, Exxon and Phillips have large stakes in Saudi Arabia. Chevron and BP are drilling in Kuwait. BP is also active in Iran and Jordan, although not exporting to the US.

Though the Senate voted to block further oil imports from Iraq, Hussein had already taken action to halt his exports to the US. The Senate provision allows President Bush to certify that oil imports from Iraq can continue, if it is in the "national interest."

There is nothing in the Bush Energy Plan legislation to restrict oil imports from the Middle East. Any Arctic Refuge oil leases will simply be added to the oil company portfolios, to be drilled when the price is right.

Oily money

It is likely that George W Bush and his allies have received more campaign contributions from oil companies than any other administration in history. All told, data compiled by the nonprofit Center for Responsive Politics show that oil and gas firms donated $1,889,206 to Bush's presidential campaign, making the industry among the top ten special interest contributors to Bush in Election 2000. Individuals connected with the oil industry contributed at least an additional $85,500 to the Bush campaign. The Bush Presidential Inaugural Committee received yet another $ 1 million in contributions from oil and gas firms. The oil and gas industry contributed at least $556,700 to Bush's 1994 and 1998 campaigns for Governor of Texas. Individuals connected with the industry contributed an additional $944,733.

Of course, George W Bush's was not the only set of campaigns that benefited from the largess of the oil companies. Exxon/Mobil Corp. spent $3,280,216 to influence Congressional and Presidential campaigns from 1995 to 2000. BP/Amoco Corp. spent $2,989,073 during the same period. Occidental Petroleum spent $1,544,774; Texaco Inc. spent $1,272,585.

Senator Murkowski received $146,779 from oil and gas companies and associated individuals for his re-election campaign during the 1998 election cycle. His colleague in the House, Don Young (R-AK), also an Arctic Refuge drilling advocate, received $119,708 for his 1998 election, $ 133,850 for 2000, and so far $27,750 for his upcoming race in 2002. It was Young, incidentally, who suggested that environmentalists may have been responsible for the airplane crashes into New York's World Trade Center and the Pentagon on September 11. Attorney General John Ashcroft received $151,149 from the oil and gas industry for his failed Senate race in 2000.

There are many additional ties between the oil industry and the Bush administration - indeed, both President Bush and Vice President Cheney are former heads of oil companies in Texas.

The notion that the US can quench its enormous energy needs with oil from our public lands has for too long ruled what passes for US energy policy If there are dangers in our dependency on foreign countries for oil resources, then shouldn't we reduce our oil use?

The costs of continued use of oil should be painfully obvious every time we inhale dirty air or hear of another deadly oil spill. Scientists warn us of the dangers of global warming, caused in no small part by combustion of oil, but the Bush Administration gainsays that threat, flouting international efforts to reduce greenhouse gases.

The oil companies themselves are behind the ideology of oil addiction practiced by the Bush Administration and too many members of Congress. Flush with campaign contributions, they wish to scare us into doing what's best for big oil, not what's best for America.

Mark J. Palmer is Director of Wildlife Alive, a subproject of the International Marine Mammal Project. He formerly served as Chairman o: the Sierra Club's Arctic Campaign Steering Committee, helping thwart attempts by then-President George Bush Senior to open the Arctic National Wildlife Refuge to oil drilling. Much of the information contained in this article was compiled by member groups of the Alaska Coalition, to which the author expresses his grateful thanks.

Oil watch

Index of Website

Home Page