Petro-oligarchs play presidential candidates

After days of Republican attack ads that compared him to Britney Spears and Moses, Barack Obama celebrated his 47th birthday Aug. 4 by releasing his own TV spot accusing John McCain of being “in the pocket” of Big Oil. The ad came as Obama unveiled his energy plan to combat the US “addiction” to foreign oil, “one of the most dangerous and urgent threats” the country has ever faced. McCain campaign spokesman Tucker Bounds responded that the ad “shows his celebrity is matched only by his hypocrisy” because Obama has also received $400,000 in campaign contributions from oil companies. (CanWest, Aug. 4)

Obama told a Florida newspaper Aug. 1 that he would be willing to support limited offshore drilling. “My interest is in making sure we’ve got the kind of comprehensive energy policy that can bring down gas prices,” Obama told the Palm Beach Post. “If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage—I don’t want to be so rigid that we can’t get something done.” (WSJ, Aug. 1)

The US consumes nearly one-fourth of the world’s oil but produces only about 10%. Its 1.76 billion-acre Outer Continental Shelf, which extends from about 3 to 200 miles offshore, is the key domestic resource. In 2006, a consortium led by Chevron estimated that a geological area about 175 miles from Louisiana cold hold 15 billion barrels of oil.

Since Congress imposed a moratorium on new drilling in 1981, most of the nation’s coastline has been off-limits. The Oil Lobby points out that no such ban exists in producers such as Brazil and Norway, which have found large oil deposits offshore. The Lobby points to polls indicating two-thirds of Americans favor new drilling for oil and gas.

A July 14 USA Today piece which was a blatant wet kiss to the Lobby mentioned the 1969 Santa Barbara oil spill which prompted the push for the moratorium. It names Louisiana and California as the two states most impacted by offshore development—and portrays eagerness for more:

Louisiana has had offshore drilling since 1947. About 172 active rigs dot the Gulf of Mexico waters off the coast, producing about 79% of the oil and 72% of the natural gas that comes from drilling off the nation’s coastlines. The state gets about $1.5 billion annually in oil and gas revenue, a figure that will grow when it starts receiving part of oil companies’ royalty payments in 2017 under federal law. “It’s absolutely worth it,” says Garret Graves, head of the Governor’s Office of Coastal Activities. The biggest environmental impact has been the estimated 10,000 miles of canals dug by the oil and gas companies to transport oil and lay pipelines. The canals crisscross the coastal wetlands of Louisiana and have contributed to coastal erosion, says Mark Davis of Tulane University. Environmentalists say the canals and lack of marshland removed an important natural buffer against storms and amplified Hurricane Katrina’s damage. Offshore drilling also draws bustling ports, pipelines, petrochemical plants and other infrastructure that can disrupt natural coastal ecosystems. “Where you have oil and gas, you have petrochemical plants,” says Cynthia Sarthou of the Gulf Restoration Network. “I haven’t seen one come without the other.” 

California was home to the first U.S. offshore oil production in 1896, from a wooden pier in Summerland. Today, it’s easy to spot oil rigs from coastal highways and the pricey seaside real estate that dots Santa Barbara County’s hillsides. There are 26 oil and gas drilling platforms off the southern California coast and 1,500 active wells. Those in federal waters have produced more than 1 billion barrels of oil and 1.5 trillion cubic feet of natural gas since the 1960s, says John Romero of the Minerals Management Service. Since the 1969 spill, he says, they’ve spilled only 852 barrels of oil, the result of better technology and regulatory vigilance.

Congress is meanwhile locked in a partisan dispute over legislation aimed at lowering gas prices. From CNN, July 25:

In the Senate, a bill meant to crack down on oil speculation has stalled because of a partisan procedural fight. On Friday, Republican senators were able to prevent a final vote on the bill by winning a procedural vote. Democrats got 50 votes, 10 votes short of the 60 required by Senate rules. Forty-three GOP senators voted against the bill. “The Republican senators have chosen to take a dodge,” Senate Majority Leader Harry Reid, D-Nevada, said after the vote, according to The Associated Press. “If you don’t like our speculation bill, what do you want? Silence. They said they want this energy debate to go on forever.” The fight in the Senate revolves around Republicans wanting to offer up to 28 amendments on a range of energy issues, including an expansion of offshore drilling, but Democrats want to limit them to two, saying there is not enough time to consider more. Republicans said they want an open debate and the opportunity to vote on a wide range of issues. They accused Democrats of trying to limit amendments to avoid a vote on offshore drilling—an assertion the Democrats deny.

A July 23 oil spill that closed the Mississippi River at New Orleans initially covered 90% of the surface of the river after a barge collided with a tanker. The closure of the river cost the US economy an estimated $275 million a day. (CNN, July 25) The spill came at a very bad time for John McCain. As commentator Carl Hultberg wrote on his RagMag e-list:

God Hates You On his way to a press conference on an oil rig off the coast of Louisiana, set up to demonstrate how safe off shore oil drilling has become, John McCain was thwarted by a: a hurricane, b: an oil tanker collision on the lower Mississippi that spilled hundreds of thousands of gallons of fuel. His could-be running mate Right Wing Obama clone Bobby Jindal, recently elected boy governor of Louisiana, was also supposed to have appeared on the oil rig. Jindal’s mother and father immigrated from India. He converted to Catholicism before becoming Governor. McCain’s religion is undetermined.

The League of Conservation Voters’ Act Green blog dubbed the storm “Hurricane Irony.” A July 15 commentary on the Keloland blog disputes the McCain-Jindal claim that hurricanes pose little threat to oil platforms—finding it particularly ironic that Katrina has been invoked in this regard:

The right even brought out Louisiana Governor and possible McCain VP pick Bobby Jindal to repeat the Katrina claims. The problem? Apparently Jindal doesn’t know what happened in his own state and the rest of the puppets either don’t know or refuse to admit that these claims are patently false.

Hurricanes Katrina and Rita Caused 124 Offshore Spills For A Total Of 743,700 Gallons. 554,400 gallons were crude oil and condensate from platforms, rigs and pipelines, and 189,000 gallons were refined products from platforms and rigs. [MMS,* 1/22/07] Hurricanes Katrina and Rita Caused Six Offshore Spills Of 42,000 Gallons Or Greater. The largest of these was 152,250 gallons, well over the 100,000 gallon threshhold considered a “major spill.” [MMS, 5/1/06]Putting aside the fact that the oil companies already have 68 million acres of unused leases and any oil discovered from new offshore drilling will not even hit the market until around 2017 and that the same oil will just go onto the world market likely just helping to feed the ever growing demands from China, claiming that new drilling offshore poses little or no environmental threats is an outright lie.

*US Minerals Management Service See our last posts on petro-oligarchical rule and the offshore controversy.


  1. Oil lobby demands offshore rights from new prez
    From PR Newswire, Oct. 14:

    At Platts Energy Podium, API Chief Says Offshore Policy Needs Clarity
    WASHINGTON — U.S. oil companies will need clarity from the next president and Congress quickly as to whether the recent lapse of the moratorium on offshore oil and gas drilling that opened more of the Outer Continental Shelf (OCS) to exploration is something other than a “temporary aberration,” American Petroleum Institute President Red Cavaney said today.

    “We need some signal that the moratorium is not a temporary measure but a permanent measure,”[*] Cavaney said at a Platts Energy Podium event in Washington. “Many companies want to see a positive, proactive signal.”

    Cavaney, who plans to step down Nov. 1 as president of API to work in the Washington office of ConocoPhillips, said the new Congress will likely take up the exploration issue again when it returns in January, after an effort this fall failed on disagreements over the size and scope of OCS territory to be opened. About 18 billion barrels of crude oil and 700 trillion cubic feet of natural gas are estimated to lie offshore in the U.S. in restricted areas, according to the U.S. Energy Information Administration.

    While President George W. Bush in July lifted the presidential moratorium on offshore oil and gas drilling that had been in place since 1990, congressional Democrats and Republicans were unable to agree on a legislative package that would have opened up more drilling in the OCS. Nevertheless, Democrats were forced to let the congressional moratorium, which has to be renewed every year, expire in order to avoid a showdown with Republicans who demanded an up-or-down vote on offshore oil drilling.

    Cavaney said that key provisions of the new legislation must include drilling rights that are less than 50 miles offshore. Earlier legislation proposed by the so-called “Gang of 10” in the Senate only permitted oil drilling no closer than 100 miles from shore. “The majority of the undiscovered, exploitable oil and natural gas is within 50 miles or less” offshore, Cavaney said.

    Cavaney said that if drilling is not permitted closer in, the industry would have to use ultra-deep water rigs, which would force companies to hire outside of the U.S. for expertise, potentially letting an opportunity to boost U.S. employment go unfulfilled. Drilling out beyond 100 miles would also preclude states from sharing revenue from oil production, Cavaney said. Inshore exploration “would provide states the ability to put gas processing plants right offshore and provide jobs,” he said.

    *Sic. Obviously he means “some signal that the lifting of the moratorium is not a temporary measure.” One would think the American Petroleum Institute could afford proofreaders.