Category Archives: Big Oil

Big Oil, Big Mess

[UPDATE]:

Via Gawker, it appears to have been an elaborate hoax. Too bad.

Apparently lawyers are being contacted, etc. etc.

————————————

Today’s schadenfreude comes courtesy of Shell Oil, which held a private party at the Seattle Space Needle last night to commemorate their latest Arctic oil drilling venture. A 3-foot high “oil rig” was supposed to dispense liquor (wine?) to the party guests. Instead it made like the BP Deepwater Horizon and spewed liquor all over the party guests. All together now: awwwww!

What did I say on Tuesday about God having a sense of humor?

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Filed under Big Oil

Keystone Kaput

It appears the Obama Administration is putting the kabosh on the Keystone XL pipeline, at least, that’s the early word. Republicans are gonna howl like stuck pigs, seeing as how the oil industry has bought their support, er, invested $12 million in contributions to friendly Congress critters.

They’re also gonna make up all sorts of nonsense about how this is gonna kill tens of thousands of jobs, a blatant lie.

Here’s a handy fact sheet explaining why this project has been so controversial and a pre-emptive debunking of some of the more notorious lies which I’m sure will be all over the news today because journalists won’t be able to “fact-check” at Wikipedia.

Oh, and yay. We finally win one. (Knock wood.)

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Filed under Barack Obama, Big Oil, environment

Told Ya So

It’s not like we didn’t already know the Iraq War was all for oil or anything, and it’s not like we haven’t seen every other rationale go up in smoke (Saddam’s WMDs, al-Qaeda, “let’s fight them over there so we don’t have to fight them here, yada yada). So this post won’t be a shocker to anyone. But hey, wouldn’t it be funny if we could find out what really happened in Dick Cheney’s energy task force meetings?

Well, thank God the Brits can point us in the right direction:

Five months before the March 2003 invasion, Baroness Symons, then the Trade Minister, told BP that the Government believed British energy firms should be given a share of Iraq’s enormous oil and gas reserves as a reward for Tony Blair’s military commitment to US plans for regime change.

The papers show that Lady Symons agreed to lobby the Bush administration on BP’s behalf because the oil giant feared it was being “locked out” of deals that Washington was quietly striking with US, French and Russian governments and their energy firms.

Minutes of a meeting with BP, Shell and BG (formerly British Gas) on 31 October 2002 read: “Baroness Symons agreed that it would be difficult to justify British companies losing out in Iraq in that way if the UK had itself been a conspicuous supporter of the US government throughout the crisis.”

The minister then promised to “report back to the companies before Christmas” on her lobbying efforts.

The Foreign Office invited BP in on 6 November 2002 to talk about opportunities in Iraq “post regime change”. Its minutes state: “Iraq is the big oil prospect. BP is desperate to get in there and anxious that political deals should not deny them the opportunity.”

After another meeting, this one in October 2002, the Foreign Office’s Middle East director at the time, Edward Chaplin, noted: “Shell and BP could not afford not to have a stake in [Iraq] for the sake of their long-term future… We were determined to get a fair slice of the action for UK companies in a post-Saddam Iraq.”

Whereas BP was insisting in public that it had “no strategic interest” in Iraq, in private it told the Foreign Office that Iraq was “more important than anything we’ve seen for a long time”.

BP was concerned that if Washington allowed TotalFinaElf’s existing contact with Saddam Hussein to stand after the invasion it would make the French conglomerate the world’s leading oil company. BP told the Government it was willing to take “big risks” to get a share of the Iraqi reserves, the second largest in the world.

Over 1,000 documents were obtained under Freedom of Information over five years by the oil campaigner Greg Muttitt. They reveal that at least five meetings were held between civil servants, ministers and BP and Shell in late 2002.

The 20-year contracts signed in the wake of the invasion were the largest in the history of the oil industry. They covered half of Iraq’s reserves – 60 billion barrels of oil, bought up by companies such as BP and CNPC (China National Petroleum Company), whose joint consortium alone stands to make £403m ($658m) profit per year from the Rumaila field in southern Iraq.

You know, if this shit went on in the UK you can be damned sure it happened here in the United States.

Isn’t it peachy to know that well before the invasion of Iraq on the pretense of finding “weapons of mass destruction” and under the threat of “smoking guns becoming mushroom clouds,” behind the scenes oil companies were already divvying up the booty?

One, two, three, four, what the hell are we fighting for?

Oh yeah, and why do we still have tens of thousands of troops over there? Anyone?

And can you believe that no one has yet gone to jail for this? Thousands of American soldiers dead or maimed or mentally shattered, our budget sent into debt for a war that was never paid for, tens of thousands of Iraqi civillians dead or living as refugees, all for western greed.

And no one is in jail.

Yeah sure, they hate us for our freedoms. Right.

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Filed under Big Oil, BP, Iraq War

>Punk’d

>[UPDATE]:

New York TImes covers the story.

———————————-

Hey James O’Keefe! Here’s how you punk the media:

If we had to get punked, we’re glad it was by the Yes Men, who have quite a track record of pulling really convincing stunts. Their slightly off URL, www.chevron-press.com, was a spitting-image spoof of the real www.chevron.com. Also, Yes Men hucksters clearly watch Mad Men as often as we do and were riding high from Don Draper’s nuclear-option “Why I’m Quitting Tobacco” letter in the New York Times.

Yes Men’s version involved an ad with a smiling elderly indigenous man wearing a bandana, with the words “OIL COMPANIES SHOULD CLEAN UP THEIR MESSES,” along with a red stamp that reads “We Agree”–followed by the signatures of Chevron higher-ups. The ad was supposed to be a reference to a years-long lawsuit in Ecuador, where Chevron is accused of being responsible for $27 billion of oil pollution clean-up costs. Chevron.com refers to the Ecuadorian lawsuit as “a meritless case”; according to the Christian Science Monitor , Chevron has taken out quarter-page newspaper ads with defensive headlines like “the fraud of the century.” Nevertheless, Ecuadorians appeared to be the heroes of Chevron’s new ad campaign. It was fake, we now know.

Well, don’t feel so bad: you weren’t alone! Advertising Age also fell for the hoax, as did AFP and some online energy journals.

Chevron is not amused:

SAN RAMON, Calif., Oct. 18, 2010 – Earlier today, a group of environmentalists cyber-posing as Chevron officials illegally spoofed Chevron’s just-launched “We Agree” advertising campaign. While such a campaign does exist, its official URL is Chevron.com/weagree. The advertisements released earlier today, at Chevron-weagree.com, were an elaborate subterfuge and must not be mistaken as real.

“Chevron does not take this attack lightly,” said Hewitt Pate, General Counsel for Chevron. “We invest extremely heavily in our campaigns, and we take them extremely seriously. Such actions can never be tolerated.” Though the exact cost of “We Agree” must remain confidential, Chevron routinely spends $90 million per year on US advertising alone.

Pate also noted that the environmentalists have made libellous allegations regarding Chevron’s record and obligations in Ecuador and beyond. “Despite what some will say, we are not obliged to abide by decisions that Ecuadorian judges make or do not make. This is because we have binding agreements with the Ecuadorian Government exempting us from any liabilities whatsoever, granted in exchange for a $40 million cleanup of some wells by Texaco in the 1990s.”

See! That totally proves that they didn’t do anything wrong! Nothing whatsoever! Because Chevron cares! And they proved it by signing a binding agreement with the government of Ecuador to clean up some wells. Problem solved! Agree?

Last year the Yes Men punk’d the U.S. Chamber of Commerce by holding a fake press conference. In 2007 they posed as executives from ExxonMobil at an oil industry conference.

A Real Chevron Press Release. Accept No Substitutes.

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Filed under Big Oil, Chevron, the yes men

>Big Oil Will Get Right On That

>I’m sure this effort will be about as successful as this one was. Meaning, squat.

But at least people are trying. I don’t think these corporations give a shit, but so what else is new.

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Filed under Big Oil, corporations, environment

>Just A Reminder

>Oil is a dirty, unsafe business:

Over 500 fishing boats join Dalian oil spill cleanup operations after pipeline explosion

DALIAN, July 19 (Xinhua) — Over 500 fishing boats Monday joined a massive oil spill clean-up operation underway off the coast of northeastern China’s Dalian City, three days after pipelines exploded near the city’s oil reserve base, one of China’s largest.

A dark-brown oil slick has stretched over at least 183 square kilometers of ocean near blast-hit Xingang port, with 50 square kilometers severely polluted.

The over 500 fishing boats have been loaded with oil absorbers and dispersants to help in the clean-up south of Dalian’s Golden Pebble Beach and east of Bangchui Island.

We never did get that serious debate on our oil dependency and the harm it does to the environment. Instead we got ridiculous politicians like Haley Barbour, drunk on oil money, claiming offshore oil drilling was safe (it’s not).

I’d rather we accept the very obvious risks as fact and move forward with the debate from there. If people think the risks are worth continuing our dependency on dead dinosaurs, then explain why. But I suspect we never have these hard conversations because Certain Important People won’t like what most people believe in this country. Some facts are a little too inconvenient. So we never have the conversation, we just talk about the unimportant stuff. Nothing to see here, move along.

It’s the dirty shame of our current political stalemate that nothing important is every seriously discussed so nothing substantial can ever be done about it. And the money keeps flowing. Huzzah.

Years from now we will look back on this time with astonishment.

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Filed under Big Oil, energy production, environment

>All Of Those Leaky Offshore Oil Wells

>Well this is just peachy. AP has discovered the Gulf of Mexico is littered with over 27,000 abandoned oil and gas wells, some dating back to the 1940s. None are being monitored to determine if they are leaking which, considering the age of some of these wells, they undoubtedly are.

I wrote about one such well three weeks ago. Taylor Energy’s Ocean Saratoga rig has been leaking 10 miles off the Louisiana coast since Hurricane Ivan hit back in 2004! (Remember when John McCain said hurricanes don’t affect offshore oil rigs? Yeah, me too.)

The Ocean Saratoga leak has been small — an estimated 14 gallons a day — but over six years it’s created a 10-mile-long oil slick captured on satellite. Worse, Taylor Energy says they’ve been working all this time to plug the leak. Okay, I’m going to call bullshit on that. Six years, people? You can’t stop a small oil leak after six years? If that’s the case, then things look pretty dim for BP’s gusher. Excuse me for saying this, but I don’t think the folks at Taylor Energy are trying very hard.

Anyway, I’m not surprised that the AP has uncovered leaky oil and gas wells going back decades. I’m not surprised that this is suddenly a news story. But I am surprised that people in the industry whose business it is to know about such things have basically kept quiet about it. I’m disturbed that the Interior Dept. has not conducted inspections, nor did it mandate that the oil industry do so. I’m tired of us ignoring things until a major disaster occurs, at which point we pass some legislation which inevitably is ignored.

I’m not surprised, but I’m very, very bothered by this:

Regulations for temporarily abandoned wells require oil companies to present plans to reuse or permanently plug such wells within a year, but the AP found that the rule is routinely circumvented, and that more than 1,000 wells have lingered in that unfinished condition for more than a decade. About three-quarters of temporarily abandoned wells have been left in that status for more than a year, and many since the 1950s and 1960s — even though sealing procedures for temporary abandonment are not as stringent as those for permanent closures.

As a forceful reminder of the potential harm, the well beneath BP’s Deepwater Horizon rig was being sealed with cement for temporary abandonment when it blew April 20, leading to one of the worst environmental disasters in the nation’s history. BP alone has abandoned about 600 wells in the Gulf, according to government data.

(Before we go any further, let me say the very first thing on the agenda for the Bureau of Ocean Energy Management, Regulation & Enforcement (formerly MMS) should be an immediate and thorough assessment of all abandoned oil wells.)

There seems to be a pattern here. After the Kingston coal sludge disaster, we learned about more leaky TVA coal sludge ponds. But what was done about it?

The EPA has spent the past year assessing coal ash containment facilities. Last month they announced two options for dealing with coal ash, one regulating it as “special waste” and one treating it as “non-hazardous” which means basically keeping things exactly the way they are:

The EPA itself admits that under its weaker option, many states will not adopt strict federal guidelines and that approximately 50% of the coal ash generated in the U.S. will continue to be managed under state programs that do not require basic disposal safeguards.

I wonder which option the coal industry and electrical utilities support?

It cannot be stated often enough or loudly enough: there is a cost to our inaction and denial. We simply can no longer afford to put the needs of the energy industry above the needs of everyone and everything else. We can no longer tolerate one industry riding roughshod over everyone and everything else.

We cannot allow Big Oil and King Coal to dictate the health of the water we drink and the air we breathe, to destroy an entire fishing industry for which we have no alternative. Oil and coal are important to our economy right now, that’s a fact of life. But they are transient. Guess what: we have alternatives to oil and coal. We don’t have alternatives for clean air and water.

My message to Big Oil and Big Coal is a simple one: you’re selfish, greedy and irresponsible. Sorry guys, but you know it’s true. You’re important, but we do have alternatives. On top of which, your business depends on a finite resource. God stopped making dinosaurs a few million years ago. So if you want to keep playing on our playground, quit being bullies.

Learn to share.

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Filed under Big Oil, clean coal, energy production, EPA, Gulf oil spill

>Stacking The Deck

>Yeah, such a shame that renewable energy isn’t competitive. If only solar and wind could stand on its own, you know like how oil does:

But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.

According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.

And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by various credits. These companies’ returns on those investments are often higher after taxes than before.

When your return on investment is higher after taxes, that’s what I call a giveaway.

Here’s the part I love:

The American Petroleum Institute, an industry advocacy group, argues that even with subsidies, oil producers paid or incurred $280 billion in American income taxes from 2006 to 2008, and pay a higher percentage of their earnings in taxes than most other American corporations.

Um, so? So what? You’re supposed to pay twice or three times what you do, but you want a lollipop for paying something? What, are we supposed to say thank you? Sorry dudes, that’s not how it works. Oil companies are insanely profitable. So pay what you owe and shut up.

You know, one thing I really can’t stand is hearing how solar and wind energy simply are not competitive. Right. Let’s give renewable energy the same tax deal that oil gets, ‘mmkay? And while we’re at it, let’s factor in the true cost of fueling our economy on dead dinosaurs. Let’s include the cost of the environmental damage from air pollution and climate change and oil spills. Don’t forget the $167 billion a year we spend on war to secure our access to oil in the Middle East.

Here is something worth considering:

Some of the tax breaks date back nearly a century, when they were intended to encourage exploration in an era of rudimentary technology, when costly investments frequently produced only dry holes. Because of one lingering provision from the Tariff Act of 1913, many small and midsize oil companies based in the United States can claim deductions for the lost value of tapped oil fields far beyond the amount the companies actually paid for the oil rights.

Once upon a time, oil was a new technology and the American government felt it worthwhile to encourage this nascent industry with tax incentives and tax breaks. That was a long, long time ago but it’s generally how we do things. But oil is no longer a new technology, it’s now the big bully on the block. Other nascent industries are coming up and the American government should be encouraging these energy technologies with comparable tax incentives and tax breaks. But any attempt to do so is met with manufactured outrage from people like the American Petroleum Institute. We have to fight tooth and nail for the smallest crumbs, and it’s not anything close to comparable to what Big Oil gets.

It’s time to demand some parity here.

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Filed under alternative energy, Big Oil, taxes

>Good News, Bad News

>First, the good:

KNOXVILLE — TVA is reversing course and resuming new enrollments in its Generation Partners pilot project to encourage renewable energy use throughout its service territory after being criticized by area alternative energy contractors.

The federal utility made the announcement this afternoon after meeting with contractors who have complained that TVA’s recent decision to suspend the Generation Partners program will harm their business.

This is great news. Momentum continues to build for alternative energy in the Tennessee Valley, and TVA has decided to stick with its successful, though modest, incentive program. It only makes sense; as was pointed out here, TVA is spending $3 billion cleaning up the Kingston Fossil Plant’s coal sludge spill, yet devotes just $50 million to its solar program. Sorta like BP spending $20 billion to clean up the Deepwater Horizon mess, when it could have spent $500,000 on a blowout preventer. Very, very stupid.

Now, the bad news:

But about three miles off the coast of Alaska, BP is moving ahead with a controversial and potentially record-setting project to drill two miles under the sea and then six to eight miles horizontally to reach what is believed to be a 100-million-barrel reservoir of oil under federal waters.

All other new projects in the Arctic have been halted by the Obama administration’s moratorium on offshore drilling, including more traditional projects like Shell Oil’s plans to drill three wells in the Chukchi Sea and two in the Beaufort.

But BP’s project, called Liberty, has been exempted as regulators have granted it status as an “onshore” project even though it is about three miles off the coast in the Beaufort Sea. The reason: it sits on an artificial island — a 31-acre pile of gravel in about 22 feet of water — built by BP.

Well that’s special. BP doesn’t exactly have a proven track record, yet they were allowed to dump a 31-acre pile of gravel in the water to classify their risky, untested drilling operation as “onshore”? That just screams Bush Administration-style shuck and jive, doesn’t it?

It gets worse:

Rather than conducting their own independent analysis, federal regulators, in a break from usual practice, allowed BP in 2007 to write its own environmental review for the project as well as its own consultation documents relating to the Endangered Species Act, according to two scientists from the Alaska office of the federal Mineral Management Service that oversees drilling.

The environmental assessment was taken away from the agency’s unit that typically handles such reviews, and put in the hands of a different division that was more pro-drilling, said the scientists, who discussed the process because they remained opposed to how it was handled.

“The whole process for approving Liberty was bizarre,” one of the federal scientists said.

The scientists and other critics say they are worried about a replay of the disaster in the Gulf of Mexico because the Liberty project involves a method of drilling called extended reach that experts say is more prone to the types of gas kicks that triggered the explosion on the Deepwater Horizon.

I’m sorry, but why are we allowing this to move forward? Now that we know BP ain’t exactly honest brokers here, that their accident “response” plan for the Gulf of Mexico included such impossible scenarios as walruses in the Gulf of Mexico, that they cut corners and were blinded by the dollar signs in their eyes. That pretty much proves they aren’t paying close attention to stuff like safety and environmental protection. And we’re going to let yet another “never been done before” drilling operation move forward?

I’ve said it before a thousand million gazillion times but I’ll say it again: the easy oil is gone. All that’s left are oil reserves that are more difficult, more expensive, and riskier to tap. This means for a company like BP to make money, they will cut corners and they will take unnecessary risks. Their business model depends on it.

Look, now that we know what we know, it is unconscionable to allow this project to move forward without, at the very least, a more thorough review of safety and risks. C’mon, people. Don’t be stupid.

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Filed under alternative energy, Big Oil, solar energy, TVA

Monday Is Mission Accomplished Day

Not that fake Misison Accomplished Day either, the one where President Bush strutted around an aircraft carrier. No, Monday is the day ExxonMobil, Chevron and the rest have been waiting for:

BAGHDAD — When Iraq puts development rights to some of its largest oil fields up for auction to foreign companies on Monday, the bidding will be a watershed moment, representing the first chance for petroleum giants like ExxonMobil to tap into the resources of a country they were kicked out of almost 40 years ago.

[…]

The oil companies are also somewhat disgruntled, being forced to compete for 20-year service contracts and not the more lucrative production sharing agreements they would prefer. Such agreements would allow them to share directly in the profits from oil production, rather than getting fixed fees.

In other words, they wanted something akin to the deal the Americans wrote for them exactly one year ago:

In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said.

That deal was withdrawn as it stoked outrage not only among Americans but in Iraq as well. As I wrote at the time, it was a little fishy that the contracts were awarded to the very same companies Saddam Hussein had kicked out of the country when he took power in the 1970s. You can’t really talk about “the central front in the war on terror” and “breeding Democracy in the Middle East” and all that other hogwash when you’re literally writing the contracts restoring foreign oil companies to their former status before the dictator you just deposed took power. At the time, the New York Times called it

a twist of corporate history for some of the world’s largest companies, [that] all four oil majors that had lost their concessions in Iraq are now back.

Oh, liberal media! You are adorable! A mere twist of corporate history, the turn of the karmic wheel. Just luck!

Sheesh.

Anyway, as Bill Maher said at last night’s Ryman show, “if you’re going to invade a country for oil, at least get some damn oil!” So, Mission Accomplished.

That said, I do not want to hear any more whining from conservatives about the recently-passed American Clean Energy and Security Act (aka, “cap-and-trade” or the Climate Bill) as being a job crushing, tax-increasing boondoggle.

Don’t you even start with me about this being a “carbon tax” — what do you think the Iraq War has been? The one that cost $700 billion in direct costs, is estimated to cost $1 trillion before all’s said and done, has killed thousands of Americans, wounded thousands more, destroyed our credibility on the world stage, and divided the country, all to maintain the status quo of an oil-based economy. How long will we be paying that bill, do you think?

Congressmen Jim Cooper and Bart Gordon get my thanks for voting to pass the climate bill, though other so-called “Democrats” in Tennessee didn’t have the courage (yes, Lincoln Davis and John Tanner, I’m looking at you. For shame!)

Lamar Alexander voted for the Iraq War, the bloodiest carbon tax this country has ever enacted. Bob Corker has indicated he at least understands the issues of climate change but he’s trying to prove his conservative bonafides, so I don’t hold out much hope for him supporting a bill that has generated ire from the tea-bag crowd. But he’s been known to surprise me.

All of which means to say: when we’re talking about energy policy, let’s not forget what the Iraq War was about.

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Filed under Big Oil, climate change, Iraq War