When I was six years old, one of the most popular songs on the radio was a song titled, “Tell Me A Story”, which rose as high as #4 on the charts in 1953. If you’re feeling nostalgic, you can listen to the entire song by clicking on the line below:
Tell Me A Story
Two minutes into this video is the line, “You promised me, you said you would “, which leads directly into our modern day world.
About a week ago, we passed the 23rd anniversary of the grounding of the Exxon Valdez in the pristine waters of Prince William Sound in Southern Alaska. Since the captain of the vessel (Joseph Hazelwood) had been drinking on the day of the collision, he allowed an uncertified officer to steer the huge vessel. When the vessel hit a reef, the resulting gash in the hull released 11,000,000 gallons of oil into the water. Wind currents spread the oil 100 miles from its source, which eventually polluted more than 700 miles of coastline, and adversely affected hundreds of thousands of birds and animals. Until the Deepwater Horizon disaster of 2010, it was the worst oil spill in history.
“Popeye the sailor man” (Hazelwood) was convicted of misdemeanor negligence, fined $50,000, and ordered to perform 1000 hours of community service. In July of 1992, an Alaska court overturned Hazelwood’s conviction, which meant that his punishment for his negligence was …
The Exxon Valdez was repaired, and renamed several times. Its current name is “Oriental Nicety”, it’s owned by a company in Hong Kong, and it’s FINALLY heading to the scrap heap.
Exxon itself was condemned by the National Transportation Safety Board. Under pressure from environmental groups, Exxon agreed (in 1991) to pay a penalty of $100 million, and to provide $1 billion over a period of 10 years to pay for cleanup expenses. Later that same year, though, the state of Alaska and Exxon reached a revised agreement, and settled the case for $25,000,000, less than 4% of the amount that they had agreed to earlier that year.
Whatever happened to, “ You promised me, you said you would?”.
To quote a 1980 Star Kist commercial,
To add insult to injury, the Federal and Alaska governments determined in 2006 that there was lingering damage from the 1989 spill, which would require an additional $92 million from ExxonMobil. Not surprisingly, that money hasn’t been paid either.
ExxonMobil isn’t exactly short of cash.
In 2011, the company had a profit of $41 billion. The combined profit for the years from 2001 through 2011 was approximately $341 billion. As a group, the Big Five oil companies earned slightly in excess of $1 trillion during this time frame.
Being a prudent company, ExxonMobil has been using its profits wisely. The company used $22 billion (53%) of its 2011 profits to buy back its own stock, which raises the value of the remaining shares. The profits were also used to increase the company’s cash reserves to a total of $11 billion.
Since it’s always good to have friends in high places, the company spent $146,000,000 in official lobbying expenditures in 2011, and also contributed close to $18,000,000 to federal candidates, 90% of whom were Republicans.
One of the politicians who benefited from the largess of the oil companies is Representative Cliff Stearns, the Republican congressman from Florida. Coincidentally, he also happens to be the chair of the House Energy and Commerce subcommittee on Oversight and Investigations, which puts him a a good position to criticize any idea (such as green energy) that doesn’t support the oil and gas industries in our country.
Due to the fact that the Big Oil companies have been earning record profits in recent years, Representative Stearns feels that they need even LARGER subsidies than the are currently receiving. He also believes that we have too many national parks, so we should start selling them off to private investors.
Another politician who has benefited from oil company support is House Speaker John Boehner, the Republican congressman from Ohio. Like the major oil companies, he also has investments in the Canadian companies that are using fracking to extract oil and natural gas from the tar sands in Alberta. (At the end of January, 2012, he owned shares in seven different Canadian tar sands companies.) As a result, he would profit PERSONALLY from the approval of the Keystone XL pipeline, which is why he is currently being investigated by the SEC.
Although the oil companies have spent a LOT of money on political contributions and lobbying expenses, it was money well spent. For now, ExxonMobil and the other big oil companies have retained $4 billion in annual tax breaks, and the Big Oil companies have also retained $53 billion in taxpayer subsidies for lost royalties from offshore oil production.
On March 29, Senate Republicans rejected President Obama’s call to end Big Oil tax breaks, so they appear to be safe for the time being.
As a result of the 2010 Deepwater Horizon spill, BP agreed to pay $7.8 Billion. Unfortunately, the settlement doesn’t actually help the State of Louisiana. Although it’s difficult to determine when all of the plaintiffs will actually receive their money, it’s a fairly safe bet that it will occur sometime after the event pictured below:
Even if BP ultimately pays money towards the Gulf disaster, their plans are (at least at this point) to use at least a portion of their loss as a tax deductible expense.
If you measured oil companies in terms of oil reserves, the reserves held by companies in the Middle East dwarf the rest of the world. The National Iranian Oil Company is a close second to the Saudi Arabian Oil Company, which will continue to complicate the world’s relationship with that country for years to come. The reserves held by American oil companies are a tiny fraction of the total, which means it’s impossible for us to drill our way to energy independence, regardless of what your Republican congressman is telling you.
In terms of annual revenue, though, Royal Dutch Shell leads the world.
One of the company’s latest projects is drilling exploratory wells in the Beaufort and Chukchi seas, roughly 20 miles north of the environmentally fragile Arctic National Wildlife Refuge. In order to ensure that they’re successful in their venture, the company has sued the Center for Biological Diversity and 12 other environmental groups. So far, the environmental groups have been successful in stopping every offshore drilling proposal in Arctic waters since 2007.
On August 4, 2011, the Department of the Interior granted Royal Dutch Shell conditional approval to begin drilling exploratory wells in the Arctic Ocean in the summer of 2012. Predictably, that decision didn't turn out well, and the grounding of the drilling platform Kulluk at the end of December of 2012 should serve to confirm that drilling in the Arctic isn't a very good idea.
Although company officials publicly announced in February that they have dropped plans for drilling this year, (tell me a story …) Federal officials HAVE approved an oil spill response plan that could allow drilling in the Beaufort sea this summer. In view of the extreme difficulty in controlling oil spills in the Arctic, even THAT plan will likely to be challenged if drilling commences again.
Since 88% of Alaska’s revenue comes from the oil and gas industry, Alaska state officials (such as Senator Lisa Murkowski) are naturally hoping that Shell gets the “green light” to start drilling again.
Since Shell also has large investments in the Canadian tar sands projects, the chairman of the company, is bewildered why the Obama administration wants to withhold approval of the Keystone XL pipeline.
By now, you are probably feeling a little disgusted by the antics of the Big Oil companies, and rightly so. However, boycotting Shell or BP stations to protest your indignation really won’t accomplish anything. For one thing, the companies have so much cash that they could care less what your opinion is. For another, many gas stations are owned by individuals, so boycotting them will simply hurt local businesses.
The Obama administration is pursuing a multi-faceted clean energy and environmental policy, which he elaborated on in this year’s State of the Union address. Nevada, of all places, could be a good example of how that multi-faceted program would work.
During his State of the Union address, the President proposed "responsible development" of domestic oil and natural gas even as he pledged to invest in renewable energy. “We don’t have to choose between our environment and our economy,” he said.
Oil production in Nevada peaked in 1990, and has been declining ever since. Since 1985, however, there has been an explosion of geothermal power production, which should make environmentalists happy. Just as important, however, is the discovery of HUGE deposits of oil (as much as 4.67 billion barrels of oil) buried deep beneath the surface, in a rock formation known as Chainman Shale.
To ensure that the programs he mentioned are carried out, it’s imperative that we, as voters, also take action, and our mandate is clear:
1) since the oil and gas industries apparently have a "death grip" on the current version of the Republican Party, we need to vote out of office every single Republican candidate that you can think of
2) we also need to vote out of office every politician that has ties to the American Legislative Executive Council
Some of the “good guys” will survive our purge, and they should, but it will take a combined effort from all of us to toss out the “bad apples”.
If we can all do that, this story will have a happy ending.