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| Biloxi Miss. Swimming amid globs of oil |
An unfortunate discovery in the Gulf of Mexico should have the population of the countries that surround this beautiful area on edge. Exxon, the largest oil company in the US is in a battle with the US government over leasing rights to extract oil from the giant Julia Field. The field is a few hundred miles from the site of the Deep-Water Horizon well blowout that killed 11 workers and did untold, and as yet unknown environmental damage.
The Julia Field is estimated to hold “One billion barrels of recoverable oil” the Wall Street Journal reports but the feds say that Exxon’s leases have expired. Exxon is suing to “retain” these leases and if it loses the suit, the leases, and all the oil underneath them, become the property of the US taxpayer. The US government has made an issue of these “unused” leases claiming that it is one way the oil companies avoid paying taxes.
Perhaps the most important issue here is whether there should be drilling for oil in the Gulf of Mexico at all. But another side of it is the cost to the taxpayers of all this squabbling if the federal government doesn’t concede to Exxon’s demands. With billions of dollars up for grabs we know that the energy corporation will spend considerably to get its way, not just in court but bribing officials, or what they call lobbying, as well as a media campaign to generate support.
Perhaps the most important issue here is whether there should be drilling for oil in the Gulf of Mexico at all. But another side of it is the cost to the taxpayers of all this squabbling if the federal government doesn’t concede to Exxon’s demands. With billions of dollars up for grabs we know that the energy corporation will spend considerably to get its way, not just in court but bribing officials, or what they call lobbying, as well as a media campaign to generate support.
Who knows what the development of such an oil field means in profits, but according to the WSJ, the royalties paid to the US government for extraction of the oil would amount to around $11 billion at today’s prices.
Not only Exxon, but the entire oil industry and its flunkies in politics are stunned by the US government’s position as these sort of extensions are “granted as a matter of course” the WSJ writes. “You state your case and you got it, this was expected,” says Patrick McGinn, an Exxon spokesperson.
The US Interior Department that regulates offshore oil drilling and is the defendant in the suit is in a bit of a different situation in the aftermath of the Deep-Water Horizon catastrophe. The political power of the oil industry and it’s bribing potential led to the oil industry pretty much regulating its own activities in the Gulf. As I wrote at the time of the BP disaster: The Minerals Management Service is an agency of the Interior Department that was supposed to regulate deep water drilling but left the regulation up to the industry itself.
The New York Times pointed out earlier in 2010 that an Interior Dept. investigation revealed that “Federal regulators responsible for oversight of drilling in the Gulf of Mexico allowed industry officials several years ago to fill in their own inspection reports in pencil — and then turned them over to the regulators, who traced over them in pen before submitting the reports to the agency, according to an inspector general’s report to be released this week. The report said that investigators "could not discern if any fraudulent alterations were present on these forms."
Along with the Katrina disaster, we don’t hear much about the BP spill these days as human and environmental disasters that are a product of market forces and the pursuit of profit tend to undermine the propaganda that capitalism is not at fault. Al Qaeda and the attacks of 911 are different as “foreign” elements are to blame therefore strengthening the false view that our main enemies are external rather than domestic. In my life I’ve had to deal with a few of them, Communists, Vietnamese invaders, immigrants from far off lands, Somali warlords, and now “terrorism” which is the best as terrorism is a tactic not a nation or entity we can grasp. The war on terror is better than the red scare as by its very definition it can go on forever, it is infinite like the universe.
The Exxon suit argues that “thousands” of lease extensions have been granted over time and accuses the federal government of interpreting and applying the law in ways that it “had never before applied and never before articulated.” Says the WSJ. The Norwegian oil company Statoil that owns 50% of the Julia Field has also filed suit claiming that an extension request for deep-water drilling had never “been denied” in the past.
You have to marvel at the arrogance of these companies that they would not even consider that the devastation caused by the BP spill might not have some consequences, even from a corporate friendly government like the US. The reluctance on the part of the government to freely hand over rights to Exxon to drill a few hundred miles from the disaster that nudged the Exxon Valdez spill in to second place for the nation’s worst oil spill is understandable. The corporate media in the US is the most censored and controlled in the advanced economies and has been very successful in keeping the American public in the dark. When you read the quotes from the New York Times you have to think for a while about the insanity of it, allowing the energy industry whose activities can have such devastating social and environmental consequences a free rein in how they conduct these activities.
Despite the lies of the mass media, this doesn’t mean people don’t have a general understanding that the government is in the pockets of the rich and the corporations and in the present economic crisis, yet to be concluded, the potential for social upheaval is considerable. Warren Buffet’s populist calls for higher taxes on the wealthy is a response to the fear of social unrest that will certainly break out if the extreme right wing agenda gains any traction in the coming elections.
But the bottom line is this; the paltry sum of $11 billion in royalties that the US government would pull in by allowing Exxon to set up a deep-water extraction in the Gulf of Mexico pales when compared to the cost of the Iraq and Afghanistan wars at some $10 billion every month according to some estimates. A recent study by Brown University estimates the cost of these disastrous and unwinnable offensives at $4 trillion. The US government debt at $14 trillion will hardly notice an $11 billion boost from oil royalties. The profits to Exxon and the thugs that control the corporation will never really be known of course.
The government is treading cautiously so as not to arouse any fear about further drilling in this once pristine Gulf but does not have the financial will or the political will to defeat Exxon in court using taxpayer funds. Anyway, from the US government’s point of view it’s a no brainer, private industry is in control of energy production in society.
For the millions of people affected by such decisions it is another matter. Not just the US population but the populations in other smaller and less influential countries surrounding the gulf who have no say at all in what will happen in their neck of the woods. The alternative though is to take the production of such a crucial need as energy out of private hands and in to public ownership. There is the issue of revenue---why should a handful of people earn billions through their control of this process, but there is also the issue of social and environmental consequences. The private energy industry will never genuinely develop more environmentally friendly energy resources unless there’s profit to be made.
Even within a capitalist economy, taking this industry in to public ownership would be a step forward as anything that undermines their propaganda that the market is the savior of all things is positive. It would also make alternative energy policy a little easier to introduce. However, in the last analysis the only real solution to energy production and a more sure way to prevent disasters like the BP spill from happening again is true public ownership and management which must include the workers’ in the industry from those on the ground to engineers, environmentalists and scientists as well as elected representatives from communities that are affected, domestic and foreign. In other words, the profit motive has to go.
Letting Exxon drill a deep-water well in the Gulf of Mexico is what we call here int eh US a "no brainer"-----don't allow it.
The government is treading cautiously so as not to arouse any fear about further drilling in this once pristine Gulf but does not have the financial will or the political will to defeat Exxon in court using taxpayer funds. Anyway, from the US government’s point of view it’s a no brainer, private industry is in control of energy production in society.
For the millions of people affected by such decisions it is another matter. Not just the US population but the populations in other smaller and less influential countries surrounding the gulf who have no say at all in what will happen in their neck of the woods. The alternative though is to take the production of such a crucial need as energy out of private hands and in to public ownership. There is the issue of revenue---why should a handful of people earn billions through their control of this process, but there is also the issue of social and environmental consequences. The private energy industry will never genuinely develop more environmentally friendly energy resources unless there’s profit to be made.
Even within a capitalist economy, taking this industry in to public ownership would be a step forward as anything that undermines their propaganda that the market is the savior of all things is positive. It would also make alternative energy policy a little easier to introduce. However, in the last analysis the only real solution to energy production and a more sure way to prevent disasters like the BP spill from happening again is true public ownership and management which must include the workers’ in the industry from those on the ground to engineers, environmentalists and scientists as well as elected representatives from communities that are affected, domestic and foreign. In other words, the profit motive has to go.
Letting Exxon drill a deep-water well in the Gulf of Mexico is what we call here int eh US a "no brainer"-----don't allow it.
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