Since the US passed the peak of its domestic oil production in 1970 and then suffered the indignity of the Arab Oil Embargo of 1973-4, policy wonks and advocacy groups alike have presented no shortage of sensible plans to start breaking America’s dependence on oil.
But every attempt to implement a rational energy policy has failed because because the major oil companies didn’t want America to start using less of their product. And everybody knows that Big Oil owns Washington.
The Tyranny of Oil: The World’s Most Powerful Industry–and What We Must Do to Stop It
By Antonia Juhasz
Harper Collins, 468pp, $15.99
We might imagine this thuggish industry answering in the style of movie gangster Little Caesar: “What’s that? You say don’t like it, punk? So what are you going to do? You and what army are going to say boo to ExxonMobil, Chevron and BP?”
The most powerful racket ever
The oil industry is the world’s most profitable — and America’s most powerful. And with peak oil, Big Oil is poised to grow even stronger.
With the multi-millions of dollars they spend every year to elect candidates, lobby Congress and federal agencies and spread their messages to the public through front groups like Americans for Prosperity, think tanks like the American Enterprise Institute and slick marketing campaigns claiming the oil companies are going green, the oil industry may seem harder to take down than a consortium of the Corleone family, the Triad Societies of Macau and the Medellin Cartel led by a triumvirate of Al Capone, Bond super-villain Ernst Stavro Blofeld and Tony Soprano.
But Antonia Juhasz thinks it can and must be done. She wants Americans to start fighting back against the oil industry’s control over the federal government. And while we’re at it, she wants us to challenge Big Oil’s control over the corner gas station and the refinery in the poor community down the road too.
And she thinks our best chance to win against Big Oil is to break them up, just like AT&T, or to take them down for corrupt practices, as the feds did with Enron.
Re-assembling Standard Oil
In the iconic case of corporate breakup from the trust-busting era of Theodore Roosevelt, in 1911 the Supreme Court found Standard Oil guilty of antitrust violations and ordered the company to be broken up. The federal government split John D. Rockefeller’s leviathan into 34 companies, including those that later became Exxon, Amoco, Mobil and Chevron.
In the tradition of Ida Tarbell’s expose of Rockefeller and his predatory business practices, Juhasz argues that oil companies have once again started to become as big and powerful as Standard Oil was before its breakup. Indeed, culminating in the merger of Exxon and Mobil, many of the former components of Standard have now re-connected, leaving the world with just half a dozen large independent oil companies.
Juhasz also argues that their massive size has enabled the new oil behemoths to become as dangerous to American democracy as the court found Rockefeller’s trust to be in 1911, particularly when it comes to squeezing out smaller competitors, strong arming their own retailers and running drilling operations and refineries that are dangerous to workers and to neighboring communities.
She also finds Big Oil to be behind Enron-style price fixing that Juhasz sees as a bigger factor in high prices at the pump than supply-and-demand. Though she does acknowledge peak oil, Juhasz is clearly more worked up about speculators and collusion, for which she makes a convincing case. Even if you think that peak oil will be the driving factor behind rising energy prices in the future, it’s easy to accept that in any short-term oil crunch, opportunists will find plenty of chances to squeeze the consumer.
The biggest bar to rational policy
As bad as retail price-fixing and drilling disasters are to drivers, local communities and the environment, if these were the only crimes of ExxonMobil, ConocoPhillips, Shell and the other oil majors, then Big Oil would be no worse than many other extractive industries.
But what makes Big Oil truly a dangerous force is the industry’s influence in Washington, which, more than any other factor, has blocked all attempts over the past thirty years to pass a comprehensive policy on the federal level to move America towards clean energy and conservation.
The US has become what Juhasz calls an
“oilgarchy”–a nation in which a small cadre of oil interests governs the most pressing decisions of our time. Consequently oil and gasoline prices are skyrocketing…But this is just the most obvious tip of a much larger iceberg. As oil becomes harder to find, more competitive to acquire, more expensive to produce, and more polluting to refine, we will be further pressed to decide just how far we are willing to go to get the last drops. Will our climate crisis be expanded? Will communities be destroyed? Will more wars be fought?
At the top of Juhasz’s plan to dislodge the oilgarchy is to get the Federal Trade Commission, using existing antitrust law, to break up the oil majors into smaller companies that would compete with each other and none of which would ever get large enough to put as much pressure on the federal government as the oil behemoths of today can exert.
Other ways to de-throne Big Oil would include electoral and campaign reform, along the lines of the “Separation of Oil and State” campaign run by Washington, DC-based Oil Change International, which notes that the oil industry gave $114 million in campaign contributions to Congress in the last decade, and that “the 111th Congress could be the dirtiest yet.”
Juhasz also urges cuts in federal subsidies to oil companies–which President Obama promised in his 2011 State of the Union speech last month. She also supports reviving industry regulation scrapped in the small government Reagan-era and even starting a national oil company like any number of government-run concerns from Norway to Saudi Arabia that would run drilling and production on federal lands in the public interest rather than for investor profits.
It’s the politics, stupid
The Tyranny of Oil hits the problem right on the head. No amount of sensible plans, such as the well-intentioned but politically naive plan recently published by the World Wildlife Fund for the world to run on 95% renewables by 2050, will make much difference as long as Big Oil runs Washington.
We don’t need more clean energy plans. We have enough of those already that just sit on the shelf. What we need are more plans to fight the power of Big Oil.
The environmental movement has already spent too much time painting rosy clean-energy scenarios and lusting after electric cars.
Instead, if green groups went all out into fighting dirty-energy politics, then perhaps America’s energy policy outlook would not be so bleak. The Sierra Club’s campaign against Koch Industries and Greenpeace’s zeppelin flight over a secret strategy meeting of big polluters hosted by the Koch brothers in January are a promising start.
Juhasz’s book is essential reading for anyone who wants to give the US, and indeed the world, a fighting chance to deal with climate change and peak oil while we still have time.
— Erik Curren