Addicted To Oil Profits
By Nicole Colson
09 February, 2006
Socialistworker.org
In his State of the Union address, George W. Bush said America was “addicted to oil.” The U.S., Bush said, must reduce its dependence on Middle East oil imports by developing “cleaner, cheaper and more reliable alternative energy sources.”
But Bush neglected to mention the real “addiction” that drives the production and consumption of oil in the U.S. and around the globe--the addiction of the oil companies to making huge sums of money.
Last year was the most profitable in history for the oil industry. For 2005, ExxonMobil had gross revenues of $371 billion, a 20 percent increase over 2004. In terms of profits, the company topped out at $36.1 billion for the year--a 43 percent jump from the previous year. This was the largest annual reported profit in corporate history, amounting to more than $4.1 million raked in for every hour in 2005.
According to CIA statistics, ExxonMobil’s revenues last year exceeded the Gross Domestic Product of Saudi Arabia ($340.5 billion), and its profits were higher than the GDP of El Salvador ($33.9 billion). Exxon’s super-profits alone were larger than the economies of more than half of the countries and territories of the world.
The other oil giants did well last year, too. In early February, Royal Dutch Shell announced net profits of $22.9 billion for 2005--up 30 percent from 2004 and the highest full-year profit figure in British history. As Socialist Worker went to press, oil giant BP was expected to announce its own inflated profits for 2005.
You won’t find anyone in the oil industry or the Bush administration admitting that these grossly inflated profits are a problem at all. In fact, the day after his State of the Union speech, Bush defended ExxonMobil. “I think that basically the price is determined by the marketplace, and that’s the way it should be,” Bush told an Associated Press reporter.
But while big oil companies rake in the money, ordinary people are the ones left paying the price--literally. In early 2003, drivers spent an average of 4.9 percent of their incomes on gas, according to Bureau of Labor Statistics figures. By July 2005, that average had risen to nearly 7.3 percent.
Four years ago, during the winter of 2001-2002, home heating oil cost $1.16 per gallon. This winter, the U.S. Energy Information Administration predicts it will top out at $2.22 per gallon--almost double.
Nevertheless, in November, Congress rejected a proposal to increase spending for the federal Low-Income Home Energy Assistance program from its modest $2.2 billion to about $5 billion.
For people like Linda Kelly, a Quincy, Mass., mother of three, the rising prices and lack of assistance have meant disaster. Kelly told MSNBC last month that between higher heating costs and a doubling of the co-payments on her family’s prescription drug coverage, it’s been nearly impossible to keep up this winter.
Kelly suffers from multiple sclerosis, and one of her daughters is diabetic. The choice she’s been forced to make? “Maybe [my daughter] won’t test [her blood sugar levels] as often as she should using the strips,” she said. “Maybe I’ll go an extra day, miss one pill during the week. You do what you can.”
For the entire winter, the Kelly family received just $525 in home heating oil assistance from the government--less than the cost of filling even one tank.
Ordinary people are paying the price of the oil company’s profit addiction in other ways as well--in the form of damage to their communities, health and the environment.
Bush couldn’t even bring himself to mention the phrase “global warming” in his speech--even though scientists, with the exception of a few bought by the oil industry, are agreed that emissions of fossil fuels like oil are causing increases in global temperatures that are already having an impact on the environment.
Nevertheless, just a day after the State of the Union, Bush administration officials were assuring the energy industry that Bush didn’t mean it “literally” when he called for a 75 percent reduction of U.S. oil imports from the Middle East by 2025. According to Energy Secretary Samuel Bodman, Bush’s statement was “purely an example.”
And while Bush plugged the development of certain “alternative energy sources,” overall, his speech was notable for what was left out.
As Public Citizen’s Tyson Slocum pointed out, “Bush didn’t talk about scaling back demand at all; we need to greatly expand our public transportation systems. He talked about hydrogen, but he used the same rhetoric in 2003. The plans for hydrogen fuel actually involve it coming from coal-fired power plants. This means using a high-pollution process to create ‘clean’ energy. Bush made no mention of the comprehensive energy bill he recently signed. That makes sense; the lobbyists went wild with it. The oil companies got $5 billion, $8 billion for coal, $12 billion for nuclear and only $3 billion for renewables.”
In fact, the “Advanced Energy Initiative” that Bush claimed would promote alternatives to oil would, if cleared by Congress, boost spending by the Department of Energy by only $300 million by 2007--about what the U.S. is currently spending every two days on the war in Iraq.
According to Bush, the program would push “zero-emission coal-fired plants,” “solar and wind technologies,” and “clean, safe nuclear energy.” But environmental experts say that “clean” coal and “safe” nuclear power are contradictions in terms.
Meanwhile, behind the scenes, the Bush administration is in the process of cutting back research into renewable energy. As the New York Times recently reported, the Energy Department this month expects to begin laying off researchers and staff at the National Renewable Energy Laboratory--because of a 15 percent budget cut pushed through last year. One department veteran told the Times that staff had been told the cuts would be concentrated among researchers in wind and biomass--two of the technologies Bush cited in his State of the Union speech.
As Washington Post business columnist Steven Pearlstein commented, “[D]oes anyone really believe that a president and vice president who became wealthy from their association with the oil and gas industry, who never failed to tout the industry line and who presided over the biggest transfer of wealth from consumers to industry in the history of mankind--that these same leaders will move us beyond a ‘petroleum-based economy’ to one based on ‘wood chips, stalks or switch grass?’”
Threatened for telling the truth
IN AN administration with such close ties to the oil industry that it famously let corporate executives write its energy policies, global warming is something that’s not talked about. And the administration will punish those who do.
James Hansen, NASA’s top climate scientist and director of the Goddard Institute for Space Studies, says that since he gave a speech in December calling for immediate reductions in greenhouse gas emissions, the Bush administration has attempted to stop him from speaking out.
In the talk, Hansen pointed out that 2005 was likely the warmest year in at least a century, and that significant emission cuts could be achieved with existing technologies, particularly in the case of cars.
But that was too radical for the Bush administration. According to Hansen, following his speech, officials at NASA headquarters ordered the agency’s public affairs staff to review his coming lectures, papers, Web postings and requests for interviews from journalists. Hansen said he was told that there would be “dire consequences” if he continued to make such statements.
In one instance, George Deutsch, a recently appointed public affairs officer at NASA headquarters, rejected a request from a producer at National Public Radio to interview Hansen, called NPR “the most liberal” media outlet in the country, and reportedly said that his job was “to make the president look good.”
