How the Environmental Movement Can Hit Big Oil Where It Counts

Monday, January 30, 2012

Last week I had the opportunity to hear environmental leader and 350.org founder Bill McKibben speak at a demonstration on Capitol Hill. The demonstration was organized in partnership with major environmental groups including Greenpeace, Natural Resources Defense Council and Sierra Club, who are flushed with victory after their 10,000-strong demonstration around the White House succeeded in pressuring the Obama administration to deny TransCanada Corp. a permit to build the much-coveted Keystone XL tar sands pipeline.

Speaking on the Hill, McKibben denounced legislators’ support for the pipeline and the influence of oil industry money in politics.

“People’s chief demand today was that Congress stop giving the fossil fuel industry gifts in the form of billions in useless subsidies just so politicians can cash in the favor for campaign contributions,” he stated.

350.org is among the groups that are building a campaign to end federal subsidies to the oil industry, which the Center for American Progress estimated at $4 billion annually.

While ending subsidies to a mature industry that arguably exerts far too much influence over our political system is a worthy goal, when considered relative to its quarterly profits alone – $35.1 billion in the second quarter of 2011, according to CAP – it is clear that it will take much more to slay this dragon.

The way to really hit Big Oil where it counts is to force it to compete in the transportation fuels market, where it currently maintains an effective monopoly and where it generates massive profits.

The Open Fuel Standard Act (H.R. 1687) is designed to do exactly that. By requiring vehicles produced in the U.S. to be capable of running on a mixture of gasoline and competitive renewable fuels such as methanol, the bill would stimulate private investment in clean fuels and refueling stations across the country. This would lead to a steady long-term decrease in oil consumption as more nascent technologies such as electric vehicles become more affordable for American consumers.

One sentiment that resonated with me while speaking with environmentalists last week was that a campaign against oil subsidies would represent a shift from defense to offense. To a movement that has been perpetually outmatched financially and is frequently fighting on its heels, I say use your people power to create business competitors for Big Oil and watch their political dominance decline along with their profits.

Doesn’t it feel good to play offense?

Thomas J. Buonomo is an Energy Policy Advocate for the Open Fuel Standard Coalition. He holds a Bachelor of Science in Political Science and Middle East Studies from the U.S. Air Force Academy and has spent the past six years researching U.S. energy and national security policy.

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Gambling on Iraq’s Oil

Monday, January 9, 2012

Iraqi Prime Minister Nouri al-Maliki’s recent efforts to arrest Iraqi Vice President Tariq al-Hashemi on terrorism charges have elevated the risk of renewed sectarian violence in the wake of the 18 December U.S. military withdrawal.

In response to the charges against the senior official, the largest Sunni political bloc has boycotted the parliament.

Adding to the tension, on 22 December, scores of Iraqis were killed in 16 bombings throughout Baghdad, most identified as targeting Shi’a neighborhoods.

While U.S. diplomats have scrambled to halt the breakdown, ranking Senate Armed Services Committee member John McCain and others have argued that the absence of U.S. military forces has made it more difficult to prevent simmering political tensions from boiling over into violent conflict.

CBS News reported on 9 January, “Al-Maliki’s arrest warrant against Sunni Vice President and longtime critic Tariq al-Hashemi for allegedly organizing assassinations leaves the country divided at the upper echelons of government. If the schism reaches down to street level, Iraq risks sliding back toward the civil-war like violence of 2006 and 2007.”

In this scenario, international oil companies, instrumental for rapidly bringing revenue into the Iraqi government’s coffers for reconstruction and economic development, might be forced to review their cost-benefit analysis absent the redeployment of U.S. military forces into Iraq.

Further complicating Iraq’s internal political dynamics are high unemployment, endemic corruption, a lack of transparency, and the widespread public perception that international oil companies have intentions to rob the country of its energy resources.

In 2011, Transparency International ranked Iraq as one of the most corrupt countries in the world in its Corruption Perceptions Index: 175 out of 183.

A lack of parliamentary oversight over oil negotiations and the secrecy of oil contract terms contribute to the perception of foreign exploitation or collusion between Iraqi political elites and their foreign partners.

Al Jazeera reported on 7 January that many Iraqis continue to believe that western oil companies are operating in Iraq in order to steal their country’s oil, according to an Iraqi Oil Ministry spokesman.

The obstacles to a stable investment climate are significant. While the United States should by no means abandon Iraq, it should strive to diversify away from the Middle East rather than become increasingly dependent upon it as a supplier of energy resources.

What You Can Do

The Open Fuel Standard Act, H.R. 1687, is designed to increase American self-reliance by stimulating private investment in alternative fuels that are cost-competitive with gasoline and can be domestically produced.

By introducing a flex-fuel vehicle standard, the legislation will provide investors with the incentive to introduce alternative fuel stations across the country and break the oil industry’s monopoly on the transportation fuels market. Competition will level the playing field and reduce the cost of all fuels available to consumers, including gasoline.

The barriers to investment are not technological or economic; they are political. This is where you come in.

First, read up on the bill and request news updates here. Next, take a look at the list of co-sponsors on the Open Fuel Standard website. If you don’t see your legislator’s name listed, contact their office and ask to speak with their staff member who is responsible for energy issues. Tell your friends and family to do the same and follow up periodically for updates from their staff.

Members of Congress, including most notably the Chairwoman of the House Foreign Affairs Committee, are acting in the interests of our national security by supporting free market solutions to our dependence on the Middle East. If you’re looking for a tangible way to support our troops, strengthen our national security, and stimulate job growth, contact your member of Congress and ask them to support this bill.

Thomas J. Buonomo is an Energy Policy Advocate for the Open Fuel Standard Coalition. He holds a Bachelor of Science in Political Science and Middle East Studies from the U.S. Air Force Academy and has spent the past six years researching U.S. energy policy toward the Middle East.

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The OFS Bill: What's in the Way?

Thursday, January 5, 2012

Many fans of the Open Fuel Standard Act are amazed that members of Congress are not enthusiastically jumping on the bandwagon in huge numbers. At a time when the U.S. could really use a lot of jobs, here's a bill that wouldn't cost anything, would generate jobs, and would put hundreds of billions of dollars into the American economy that are now going to countries actively working against America's interests. What's going on?

The following is a quote from the book, Sleeping With the Devil:

It wasn't long before the Saudis were spreading money everywhere, like manure on a winter's field. The White House put out its hand to fund pet projects that Congress wouldn't fund or couldn't afford, from a war in Afghanistan to one in Nicaragua. Every Washington think tank, from the supposedly nonpartisan Middle East Institute to the Meridian International Center, took Saudi money. Washington's boiler room — the K Street lobbyists, PR firms, and lawyers — lived off the stuff. So did its bluestocking charities, like the John F. Kennedy Center for the Performing Arts, the Children's National Medical Center, and every presidential library of the last thirty years. The Saudis even kicked in a quarter of a million dollars on a winter sports clinic for disabled American veterans.

Saudi money also seeped into the bureaucracy. Any Washington bureaucrat with a room-temperature IQ knows that if he stays on the right side of the kingdom, some way or another, he'll be able to finagle his way to feed at the Saudi trough. A consulting contract with Aramco, a chair at the American University, a job with Lockheed — it doesn't matter. There's hardly a living former assistant secretary of state for the Near East; CIA director; White House staffer, or member of Congress who hasn't ended up on the Saudi payroll in one way or another, or so it sometimes seems. With this kind of money waiting out there, of course Washington's bureaucrats don't have the backbone to take on Saudi Arabia.

What's going on here? The way I look at things, it amounts to an indirect, extralegal tax on Americans. Saudi Arabia raises the price of gasoline, then remits a huge percentage to Washington, but not just to anyone. A big chunk goes to pet White House projects; part goes into the pockets of ex-bureaucrats and politicos who keep their mouths shut about the kingdom. And a lot goes to keeping our defense industry humming in bad times. Add it all up, and Saudi Arabia is one of Washington's biggest hitters.

Washington likes to describe all this with an inoffensive, neutral economic term: recycling petrodollars. But it's plain old influence peddling.

Sleeping With the Devil: was authored by Robert Baer, a former case officer in the Directorate of Operations for the CIA from 1976 to 1997. His overseas assignments included stints in Iraq, Dushanbe, Rabat, Paris, Beirut, Khartoum, and New Delhi. He speaks Arabic, Farsi, French, German, and English. He has handled agents who infiltrated Hizballah, Fatah-Hawari, and Al-Qaeda.

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