It’s a very exciting time in the world of oil geopolitics, if you’re a fan of juvenile saber-rattling in the service of making billionaires even richer:
The fracking boom has driven US output to the highest in three decades, contributing to a global surplus that Venezuela has estimated at 2 million barrels a day. That’s equal to or more than the production of six OPEC members…
Conventional oil producers in OPEC can no longer dictate prices, United Arab Emirates Energy Minister Suhail Al-Mazrouei said in an interview in Vienna this week. Newcomers to the market who have the highest costs and created the glut should be the ones to determine the price, he said.
“That is what OPEC is hoping for,” said Carsten Fritsch, a commodity analyst at Commerzbank in Frankfurt. “It’s the question of who will blink first.”
OPEC will feel pressure too, with prices now below the level needed by nine member states to balance their budgets.
The United States has been making it a matter of public policy to poison its own groundwater and stress its fault lines by fracking, steaming and acidizing for oil. This is partly in order to enrich its own oil magnates, and partly to stick its thumb in the eye of Russia, Venezuela and OPEC. The Hillary Clinton-led state department has only been too happy to strongly encourage shale gas fracking in Europe in order to frustrate Russian ambitions as well.
So OPEC has been flooding the world with cheap oil partly out of revenge, partly in a regional power play against Iran and others, and partly to disincentivize Western fracking by making it economically unfeasible.
It’s all good fun, and I’m sure the players feel like they’re doing great work to advance the interests of their “good people” against all those other “bad people” in those nasty other countries.
Of course, what almost no one is paying attention to in the middle of all this is the impact on climate change and the planet. We now know beyond a doubt that if all of this new shale oil comes out of the ground and gets burned into the atmosphere as CO2, the world’s youngest inhabitants may not have many habitable places left to live by their retirement age.
But that’s not so important compared to frustrating the economic ambitions of that rival nation-state, right?
By: David Atkins, Political Animal, The Washington Monthly, November 29, 2014
“Selfless Libertarian Activist?”: Charles Koch Personally Founded Group Protecting Oil Industry Hand-Outs, Documents Reveal
“Lifestyles of the Rich Environmentalists,” produced by a group called the Institute for Energy Research, is a slick web video campaign designed to lampoon Leonardo DiCaprio and will.i.am as hypocrites for supporting action on climate change. The claim is that wealthy celebrities who oppose industrial-scale pollution supposedly shouldn’t fly in airplanes that use fossil fuels. The group, along with its subsidiary, the American Energy Alliance, churns out a steady stream of related content, from Facebook memes criticizing the Environmental Protection Agency, to commercials demanding approval of new oil projects like the Keystone XL, to a series of television campaign advertisements this year attacking Democratic candidates in West Virginia, Colorado, North Carolina and Alaska. On Capitol Hill, IER aggressively opposes any effort to repeal tax breaks afforded to the oil and gas industry.
Documents obtained by Republic Report reveal for the first time that the group was actually founded by none other than Charles Koch, the petrochemical, manufacturing, and oil-refining tycoon worth an estimated $52 billion.
IER has no information about its founding members on its website, and only lists a board composed of seemingly independent conservative scholars and businessmen. Earlier reports revealed that IER/AEA has received grants from Koch-funded foundations, and its leadership includes several individuals who have at times worked for Koch or Koch-related interests. But this is the first time it has been revealed that Charles personally founded the organization.
In October of 1984, Charles, then using a Menlo Park, California address, founded a non-profit called the Institute for Humane Studies of Texas. That organization briefly lost its charter in 1989 for failure to pay the Texas state franchise tax. Four years later, incorporation documents reveal, the group rebranded as the Institute for Energy Research, or IER, which later formed a subsidiary called the American Energy Alliance.
IER/AEA’s advocacy contrasts sharply with Charles’ personal brand as a selfless libertarian activist. The industrialist has argued that he is resolutely against special government handouts, such as tax credits or subsidies that benefit one industry over another. “Far from trying to rig the system, I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs—even when we benefit from them,” Charles wrote in a column for The Wall Street Journal this year.
But Charles’ group, IER/AEA, has fought to protect special tax breaks that benefit fossil fuel producers. Along with issuing press releases against various federal efforts to eliminate oil and gas industry tax credits, IER/AEA commissioned a study claiming that such tax reforms would have an adverse effect on jobs and on oil production.
Charles and his brother David are personally responsible for founding and funding much of the modern conservative infrastructure. The popular libertarian think tank, the Cato Institute, was in fact first named the Charles Koch Foundation, Inc before rebranding. The largest political organization in America outside the Democratic and Republican parties is Americans for Prosperity, the Tea Party-organizing foundation also founded by the Kochs.
The latest organs in the Koch political network have carefully guarded the sources of their funding and direction. There is the new youth group, Generation Opportunity, along with the new veterans-related campaign organization, Concerned Veterans for America. But IER/AEA’s true origin casts new light on its motivations.
By: Lee Fang, Public Report, September 3, 2014
In the latest Times Magazine, Robert Draper profiled youngish libertarians — roughly speaking, people who combine free-market economics with permissive social views — and asked whether we might be heading for a “libertarian moment.” Well, probably not. Polling suggests that young Americans tend, if anything, to be more supportive of the case for a bigger government than their elders. But I’d like to ask a different question: Is libertarian economics at all realistic?
The answer is no. And the reason can be summed up in one word: phosphorus.
As you’ve probably heard, the City of Toledo recently warned its residents not to drink the water. Why? Contamination from toxic algae blooms in Lake Erie, largely caused by the runoff of phosphorus from farms.
When I read about that, it rang a bell. Last week many Republican heavy hitters spoke at a conference sponsored by the blog Red State — and I remembered an antigovernment rant a few years back from Erick Erickson, the blog’s founder. Mr. Erickson suggested that oppressive government regulation had reached the point where citizens might want to “march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp.” And the source of his rage? A ban on phosphates in dishwasher detergent. After all, why would government officials want to do such a thing?
An aside: The states bordering Lake Erie banned or sharply limited phosphates in detergent long ago, temporarily bringing the lake back from the brink. But farming has so far evaded effective controls, so the lake is dying again, and it will take more government intervention to save it.
The point is that before you rage against unwarranted government interference in your life, you might want to ask why the government is interfering. Often — not always, of course, but far more often than the free-market faithful would have you believe — there is, in fact, a good reason for the government to get involved. Pollution controls are the simplest example, but not unique.
Smart libertarians have always realized that there are problems free markets alone can’t solve — but their alternatives to government tend to be implausible. For example, Milton Friedman famously called for the abolition of the Food and Drug Administration. But in that case, how would consumers know whether their food and drugs were safe? His answer was to rely on tort law. Corporations, he claimed, would have the incentive not to poison people because of the threat of lawsuits.
So, do you believe that would be enough? Really? And, of course, people who denounce big government also tend to call for tort reform and attack trial lawyers.
More commonly, self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is. We’re living in an Ayn Rand novel, they insist. (No, we aren’t.) We have more than a hundred different welfare programs, they tell us, which are wasting vast sums on bureaucracy rather than helping the poor. (No, we don’t, and no, they aren’t.)
I’m often struck, incidentally, by the way antigovernment clichés can trump everyday experience. Talk about the role of government, and you invariably have people saying things along the lines of, “Do you want everything run like the D.M.V.?” Experience varies — but my encounters with New Jersey’s Motor Vehicle Commission have generally been fairly good (better than dealing with insurance or cable companies), and I’m sure many libertarians would, if they were honest, admit that their own D.M.V. dealings weren’t too bad. But they go for the legend, not the fact.
Libertarians also tend to engage in projection. They don’t want to believe that there are problems whose solution requires government action, so they tend to assume that others similarly engage in motivated reasoning to serve their political agenda — that anyone who worries about, say, environmental issues is engaged in scare tactics to further a big-government agenda. Paul Ryan, the chairman of the House Budget Committee, doesn’t just think we’re living out the plot of “Atlas Shrugged”; he asserts that all the fuss over climate change is just “an excuse to grow government.”
As I said at the beginning, you shouldn’t believe talk of a rising libertarian tide; despite America’s growing social liberalism, real power on the right still rests with the traditional alliance between plutocrats and preachers. But libertarian visions of an unregulated economy do play a significant role in political debate, so it’s important to understand that these visions are mirages. Of course some government interventions are unnecessary and unwise. But the idea that we have a vastly bigger and more intrusive government than we need is a foolish fantasy.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 10, 2014
“The Real Crises On Their Doorsteps”: Will The Green Goop In Toledo’s Water Be The End Of GOP Anti-Environmentalism?
It’s easy to doubt the effects of climate change – especially if you’re a Republican or a dedicated Fox News watcher. It’s an abstract concept easily “disproven” by the first cold day, and Republican-driven policies (or the lack thereof) to address it reflect just that. But it’s more difficult to deny the causes of smelly green goop washing up on a lakeshore or sticking to your toes.
But the toxic algae bloom in Lake Erie that caused 400,000 Toledo residents to avoid municipal water for two days provides an opportunity for conservatives to illustrate the ease with which they could co-opt the environment movement to push for local control, market solutions and individual choice – and start dealing with the very real crises on their doorsteps.
To that end, Ohio’s Republican governor – and pro-fracking enemy to the state’s environmentalists – John Kasich already signed legislation to address the algal blooms producing the toxins in Lake Erie earlier this year. That was too late, of course, and it might also be too little: it’s a voluntary program to certify farmers who use the phosphorous fertilizers that cause the blooms, and it won’t take effect untl 2017.
But even signing the legislation puts Kasich on the “Al Gore” side of the environmentalist spectrum to others in the GOP. In Washington state, Republican state house members argued that there was no science “that proves fertilizers have any impact on water quality”. In Wisconsin, Governor Scott Walker “eased” the deadlines for polluters in the state to meet the previous administration’s numerical standards for the amount of phosphorous allowed in public waters (he tried to replace the numeric standards with a “narrative description” of reduction efforts, but wasn’t successful). In Tea Partying Florida, the Republican state legislature sought to overturn locally-enacted bans on phosphorus fertilizer – an effort pushed by a Scotts Miracle-Gro lobbyist who texted a representative, “I am begging for your help here.”
Meanwhile, dozens of communities and 12 states have banned phosphorous fertilizers – and some even ban phosphorous in detergent, too. These laws don’t just spring up in Birkenstock Nation capitals such as Vermont or Ann Arbor, Michigan: Virginia banned phosphorous fertilizers in 2011 under the watchful eye of Republican governor Bob McDonnell, and New Jersey governor Chris Christie enacted the nation’s strictest regulations on the use of the chemical with trademark defiance and sentimentality in 2012. Christie explained:
We understand that the beauty of the body of water that we have here in New Jersey is much more important to our psychic health and our economic health than any of the arguments being made by the other side.
Research from 2009 shows that the results of fertilizer bans are clear: one of the oldest bans in the country – in Michigan – was linked to 28% reduction in phosphorus in downstream waters.
We shouldn’t be too surprised by some GOP flexibility on this aspect of environmental regulation: it’s mayors and governors who wind up having to deal with environmental crises on the ground and in real time – and who ultimately cannot afford ideological purity at the cost of their communities (though it may cost them higher office).
For them, GOP disdain for executive power stops at the Beltway’s edge; they cannot afford the luxury of speeches and stunts when their constituents go thirsty or can’t take baths.
Environmental crises are usually trotted out as case studies in the limits of conservative governance: they are systemic problems, requiring broad, coordinated action and strict penalties in place to dramatize the cost of continued malfeasance (since the real costs are all too broad to force individuals to take action). Coal seems like “cheap” energy … until you calculate the associated health and environmental costs after its use; avoiding chemical fertilizers seems expensive until you compare it with the cost of cleaning up after them.
The situation in Ohio has brought home how short the timeline of deferred costs can become, and it should: phosphorus fertilizers aren’t like oil wells or fracking fields, because consumers can make a direct choice in using them or not. Specific sites such as waste management plants (so-called point sources) aren’t even the primary sources for phosphorous pollutants in public waters like Lake Erie; rather, much of the pollution in the water is the result of run-off from developed land (non-point sources).
And algal blooms aren’t like climate change – though, importantly, they’re exacerbated by it: they are near-term and ugly, comparatively immediate consequences of definable actions that everyday citizens can see without a microscope or binoculars. They are inarguable.
In Ohio, the urgency to take action on the algal blooms can only be enhanced by the recognition that doing so makes economic sense – and will keep harsher regulations at bay. Phosphorus bans even make a certain economic sense: The EPA estimates that “nutrient pollution” costs the US $1bn a year in lost revenue from outdoor tourism and waterway recreation.
The problem with getting consensus on environmental policy is not, primarily, that Democrats want to continue expanding the leviathan of big government and Republicans are seeking local solutions – it’s that many conservatives refuse beyond all reason to acknowledge that there is a problem to be solved at all.
Maybe a glass of goop can change that.
By: Ana Marie Cox, The Guardian, August 5, 2014
For Chevron, the second-largest oil company in the country with $26.2 billion in annual profits, it helps to have friends in high places. With little fanfare, one of Chevron’s top lobbyists, Stephen Sayle, has become a senior staff member of the House Committee on Science, the standing congressional committee charged with “maintaining our scientific and technical leadership in the world.”
Throughout much of 2013, Sayle was the chief executive officer of Dow Lohnes Government Strategies, a lobbying firm retained by Chevron to influence Congress. For fees that total $320,000 a year, Sayle and his team lobbied on a range of energy-related issues, including implementation of EPA rules under the Clean Air Act, regulation of ozone standards, as well as “Congressional and agency oversight related to offshore oil, natural gas development and oil spills.”
Sayle’s ethics disclosure, obtained by Republic Report, shows that he was paid $500,000 by Chevron’s lobbying firm before taking his current gig atop the Science Committee.
In recent months, the House Science Committee has become a cudgel for the oil industry, issuing subpoenas and holding hearings to demonize efforts to improve the environment. Some of the work by the committee reflect the lobbying priorities of Chevron.
In December, the Science Committee, now chaired by Representative Lamar Smith (R-TX), held yet another hearing to try to discredit manmade global warming. In August, the committee issued the first subpoena in twenty-one years, demanding “all the raw data from a number of federally funded studies linking air pollution to disease.”
Though Chevron has gone to great lengths to advertise a lofty environmental record, the company continues to break air pollution laws while quietly backpedalling on its prior commitments to renewable energy. A Bloomberg News investigation reported that Chevron estimated that its biofuel investments would return only 5 percent in profits, a far cry from the 15 percent to which the oil giant is accustomed, and quietly moved to shelve renewable fuel units of the company. In California, Chevron is battling the newly created cap-and-trade system for carbon pollution. And in states across the country, Chevron has lobbied and provided financial support to a range of right-wing nonprofits dedicated to repealing carbon-cutting regulations, including the low-carbon fuel standard.
Earlier this year, Dow Lohnes’ lobbying practice merged with Levick, a public affairs firm.
By: Lee Fang, The Nation, February 21, 2014: This post was originally published at RepublicReport.org