King CONG Flexes Its Muscles: The Dominance of Energy Corps


In Mother Jones this month, Harvey Wasserman warns against assuming that Cheney’s pork-fed scandal of an energy bill, written entirely by the Coal-Oil-Nuclear-Gas (CONG) industries and their lobbyists, has been safely defeated. It hasn’t.

Two months ago, Senate Democrats – supported by seven Republicans — barely beat back a Bush Administration-backed national energy plan. The proposal was a fossil/nuke grab-bag, bloated by $20-30 billion in subsidies, tax breaks and other giveaways for some of the nation’s biggest polluters.*****************************

The Bush energy plan that failed in December was an unvarnished partisan play. Drafted in secret by Vice President Dick Cheney’s infamous task force, it was fine-tuned in secret by Sen. Pete Domenici and Rep. Billy Tauzin — two of King CONG’s most ardent Capitol Hill guerillas. The resulting pork-laden legislation and the steamroller approach offended scores of lawmakers, and prompted scathing editorials nationwide. But in the Senate, the final straw was a rider providing a legal shield for makers of MTBE, a gasoline additive that’s a suspected carcinogen (both Tauzin and House Majority Leader Tom DeLay have big MTBE producers in their districts). Some have opined, reassuringly, that the Bush/Cheney/Tauzin/Domenici CONG nightmare is dead – that it could never pass in an election year. Unlikely. Bush now says he’s shooting for a mid-February passage.

It’s coming back, pushed by the same interests responsible for its creation and the same Pubs who tried to shove it through the first time, only this time the fragile coalition that narrowly defeated it is showing cracks and King CONG is moving in to exploit them. They’re not going to let go–there’s too much at stake. And the Bush WH is so larded with ex-industry execs and lobbyists that it’s sometimes hard to tell where the industry leaves off and govt begins. Maybe it doesn’t.

Two examples from MJ’s Informed Dissent newsletter suggest pretty strongly that the Bush Admin is functioning as little more than a King CONG subsidiary. In a host of uncertain ventures, the BA–at the direct behest of King CONG–is arranging for the US taxpayers, you and me, to put up the money both the banks and the corporations themselves are afraid to risk.

Baku, the capital of Azerbaijan on the shores of the oil-rich Caspian Sea, is point-of-origin for a 1000-mile-long oil pipeline that will be blasted through the mountains of Georgia and Turkey. Its purpose is to provide 1M barrels of oil a day, “a gusher of profits to the consortium of 10 companies headed by British Petroleum that is developing the project.” But here’s the rub:

[R]egional conflicts and uncertain production make the $3.5 billion pipeline so risky that the oil executives who devised the venture don’t want to pay for it — and the commercial banks they normally deal with don’t want to lend them the money. So the oil companies are turning to another big lender for help: Uncle Sam. The U.S. government, which helped broker the pipeline deal and has paid for engineering studies in Azerbaijan, is expected to provide as much as $500 million this year to help finance the project, supplying some of the world’s wealthiest companies with what British Petroleum CEO John Browne calls “free public money.”

Reporter Daphne Eviatar makes it clear that this is hardly the only such project being subsidized by American taxpayers; the Cheney energy bill contains a number of them.

***$350Mil for an American energy company called Unocal to develop an oil-and-gas field in Indonesia

***$116Mil to Marathon Oil and Royal Dutch/Shell for an oil field in Russia

***$135Mil to a subsidiary of Halliburton to expand a natural gas facility in Nigeria

And that’s only a partial list. The money is provided mainly by two US Agencies: OPIC (the Overseas Private Investment Corp) and the Export-Import Bank, known as Ex-Im. In theory, the money was provided by the Congress to increase trade and create jobs, but in fact the bulk of the financing is going to King CONG corps that do neither.

[This] public financing is doing little to achieve its stated goal of creating jobs. Since 2000, the two largest oil companies subsidized by Ex-Im — ExxonMobil and ChevronTexaco — have actually slashed their workforces by more than 20,000. Oil and gas companies that apply for financing are not required to submit any information on the economic impact of their projects, and many of the documents they do provide are kept secret even from those charged with monitoring the agencies. “We don’t have a lot of confidence in the process,” says Thea Lee, the AFL-CIO’s chief international economist, who sits on an Ex-Im advisory committee. “There’s simply no way to know whether it’s helping support U.S. jobs.”

Meanwhile, reports of corruption and massive environmental damage tied to these projects that we are paying for surround them like maggots on decaying meat:

Overseas, the loans contain no safeguards against corruption or human rights abuses, and applicants do not have to meet even the minimal environmental standards mandated by the World Bank. The Unocal project in Indonesia has polluted rice fields and fishing waters; when residents held a protest in October 2000, state security forces shot and beat nearly two dozen demonstrators. In Cameroon, where ExxonMobil has received $500 million in U.S. financing for a pipeline, international observers say the project has destroyed rainforest and fueled a public health crisis. And in Russia, environmentalists warn that oil projects off Sakhalin Island threaten 11 endangered species, including the Western Pacific gray whale.In Azerbaijan, where the U.S.-backed pipeline broke ground in September, the CIA reports that “corruption is ubiquitous.” Few observers expect the project to help the nearly two-thirds of Azeris who live in poverty. “People are afraid the pipeline won’t benefit them,” says Farda Asadov, director of the Open Society Institute’s office in Azerbaijan.

They’re right–it won’t. It isn’t about creating jobs for them, it’s about putting the risks of development capital on somebody else while King CONG takes the profits for themselves at the same time they’re cutting jobs. And if Azerbaijani land and water gets polluted along the way because poluuting is cheaper than not polluting, tough luck–the King CONG execs don’t have to live there.

The rampant cynicism of blatantly appropriating govt funds intended to create jobs and turning them into nothing more than a hidden form of corporate welfare is outdone by the breath-taking hypocrisy of trumpeting a project in public whose whole rationale is to undercut our reliance on fossil fuels while privately insuring that this “alternative energy initiative” will in fact maintain our reliance on fossil fuels. You think I’m kidding? Barry Lynn lays it out:

When President Bush unveiled his plans for a hydrogen-powered car in his State of the Union address in January, he proposed $1.2 billion in spending to develop a revolutionary automobile that will be “pollution-free.” The new vehicle, he declared, will rely on “a simple chemical reaction between hydrogen and oxygen” to power a car “producing only water, not exhaust fumes.” Within 20 years, the president vowed, fuel-cell cars will “make our air significantly cleaner, and our country much less dependent on foreign sources of oil.”By launching an ambitious program to develop what he calls the “Freedom Car,” Bush seemed determined to realize the kind of future that hydrogen-car supporters have envisioned for years. Using existing technology, hydrogen can be easily and cleanly extracted from water. Electricity generated by solar panels and wind turbines is used to split the water’s hydrogen atoms from its oxygen atoms. The hydrogen is then recombined with oxygen in fuel cells, where it releases electrons that drive an electric motor in a car. What Bush didn’t reveal in his nationwide address, however, is that his administration has been working quietly to ensure that the system used to produce hydrogen will be as fossil fuel-dependent — and potentially as dirty — as the one that fuels today’s SUVs. According to the administration’s National Hydrogen Energy Roadmap, drafted last year in concert with the energy industry, up to 90 percent of all hydrogen will be refined from oil, natural gas, and other fossil fuels — in a process using energy generated by burning oil, coal, and natural gas. The remaining 10 percent will be cracked from water using nuclear energy.

So, after years of attempts to block, buy out, or otherwise destroy the potential of alternative energy sources, King CONG has finally found a way to have its cake and eat it, too: it will take (or let its political puppet take) credit for developing a pollution-free alternative to dirty gas-combustion engines while using its muscle to ram through laws that will tie the creation of a clean fuel to their unimaginably dirty fuel for the indefinite future. Neat, huh? And the BA was a big help.

Mike Nicklas, chair of the American Solar Energy Society, was one of 224 energy experts invited by the Department of Energy to develop the government’s Roadmap last spring. The sessions, environmentalists quickly discovered, were dominated by representatives from the oil, coal, and nuclear industries. “All the emphasis was on how the process would benefit traditional energy industries,” recalls Nicklas, who sat on a committee chaired by an executive from ChevronTexaco. “The whole meeting had been staged to get a particular result, which was a plan to extract hydrogen from fossil fuels and not from renewables.” The plan does not call for a single ounce of hydrogen to come from power generated by the sun or the wind, concluding that such technologies “need further development for hydrogen production to be more cost competitive.”But instead of investing in developing those sources, the budget that Bush submitted to Congress pays scant attention to renewable methods of producing hydrogen. More than half of all hydrogen funding is earmarked for automakers and the energy industry. Under the president’s plan, more than $22 million of hydrogen research for 2004 will be devoted to coal, nuclear power, and natural gas, compared with $17 million for renewable sources. Overall funding for renewable research and energy conservation, meanwhile, will be slashed by more than $86 million. “Cutting R&D for renewable sources and replacing them with fossil and nuclear doesn’t make for a sustainable approach,” says Jason Mark, director of the clean vehicles program for the Union of Concerned Scientists.

That may be the understatement of the year. What used to be a genuine effort to find a real alternative to destructive fossil fuels has been subverted by King CONG into little more than another fraud perpetrated on consumers.

To protect its fuel franchise, the energy industry has moved swiftly in recent years to shape government policy toward hydrogen. In 1999, oil companies and automakers began attending the meetings of an obscure group called the National Hydrogen Association. Founded in 1989 by scientists from government labs and universities, the association was a haven for many of the small companies — fuel-cell designers, electrolyzer makers — that were dabbling in hydrogen power. The group promoted the use of hydrogen but was careful not to take any position on who would make the fuel or how.All that changed once the energy industry got involved. “All of a sudden Shell joined our board, and then the interest grew very quickly,” says Karen Miller, the association’s vice president. “Our chair last year was from BP; this year our chair is from ChevronTexaco.” The companies quickly began to use the association as a platform to lobby for more federal funding for research, and to push the government to emphasize fossil fuels in the national energy plan for hydrogen. Along with the big automakers, energy companies also formed a consortium called the International Hydrogen Infrastructure Group to monitor federal officials charged with developing fuel cells. “Basically,” says Neil Rossmeissl, a hydrogen standards expert at the Department of Energy, “what they do is look over our shoulder at doe to make sure we are doing what they think is the right thing.”

As hydrogen gained momentum, the oil companies rushed to buy up interests in technology companies developing ways to refine and store the new fuel. Texaco has invested $82 million in a firm called Energy Conversion Devices, and Shell now owns half of Hydrogen Source. BP, Chevron-Texaco, ExxonMobil, Ford, and General Electric have also locked up the services of many of America’s top energy scientists, devoting more than $270 million to hydrogen research at MIT, Princeton, and Stanford.

Not to promote clean energy, mind you, but to protect their own interests by making sure it isn’t too clean. Ever.

Lest you mistakenly believe that there are limits to King CONG’s corporate greed, I will leave you with this from Tom Engelhardt (link on sidebar):

In a briefing NASA administrator Sean O’Keefe quickly reassured reporters that Bush’s “exploration program” [to the moon and Mars–m] would be “industry-driven.” And who wouldn’t claim that industry is driven? The space exploration program seems, by the way, to have emerged at least in part from our vice president’s office, where the swinging door has Halliburton written all over it. And even if none of this pans out in anybody’s lifetime, in a week in which Halliburton agreed to pay back $6.3 million in overcharges for its Iraq operations without even scratching the surface of things, imagine the overcharges in space. I mean, there’s no limit in space, is there?And let’s not forget the helium 3 isotope, supposedly to be found in abundance on the moon. Jim Wolf of Reuters (U.S. Eyes Space as Possible Battleground) wrote of it as “a near perfect fuel source: potent, nonpolluting and causing virtually no radioactive byproduct in a fusion reactor. ‘And if we could get a monopoly on that, we wouldn’t have to worry about the Saudis and we could basically tell everybody what the price of energy was going to be,’ said [John] Pike [of Globalsecurity.org].”

Interestingly in regard to that small cast of characters, Wolf writes:

“Among companies that could cash in on Bush’s space plans are Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp., which do big business with the National Aeronautics and Space Administration as well as with the Pentagon.”

All this and yet, as Dr. Seuss might have written, oh no, that is not all; oh no, that is not all. Wolf adds:

“President Bush’s plan to expand the exploration of space parallels U.S. efforts to control the heavens for military, economic and strategic gain. Defense Secretary Donald Rumsfeld long has pushed for technology that could be used to attack or defend orbiting satellites as well as a costly program, heavily reliant on space-based sensors, to thwart incoming warheads.”

Ah, Donald Rumsfeld. Michelle Ciarrocca of the World Policy Institute in “Bush’s Space Odyssey,” a piece included below, discusses just how long our Secretary of Defense has been eyeing the military (and industrial) control of space, while warning of future “space Pearl Harbors.” As she points out, “the military has long eyed the moon as a potential base of operations as warfare is moved into the heavens.” (Those of you who go to the new Errol Morris film, The Fog of War, will hear a little anecdote by former Defense Secretary Robert McNamara about how the Joint Chiefs tried to scuttle a bit of arms control by claiming, in a blame-it-on-the-neighbors moment — this was the wild-eyed 1960s, of course — that the Russians might avoid scrutiny by secretly testing atomic weapons on the other side of the moon.)

Ciarocca points out that the normal cast of characters was well represented on Rumsfeld’s “Space Commission” of 2001 and that the new presidential commission to be formed soon to consider the President’s space goals will be headed by Edward C. “Pete” Aldridge Jr., former Air Force secretary and presently on the board of… you guessed it, Lockheed Martin.

Even if you don’t take all this too seriously, it certainly reveals a good deal about the kinds of dreams that are deeply lodged in the Bush administration’s overheated brain trust. For them, space exploration is evidently the final fantasy, the Iraq that should have been: Industry-driven; backed by government; involving a few large corporations; no guerrillas anywhere in sight; totally “privatized”; and, at the end of the “rainbow,” energy sources beyond anyone’s wildest imaginings, and all ours. Or maybe I’m wrong and this was all preparation work for the next Star Trek movie, Space, The Final Dollar Frontier or the Wrath of Vice-President Khan.

Let’s hope so. If there are limits to King CONG’s ambitions, they don’t appear to be terrestrial.

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