A Brief History of Oil – by Guest Blogger Cameron Atwood

by Craig ShieldsPosted on August 23, 2009 Posted in Renewables - Politics

We here in the US rank 13th of the top 15 oil-producing nations, with only 2% of the reserves– yet we use 25% of world oil production with only about 5% of the world’s population. While we in America use 20 million barrels of oil a day, and would exhaust our domestic reserve in less than three years without foreign supplies, Iraq possesses the second largest oil reserve in the world. If this huge Iraqi reserve were combined with the nearly equal reserve in its pre-WWI province now known as Kuwait, it would rival even the Saudi reserve – the largest in the world. In terms of oil strength, these three Arab states are followed by the United Arab Emirates, Iran, Venezuela, the former Yugoslavia, Russia, Libya and Mexico.

Note this group is a veritable Who’s Who of 20th (and 21st) century US “foreign intervention.” Way back in the 1920’s, after the fall of the Ottoman Empire, the USA, Britain and France carved the Middle East into manageable bits, drawing each new border to divide local cultures and deliberately enclose a new mix of rival ethnic elements. The UK and US then established Israel as a refuge for the persecuted Jewish people, and as a bastion of western influence in the region. From the 1930’s through the 1960’s, US oil and automobile companies spent great sums of money lobbying state and federal governments to fund a national transportation system based on the exclusive use of their products.

From beginning of the 2000 election cycle to 2006 alone, the major oil corporations supplied $52 million in campaign contributions. Of this cash pile, 80% was given to Republican campaigns. Following the widely criticized “Energy Task Force” strategy meetings that Mr. Cheney held with oil company executives, the “public servants” in the Bush Administration refused to release the content of those discussions, citing “executive privilege.” These oil corporations pocketed an unprecedented 79% upsurge in profits since Mr. Bush took office in 2000. The biggest five alone have netted a record total of $254 billion in profits. One oily CEO got a $97 million pension, over and above his inflated pay and bonus plan.

We now export $700 billion a year in direct cash payments for foreign oil alone. Yet the 2005 Bush “Energy Plan” gives over $6 billion in “corporate welfare” to these wealthy major oil companies, allegedly to help them increase their oil refining capacity. However, these companies have recently confessed (after willfully closing a significant portion of their existing refineries over the previous ten years) that no amount of tax breaks and subsidies will induce them to build more refineries. While they closed plants that met environmental regulations, they now blame these same regulations for their lack of refining capacity. Internal memos have recently surfaced illustrating a premeditated tactic to deliberately reduce supply in order to seize a greater share of the average American’s disposable income.

Astonishingly, the chief executives of the five largest US oil giants would not submit to testimony under oath at a recent congressional hearing (a motion by Senator Cantwell to place them under oath was roundly seconded, but the Republican chairman then defiantly squelched this motion). Much of their ‘testimony’ was later described as false and misleading. Of course, Mr. Bush and Mr. Cheney have long histories with the oil industry. Mr. Bush’s oil ties are well documented – as are his family’s decades-long ties to the Saudi royals. Enron’s Ken Lay was a top Bush campaign contributor. Mr. Cheney still receives “deferred compensation” from the oil services company he headed, a subsidiary of which, Kellogg Brown & Root (KBR), received vast un-bid contracts for base construction and supply in Iraq.

Keep in mind that oil doesn’t merely fuel our cars and SUVs – beyond its crucial role in food production from sowing and reaping to fertilizers and pesticides, manufacturing and distribution, and medicines, think of all those many things made of plastic in your house, car and business… and nobody is making any more oil.