The Grand Oil Party Takes Washington by Storm
by Michael Klare
Pop the champagne corks in Washington! It’s party time for Big Energy. In the wake of the midterm elections, Republican energy hawks are ascendant, having taken the Senate and House by storm. They are preparing to put pressure on a president already presiding over a largely drill-baby-drill administration to take the last constraints off the development of North American fossil fuel reserves.
The new Republican majority is certain to push their agenda on a variety of key issues, including tax reform and immigration. None of their initiatives, however, will have as catastrophic an impact as their coming drive to ensure that fossil fuels will dominate the nation's energy landscape into the distant future, long after climate change has wrecked the planet and ruined the lives of millions of Americans.
It’s already clear that the new Republican leadership in the Senate will make construction of the Keystone XL Pipeline, intended to carry heavy oil (or “tar sands”) from Alberta, Canada, to refineries on the U.S. Gulf Coast, one of their top legislative priorities. If the lame-duck Congress fails to secure Keystone's approval now with the help of pro-carbon Senate Democrats, it certainly will push the measure through when a Republican-dominated Senate arrives in January. Approval of that pipeline, said soon-to-be Senate majority leader Mitch McConnell, will be among the first measures “we’re very likely to be voting on.” But while the Keystone issue is going to command the Senate’s attention, it’s only one of many measures being promoted by the Republicans to speed the exploitation of the country’s oil, coal, and natural gas reserves. So devoted are their leaders to fossil fuel extraction that we should start thinking of them not as the Grand Old Party, but the Grand Oil Party.
In seeking to boost fossil fuel production, the GOP leadership is already mapping out plans to fight on several fronts in addition to Keystone. For example, New Jersey Governor Chris Christie, a likely presidential candidate, is promoting a scheme to eliminate what he calls government “obstacles” — that is, federal oversight of energy-related matters — to the construction of any border-crossing pipelines, whether for the importation of tar sands from Canada or the export of natural gas to Mexico. Other prominent Republicans, including McConnell (who comes from coal-rich Kentucky), are eager to prevent the Environmental Protection Agency (EPA) from imposing strict carbon restraints on the use of coal, ban federal oversight of hydro-fracking, open offshore Alaska and Virginia to drilling, and facilitate foreign sales of U.S. crude oil and liquefied natural gas (LNG).
Whatever individual initiatives one Republican figure or another may be pushing, as a group they fervently believe in the desirability of boosting the consumption of fossil fuels and the absolute need to defeat any measures designed to slow climate change through restraints on such consumption. For many of them, this is both an economic issue, aimed at boosting the profits of U.S. energy firms, and bedrock ideology, part of a quasi-mystical belief in the national-power-enhancing nature of petroleum. Top Republicans argue, for instance, that the best way to counter Russian inroads in Ukraine (or elsewhere in Europe) is to accelerate the fracking of U.S. shale gas reserves and ship the added output to that continent in the form of liquefied natural gas. This, they are convinced, will break Russia’s hold on the continent’s energy supplies. “The ability to turn the tables and put the Russian leader in check,” House Speaker John Boehner wrote in March, “lies right beneath our feet, in the form of vast supplies of natural energy.”
Central to the political ethos of many Republicans, including the likely candidates for president in 2016, is a belief in the restorative abilities of oil and gas when it comes to waning national power and prestige. Governor Christie, for example, devoted his initial foreign policy speech to a vision of a “North American energy renaissance” based on the accelerated production of hydrocarbons in Canada, Mexico, and the U.S. “The dramatic change in the energy landscape in North America,” he declared, “has made all of us better off and will continue to do so.” (Significantly, Christie unveiled his plan in Mexico, which is expected to open its oil and gas fields to development by U.S. firms for the first time since it expropriated foreign oil assets in 1938.)
In order to claim such benefits from increased fossil-fuel production, the increasingly severe effects of climate change — including on highly vulnerable coastal communities in New Jersey — have to be conveniently left out of the equation. In fact, most top Republicans solve that problem either by denying the very reality of climate change or by viewing it as, at worst, a future minor irritant. In one of the genuinely bizarre outcomes of the recent election, Oklahoma’s James Inhofe is expected to be chosen as the new chairman of the Senate Environment and Public Works Committee. A long-time proponent of the view that human-induced climate change is a giant “hoax,” Inhofe has pledged, among other things, to sabotage the EPA’s drive to restrict carbon emissions from coal.
The Power of the Purse
What accounts for such a messianic belief in the beneficial effects of fossil fuel extraction?
Never underestimate the lure of money — or, to be more precise, campaign contributions. The giant energy firms are among the leading sources of campaign financing. Most of their money has, in recent years, gone to Republicans who espouse a pro-carbon agenda — and with such a crew now ascendant in Congress, staggering sums will undoubtedly continue to pour in.
According to the Center for Responsive Politics (CRP), a nonpartisan group that tracks money in politics, the oil and gas industry was the ninth biggest supplier of campaign funds during the 2013-2014 election cycle, with 87% of the $51 million it spent going to Republicans. The coal industry provided another $10 million in contributions, with 95% going to Republicans. Koch Industries, the energy conglomerate controlled by billionaire brothers Charles and David Koch, was the top oil company provider, accounting for $9.4 million in contributions; Chevron, ExxonMobil, and Occidental Petroleum were also major donors. These figures, it should be noted, only include direct donations to candidates in accordance with federal campaign laws. They exclude funds channeled through secretive super PACS and supposedly “non-profit” organizations that are not bound by such rules. During the 2012 election, the CRP reports, the Koch Brothers helped steer an estimated $407 million to such entities; equally large amounts are thought to have been expended in the 2014 go-around.
To a significant extent, these funds were shuttled to especially industry-friendly and powerful Republicans. Among the leading recipients of oil funding in 2014, according to the CRP, were John Boehner and Mitch McConnell, along with John Cornyn, the particularly enthusiastic pro-energy senator from Texas, and Congressman Cory Gardner of Colorado, who just took a Senate seat from the environmentally conscious Democrat Mark Udall. Not surprisingly, among the top recipients of coal industry funding were Boehner and McConnell, as well as especially coal-friendly congressional representatives like Shelley Moore Capito and David McKinley of West Virginia.
These and other recipients of fossil fuel cash know full well that their future access to such largesse, and so their ability to get reelected, will depend on their success in pushing legislation that facilitates the accelerated extraction of oil, gas, and coal. It doesn’t take too much imagination to calculate the consequences of this conveyor belt of financial support, both for affected communities and for the climate.
Another way to understand the Republican embrace of fossil fuels is to focus on the relative importance of oil, gas, and mining operations to the economies of certain predominantly “red” states with built-in Republican majorities. According to a revealing analysis by John Kemp of Reuters, only 13 U.S. states export more energy than they import (in descending order): Wyoming, West Virginia, Texas, North Dakota, New Mexico, Colorado, Oklahoma, Alaska, Pennsylvania, Montana, Arkansas, Utah, and Kentucky. Fossil fuel extraction helps drive the economies of these states and voters there tend to elect particularly pro-extraction Republicans. When the 114th Congress convenes in January, 19 of the 26 Senate seats from these states will be held by Republicans and only six by Democrats.
Note that these states played a particularly pivotal role in the 2014 midterms, with the Republican leadership making an all-out drive to score major victories in them. Ten of these states had Senate races this year and the Republicans succeeded in ousting Democrats in five of them: Wyoming, Colorado, Montana, and Alaska. Needless to say, the giant oil and coal companies poured vast amounts of money into these campaigns. Koch Industries, for example, made substantial contributions to the Senate campaigns of Tom Cotton in Arkansas, Steve Daines in Montana, and Cory Gardner in Colorado.
In many respects, energy-surplus states have different interests than other states, which must import the preponderance of their energy supplies. These energy-importing states, including Democratic bastions like Illinois, New York, California, and Massachusetts, often seek strict federal regulation of things like hydro-fracking and power-plant emissions. Surplus states like Texas and Pennsylvania, on the other hand, largely prefer state-level oversight rather than the generally stronger federal version of the same.
The major fossil fuel companies also favor state-level oversight of energy affairs, which regularly results into drilling-friendly legislation. When it comes to hydraulic fracking, here’s how ExxonMobil CEO Rex Tillerson politely puts the matter: “[W]e believe that is best left to the state, [to] state regulatory bodies,” as they are more attuned to conditions on the ground. “[W]riting a federal standard to apply across a whole range of these conditions we don't think is the most efficient way to go about it.”
In this and other ways, energy-surplus states often resemble oil-rich countries like Russia, Nigeria, Angola, and Kazakhstan, where energy companies enjoy a cozy, often venal, relationship with top leaders. Scholars in the field speak of an “oil curse” that bedevils such countries, in which the best interests of ordinary citizens — not to mention the environment — are regularly sacrificed in efforts to boost output and line the pockets of ruling elites.
Oil, Gas, and National Security
A third reason why the Grand Oil Party tends to favor fossil fuel extraction is that its representatives view such production as a vital pillar of national security — another Republican priority. Increased oil, gas, and coal extraction is said to enhance U.S. security in two ways: by invigorating the economy and so strengthening America’s competitive advantage vis-à-vis rival powers and by bolstering Washington's capacity to confront hostile petro-states like Iran, Russia, and Venezuela.
The recent upsurge in oil and natural gas production in what’s being called “Saudi America” is especially beneficial, Republicans claim, because it lowers the cost of energy for American manufacturers and attracts fresh investment in energy-intensive activities by companies that might otherwise locate their factories in China, Taiwan, or elsewhere. “The production boom in gas and associated lower costs,” Governor Christie argues, “have contributed to ‘re-shoring,’ a return of manufacturing jobs that had been migrating to Asia before.”
Equally important, it is a Republican conviction that an upsurge in domestic oil and gas production will give Washington a stronger hand in its dealings with Iran and Russia, in particular. For one thing, by becoming less dependent on imported energy, the U.S. is making itself ever less vulnerable to the blandishments of major suppliers in the Middle East. In addition, by driving down international prices, American oil and gas output is also curtailing the energy revenues of Iran and Russia, making their leaders more susceptible to U.S. pressure.
Given this, the Republican leadership is especially focused on eliminating existing obstacles to selling crude oil and natural gas abroad. At the moment, the exporting of crude is prohibited, thanks to a 40-year-old ban adopted in the wake of the Arab oil embargo of 1973-1974. Natural gas exports are hindered by the lack of LNG facilities in this country and by regulatory barriers to their rapid construction. Constraints on such construction, according to Boehner (who, of course, wants to lift them), constitute a “de-facto ban on American natural-gas exports — a situation that [Russian President Vladimir] Putin happily exploited to finance his geopolitical goals.”
Not surprisingly, the major oil and gas companies are also strongly in favor of such steps, which would allow them to sell cheap oil and gas to Europe and Asia, where prices are substantially higher. Building more gas-export facilities, says Erik Milito, an official of the pro-industry American Petroleum Institute, would mean that “our LNG exports could significantly strengthen the global energy market against crisis and manipulation… a win-win for our economy and our friends.”
The oil companies are also pushing for intensified efforts to integrate the U.S., Mexican, and Canadian oil systems which, Christie and others claim, would enhance U.S. security by diminishing reliance on Middle Eastern and other extra-hemispheric suppliers. At the same time, such integration would help American companies acquire greater control over production in Mexico and Canada. Mexico’s new energy legislation, which opens the way for foreign investment in its oil and gas fields, was heavily pushed by U.S. oil firms and prominent Republicans.
There is little question that increased exports would benefit American energy firms and their customers abroad. Any easing of export constraints would, however, induce U.S. producers to divert output from domestic markets to more lucrative markets abroad, potentially harming American consumers. While prices might fall in Europe, they could rise in the United States, removing the current economic stimulus that relatively low-cost oil and gas provide. Increased exports would also mean that the recent slowdown in U.S. carbon emissions — a product of economic hard times and a switch from coal to gas in electricity generation — would be rendered meaningless by increased greenhouse gas emissions from the combustion of U.S. fossil fuels in other countries.
Fossil Fuels Forever
At a time when more and more people around the world are coming to recognize the need for tough restraints on fossil fuel combustion, the Republicans are about to march forcefully in the opposite direction. Theirs will be a powerful vote for a fossil-fuels-forever planet.
The consequences of such a commitment are chilling. While virtually all scientists and many world leaders have concluded that the heating of the planet must be kept to an average increase of 2 degrees Celsius (3.6 degrees Fahrenheit), the pro-carbon agenda being pursued by the Republicans would guarantee a planet heated by four to six or more degrees Celsius or six to 10 degrees Fahrenheit. That large an increase is almost certain to render significant portions of the planet virtually uninhabitable, and so threaten human civilization as we know it. As the U.N.’s prestigious Intergovernmental Panel on Climate Change (IPCC) noted in its recent summary report, “Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems.”
With Republicans now in control, pro-carbon initiatives will be the order of the day in Congress. President Obama has veto power over most such measures and is reportedly planning various executive actions on climate issues — some intended to clinch a recent climate deal with China. In the long run, however, his need to secure Republican support for key legislative endeavors and his own “all of the above” energy policy may mean that he will give ground in this area to win votes for what he may view as more actionable steps on free trade pacts and other issues. In other words, for each modest step forward on climate stabilization, the latest election ensures that Americans are destined to march several steps backward when it comes to reliance on climate-altering fossil fuels. It’s a recipe for good times for Big Energy and its congressional supporters and bad times for the rest of us.
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation.
Copyright 2014 Michael T. Klare