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Braced for a Power Struggle |
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Andy Rowell, 14 May 1997
Article originally appeared in The Guardian and can be accessed at Andy Rowell's Website
Braced for a Power Struggle
Earlier this year, the governor of the Bank of England, Eddie George, addressed the Institute of Petroleum: "The annual value of world oil output works out something like $500 billion", he said. "That is more than the annual gross domestic product of any country outside of the G7. On that basis, I think that you are entitled to a permanent seat on the UN Security Council".
Some would argue that that the oil industry is now so powerful that politicians need the industry more than the industry needs them. Nevertheless, last week's appointment by Tony Blair of Sir David Simon to the heart of the Labour Administration and of Europe may be indicative of the way that politics and corporations are heading.
Sir David, chairman of BP and non-executive director of mining giant RTZ was made Minister for Competitiveness in Europe. His new work involves him in both the Treasury and Department of Trade and Industry, where he is certain to come across his former industry colleagues.
The criticism so far of Simon's appointment has focused solely on BP's human rights and environmental record in Colombia, but BP's work in other parts of the world is equally contentious. Much of it is in frontier areas.
In Alaska, BP has been the dominant force in the development of the North Slope and for years, Simon's company has lobbied to open up Arctic National Wildlife Refuge (ANWR) to oil development. Called America's Serengeti, ANWR is America's last pristine wilderness. BP also holds the majority share in Alyeska a consortium of seven
companies which built and operates the Trans Alaska Pipeline (TAPS). Alyeska's critics argue that its broken promises and cost cutting led to Exxon Valdez disaster.
Closer to home, on Monday, Greenpeace produced a report calling for BP to stop drilling in the "near-pristine environment" west of the Shetland Isles, one of Europe's richest whale habitats.
Simon's appointment raises other questions about the political influence of the industry at one of its more difficult times. The industry's domination of the energy market is potentially threatened by the political need to respond to climate change.
Global production of oil is due to increase by nearly 24 per cent in the next decade, while gas output is set to soar by 40 per cent. Reflecting this trend, BP recently announced it plans to nearly double production over the next ten years to 2.5 million barrels a day.
The expansion is at odds with government policy, which is to reduce emissions. Science says we cannot carry on burning oil, gas and coal into the next century without serious environmental and social effects.
Despite the evidence of 300 of the world's leading scientists, the industry is still trying to disprove climate change science. It now controls the business response to climate change. And analysts say has moved to capture the committees and policy arms of most employers' organisations.
But the influence of the industry is far greater in the US than in Europe. "It is the single most powerful lobby in Washington fighting against environmental regulation and
corporate accountability," says Steve Kretzmann from the US based Project Underground. "Its influence extends into placing their members into the Administration and staff members of Congress. Their financial contributions to politicians are huge". Alaskan Congressmen, he says, are almost exclusively funded by the oil industry.
The US is also home to the three industry front organisations lobbying to protect the oil industry and prevent countries moving away from fossil fuels to new technologies. negotiations: The Global Climate Coalition, the International Climate Change Partnership (ICCP) and the Climate Council are all funded in part by the oil industry, and although, BP left the vociferous GCC, it is still a prominent player in the American Petroleum Institute (API) which remains a GCC member. And BP is also a member of the ICCP.
Despite the threat of climate change, the industry still has the backing of governments and the major financial institutions who try to encourage oil companies into their countries rather than price them to switch to renewable technologies. "This is an industry with a future", said David Simon, last year. "This is an industry that knows how to react when the going gets rough".
Just how rough it could become depends on Simon's new political masters.
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