Big Oil Is Still Boss

A lot of pundits want President Barack Obama to turn terrible tempered in his handling of the Gulf of Mexico disaster. These critics ignore the real issue — the death grip the oil industry has on Washington and the state capitals of oil-producing states.

Oil industry power was the cause of the explosion and spill and will cause those that will no doubt occur in the future. Such power is also why Obama and his successors will find it next to impossible to shift the nation from its fatal dependence on foreign oil and, in the long run, to convert to alternative energy.

For Obama, keeping his temper under control was not his mistake. His error was made before the Gulf of Mexico disaster when he decided in March to greatly expand coastal drilling for oil and natural gas. In doing this, he and his team mistakenly accepted assurances by oil company engineers and geologists that offshore oil drilling was safe.

“Obama’s commitment to lift a moratorium on offshore oil drilling reflected the widely held belief that offshore oil operations, once perceived as dirty and dangerous, were now so safe and technologically advanced that risks of a major disaster were infinitesimal, and managing them a matter of technocratic skill,” environmental journalist John McQuaid wrote in Yale Environment 360, a publication of the Yale School of Forestry & Environmental Studies. “Today, the notion that offshore drilling is safe seems absurd.”

If good grades and academic achievement count for anything, the administration members should have known better. In his book about Obama’s first year, “The Promise,” Jonathan Alter wrote: “Eventually a full quarter of Obama’s appointees would have some connection [as alumni or faculty] to Harvard, just one of several elite universities represented en masse in the government. More than 90 per cent of early appointees had advanced degrees. … He surrounded himself with the best credentialed, most brilliant policy mandarins he could find even though almost none of them knew anything about what it was like to work in small business, manufacturing, real estate or other parts of the real economy.”

Oil company leaders are some of the more sophisticated, cynical and hardened veterans of the real economy, and they rolled over the Obama administration. They, too, are well educated. Oilmen tend to be engineers or geologists, a lot of them with graduate degrees in their fields. From their universities many of them headed into the oil fields for experience exploring and drilling for oil throughout the world, many times in corrupt Third World dictatorships such as Myanmar and Nigeria — no places for theorists or softheaded idealists.

They absorbed the oil business culture, shaped by generations of wildcatters, characters who drilled in areas given up by the risk-averse. The best of them have the hearts and minds of gamblers. Of course they would say drilling in deep water is perfectly safe. Taking chances is part of their business. In dealing with them, the Obama team should have heeded novelist Nelson Algren’s famous warning: “Never play cards with a man called Doc. …”

Industry executives and lobbyists are smarter and tougher at politics than the Obama team is. The industry has long dominated city councils, county boards, state legislatures, Congress and regulatory agencies. They control both Democrats and Republicans. The most recent example of their power in the Republican Party was when a Bush administration task force, headed by Vice President Dick Cheney and filled with industry people, secretly wrote an energy policy.

The Center for Responsive Politics reported that individuals and political action committees affiliated with oil and gas companies have donated $238.7 million to candidates and parties since the 1990 election cycle, 75 percent of which has gone to Republicans. Obama received $884,000 from the industry during the 2008 presidential campaign. His Republican opponent, Sen. John McCain, received even more, the center said.

After the oil rig explosion in the Gulf, Obama imposed a six-month moratorium on 33 deep-water Gulf Coast exploratory wells and stopped other oil projects. He also appointed an independent commission to investigate the Gulf explosion and named as its leaders former Florida Sen. Bob Graham and Bill Reilly, who once led the Environmental Protection Agency. The president said the commission would follow “every lead without fear or favor.”

But the oil business is already maneuvering for representation on the commission. John Breaux, a former powerful senator from Louisiana who’s now an oil lobbyist, told Bruce Alpert of the New Orleans Times-Picayune that he is working to put on the commission some oil industry representatives, from companies such as Shell, one of his clients. The Center for Responsive Politics said oil giant Chevron is another one of Breaux’s clients, as are the National Propane Gas Association and Plains Exploration and Production.

Shell has plenty of experience with oil spills. John Vidal reported in The Observer newspaper that more than 1,000 spill cases have been filed with the Nigerian federal government against Shell. Shell blamed rebel vandalism for the spills. “More oil is spilled from the [Niger] delta’s network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico,” Vidal wrote. Chevron also has fields in Nigeria.

The BP disaster in the Gulf hasn’t stopped the industry. Neither have Obama’s demands for more safety.

Shell and Chevron, according to Chris Kromm of the Institute of Southern Studies, have leased new drilling rigs from Transocean, the company whose Deepwater Horizon rig blew up in the Gulf on April 20 and then sank. Kromm quoted an industry publication story about Transocean that said, “Transocean [is] still strong and growing.” He concluded, “Despite the disaster still unfolding in the Gulf, the energy and offshore drilling industries feel the same way about their future.”

So far, the oil business remains in charge.