Multinational Monitor

SEP/OCT 2007
VOL 29 No. 4


Ecuador's Oil Change: An Exporter's Historic Proposal
by Kevin Koenig

Fueling Another Debt Crisis
by Neil Watkins

The Best Congress Oil Could Buy
by Steve Kretzmann

A Call for Global Economic and Energy Transitions

Sin and Society II
by Edward Alsworth Ross


Bolivia Asserts Oil Sovereignty
an interview with Carlos Villegas

Causes of Soaring Oil Prices
interviews with oil industry analysts

Can Big Oil Adapt to Climate Change?
interviews with oil industry analysts


Behind the Lines

Independence from Oil

The Front
CAFTA and the Politics of Fear - Whistleblowers Betrayed

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News



Independence From Oil

If you think calls for energy independence sound too shrilly nationalistic as a slogan, consider how aggressively ExxonMobil and its friends in Big Oil oppose the notion.
“Energy independence is not only impossible for most countries, its pursuit can be counterproductive,” insists ExxonMobil CEO Rex Tillerson. “The best way to achieve energy security is through diversification of energy sources — fostering the development of more energy from more sources and geographic locations through open, competitive markets.”
Set aside the talk about “open, competitive” markets — a ridiculous notion in a market dominated by a producer cartel, the world’s largest multinationals operating as vertically integrated producers, refiners and retailers, and a rigged Wall Street insider trading game for oil futures. For Tillerson and his co-conspirators, “energy interdependence” — which the industry posits as an alternative scheme to achieve “energy security” — is a nice-sounding buzzword to signify multinational corporate control over global resources.
Energy interdependence in this context inherently means national dependence on — and subservience to — the oil companies. It means importing countries — of which the United States is the largest, but poor countries are the most vulnerable, as Neil Watkins discusses in this issue — are economically vulnerable to price spikes. For the United States, it means a permanent commitment to empire and military entanglement in the Middle East.
Slogans necessarily do not convey complexity, nuance and contradiction. Big Oil isn’t so antagonistic to the idea of energy independence when it is deployed as a rationale for more Alaskan drilling.
Nonetheless, energy independence remains a worthy goal, at least as a direction to head in, rather than an end goal to be attained in the short term.
Moving in that direction, as Steve Kretzmann explains in the U.S. context, will require achieving independence from the political influence of Big Oil. For most countries, it will also eventually mean rapidly replacing reliance on oil altogether — a necessity in any case to address global warming. Progress in each of these areas — independence from Big Oil’s political influence, and independence from oil reliance — will go hand-in-hand.
A medium-term effort to achieve independence from oil — and other fossil fuels — will require creation of new global institutions and rules, as “A Call for Global Economic and Energy Transitions” in this issue suggests.
But success in such a systemic shift is only likely to come if shorter-term priorities can be achieved.
Here’s an 8-step plan forward, focusing on achieving U.S. independence from oil:                                                           

  1. Stigmatize Big Oil. The public health gains from reduced cigarette smoking depended crucially on the vilification of Big Tobacco. When the public perceived the tobacco companies as an illegitimate player in policy debates, it became much more possible to pursue evidence-based health policy.
  2. Kick Big Oil Out of Politics. Absent comprehensive campaign finance and lobby reform, Big Oil will continue to cast a pall over energy policy debates. That is, unless there is a focused campaign that makes the cost of accepting oil industry contributions greater than their monetary benefit, and makes it unpalatable for policymakers to meet with industry lobbyists. Oil Change International is leading the effort to achieve this political and cultural shift, through its Separation of Oil and State initiative.
  3. End all governmental subsidies of oil drilling and production, including support for Big Oil’s overseas operations. Plough all savings into renewable energy research and development (R&D), deployment of existing technologies and support for efficiency measures.
  4. Impose a windfall profits tax on Big Oil. With their grip over limited U.S. refining capacity, the major oil companies now routinely price-gouge consumers. Their excess profits should be taxed, and devoted to renewables and efficiency.
  5. Most oil is used for transport, meaning efforts to reduce oil dependence must focus on car and truck usage of gasoline. The 2007 Energy Bill increased fuel efficiency standards, requiring cars average 35 miles per gallon by 2020. This is less than many European countries and Japan and China require right now, as the International Energy Agency has noted. Much more aggressive standards, starting right away and ratcheting up continuously, must be put in place.
  6. Mandating electric cars. Even as gasoline-fueled cars become more efficient, they must be displaced by cars that do not rely on the internal combustion engine. If there is a political mandate, electric and perhaps hydrogen cars will be feasible in the near term.
  7. There must be a major build out of public transportation, both locally and regionally. Local public transportation should be free.
  8. Federal and state governments must invest large sums — tens of billions of dollars annually — in renewable energy and energy efficiency technologies. Where possible, the fruits of these investments should be made available nonexclusively, and never licensed to create price-gouging monopolies.

There is nothing particularly innovative about this agenda, which is no different than it would have been a quarter century ago. Stagnation on energy policy reflects, to a very considerable degree, the oil industry’s enormous political power. Achieving independence from oil is at least as much a political as technological challenge.


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