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The Real Cost of Cheap Oil
The Gulf disaster is only unusual for being so near the US. Elsewhere, Big Oil rarely cleans up its mess
Big Oil is holding its breath. BP's shares are in steep decline after the debacle in the Gulf of Mexico. Barack Obama, the American people and the global environmental community are outraged, and now the company stands to lose the rights to drill for oil in the Arctic and other ecologically sensitive places.
The gulf disaster may cost it a few billion dollars, but so what? When annual profits for a company often run to tens of billions, the cost of laying 5,000 miles of booms, or spraying millions of gallons of dispersants and settling 100,000 court cases is not much more than missing a few months' production. It's awkward, but it can easily be passed on.
The oil industry's image is seriously damaged, but it can pay handsomely to greenwash itself, just as it managed after Exxon Valdez, Brent Spar and the Ken Saro-Wiwa public relations disasters. In a few years' time, this episode will probably be forgotten - just another blip in the fortunes of the industry that fuels the world. But the oil companies are nervous now because the spotlight has been turned on their cavalier attitude to pollution and on the sheer incompetence of an industry that is used to calling the shots.
Big Oil's real horror was not the spillage, which was common enough, but because it happened so close to the US. Millions of barrels of oil are spilled, jettisoned or wasted every year without much attention being paid.
If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP could probably have avoided all publicity and escaped starting a clean-up for many months. It would not have had to employ booms or dispersants, and it could have ignored the health effects on people and the damage done to fishing. It might have eventually been taken to court and could have been fined a few million dollars, but it would probably have appealed and delayed a court decision for a decade or more.
Big Oil is usually a poor country's most powerful industry, and is generally allowed to act like a parallel government. In many countries it simply pays off the judges, the community leaders, the lawmakers and the ministers, and it expects environmentalists and local people to be powerless. Mostly it gets away with it.
What the industry dreads more than anything else is being made fully accountable to developing countries for the mess it has made and the oil it has spilt in the forests, creeks, seas and deserts of the world.
There are more than 2,000 major spillage sites in the Niger delta that have never been cleaned up; there are vast areas of the Colombian, Ecuadorian and Peruvian Amazon that have been devastated by spillages, the dumping of toxic materials and blowouts. Rivers and wells in Venezuela, Angola, Chad, Gabon, Equatorial Guinea, Uganda and Sudan have been badly polluted. Occidental, BP, Chevron, Shell and most other oil companies together face hundreds of outstanding lawsuits. Ecuador alone is seeking $30bn from Texaco.
The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil. If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes, the price would jump and the switch to clean energy would be swift.
If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world's oil would almost certainly be left in the ground.
25 Comments so far
Show AllAlternatives exist but nobody cares. Just finish up all the oil to the last drop is all they want except they have to make money before the last drop is sucked up.
Oil is just a means to an end for the elites. Before that their commodity du jour was coal, and before that cotton. Rewind further and it was spices. In the far east the British found another one, to grow in India and deliver in China: Opium. Gold was it for the Spanish adventures in the New World. After the oil is consumed, what will be the new magic commodity for "justifying" war?
Whatever it is, YOU MUST NEED IT!! You must not be self-sufficient!! Consume the magic commodity, pay your taxes, and vote for elites in the elections! You must do your part to propagate elite dominance of the earth!
Somewhere in that list of commodities du jour should be Whale Oil.
Has there been any attempt to quantify the real cost of a gallon of oil or of gasoline in real terms, i.e. taking into account the environmental impacts and any other hidden costs?
This would be really useful information for the purpose of educating people about the issue.
I ask the same questions in a post I made to a related article - "Tough Oil" - also on today's CD front page
This is how Capitalism currently functions. In order to maximize profits and returns to the shareholders , costs must be passed on to some other party.
99 times out of 100 these costs are passed on to the Enviroment or the Worlds poor.
These "Capitalists" would not be so willing to "Invest their Capital" if they had to bear the costs.
The tough question for Auto-Addicted America is - when are
we going cold turkey from the highway sprawling, gas-guzzling, auto-addicted lifestyle which is destroying our planet, our livelihoods, our health and our formerly gorgeous green countryside?
When will we finally get serious and forget the "electric car" bromides and begin seriously taxing gasoline and putting those funds into first operating existing transit systems, begin to use old tracks for new transit links, run shuttles etc?
We cannot continue with Wars for Oil, destroying all our green farmland for exurban McMansions, and consuming 25% of the World's oil for our woefully inefficient cars and trucks.
There will be some pain in the transition away from our auto-addiction.
But in the long run we will find more community, more green-spaces, and more health as people walk and ride bikes instead of hop in the car, get into traffic jams, to then park in sprawling green space destroying parking lots.
We will also find we save tons of money no longer repaving the acres and acres of
asphalt, the 30,000 per year auto deaths, the wasted resources for 3 cars per family.
It is a "Win-Win-Win" scenario except for the bloodsucking life-destroying oil companies and their allies.
There was a joke told during the Carter administration when Congress was debating whether to put any federal money into alternative energy modes. The joke went something like this:
the oil companies were resisting any and all support for alternative energy until Washington would agree to total ownership of the sun by the oil companies.
Nothing much has changed.
It must be coming pretty clear why getting undisputed access to that "easy" middle eastern oil, big reserves of it lying just under land so barren and dry no one wants it anyway and is not worried about spills is so important. None of the money going into the military activities in the middle east is being diverted to clean up this mess in the gulf.
That eastern source is just getting more and more valuable the angrier people with internet access get about oil landing on "their beaches" and killing "their shrimp". The sense of entitlement from the "developed" world is usually pretty annoying but in this situation it serves a useful purpose.
Now if only those people whose access to communications tecknology can make Big Oil nervous would start thinking about the whole planet as "our" planet and all of humanity as "our" neighbours we might get somewhere.
Some time in the far future, like August, a major hurricane fueled by unnaturally warm ocean temperatures will cause $50 billion in damages to someone other than BP. Then you'll discover why the fine print says "We don't cover flood damages."
If you live in tornado country or in a river floodplain then you're immune to hurricanes but you might yet get assessed.
That's another real cost of cheap oil.
PACHAMAMA
http://www.pachamamaofilme.com.br/trailer_Pachamama.htm
Act quickly and Nationalize BP and subsidiary corporations and companies and seize all equipment and funds held by them to benefit the United States against this disaster, but as if or like the seizures of "too big to fail banks" go from there to develop solutions for this world crisis. Those who caused this situation and those who would most benefit from its now dubious success should take this as the "possible failure" part of their investment.
Awful. Hundreds of birds and sea turtles are dying, because of our addiction. The other day I heard an interview with NPR, one with an industry rep and another with a conservation group rep. The former stated something about stopping offshore oil not being pragmatic because "We have so many cars on the road." The conservation group, rebutted, the same, "We have so many cars on the road." We have created a society where a car has become a necessity because of sprawl. Cut off the enabler (oil) and we'd have to recreate how we do business. We'd have to put things in walking/biking distance, work would have to be telecommute or close to home, we'd have to set up better alternatives for moving around. And we can breathe better and hhelp the wild. So...I say shut it all down. No more offshore oil drilling. www.survivalwriter.blogspot.com
I know the elite they think of the rest of us as if were swine. Unfortunately, for them they get to take none of it with them.
I know some of the elite, and I know they don't think of us as swine. The problem is much worse than that. They simply don't think of us. They are incapable of empathy, they have very little sense of human nature, even if they have a sense of the world or its history, they are too self centered to clearly understand their relationship to it, and they don't understand the consequences of their actions on any and everything around them. To try to state this more simply, they are very much like the rest of us, simply human.
Some may be capable of extreme hatred and greed and malace, but in most cases the behavior they exhibit is the worst of all, they are simply banal.
Documentary filmmaker Adam Curtis succinctly captures the way the Power Elite view us. In Curtis' film "The Century of the Self", he uses footage of masses of people in city streets, often filmed from high in the towering skyscrapers of The Wealthy -- and from this perspective The People look like mere scurrying insects, brainless waves of movement, specs in the landscape of the Wealthy's making. In this way, I think Curtis indicates the perspective The Wealthy must have of us, the subjects of their social and economic (and even environmental) engineering.
"If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes..."
What pressure? Obama is only applying pressure with his lips to a long line of corporate dicks. Or had you not noticed how he says "peace" but means "maim and kill and terrorize", or how he says "get tough on banks" and greases their skids for another long ride--
The pressure is all rhetoric, signifying nothing but the horrifying, slack-jawed gullibility of the populace, including, it seems, "journalists" such as Mr. Vidal.
I suspect Gore would not have written thus.
As for the industry cleaning up the messes, won't happen. Corporations worked Chinese slaves to death in America just to build the railroads. They've already killed and maimed millions and destroyed vast swaths of the environment we need over oil just this century, never mind the centuries past.
They aren't going to let domestic animal deaths--including white-people deaths-- bother them much.
Just a hunch.
'They aren't going to let domestic animal deaths--including white-people deaths-- bother them much.'
As you have indicated, it is a progression. Ultimately even their parents' deaths, their childrens' deaths and their spouses' deaths. But of course they will call them heroes.
Oil civilisation is an absolutedly corrupted money mafia,
Criminals of bribery, government influance, and natural bad behaviour.
Nature poisoners, addicts to the high energy drug pleasure,
Beyond Poison, a fueled destruction leading to an earth seizure.
Beyond redemption, whole species families have broken or died,
The world is awash with the sludge brought in with every tide.
The oil powered civilisation slimes the nature for life required.
Chemically enhanced civilisation decaying at the peak of its pride.
A "Tar Baby" just washed up on the gulf coast. Who is going to touch it?
TWO things to say about this article and thread:
1) the article issues one of the most crucial matters : that the "concern" for the spill is much greater because it is happening and washing against a WESTERN power..but not some "distant" out of the way, out of mind, poorer nation. that is correct.
2) - ADMIRABLY -- the posters here that I will presume are many americans are HONORABLE in OWNING UP to the fact of "our oil addiction" as the ROOT of the consequence of the "thing" that now washes on america's own shores.
and I salute BOTH the article and the posters, particularly the americans. it's partly because of the latter, in the way I described above, that despite such evils created or committed by American Empire, and the complicity of americans towards it, that I continue to admire americans....even if it is probably the "fewer" among them that are truly clear in their conscience (although that is probably NOT Different among other societies and cultures).
nonetheless - again - BRAVO to my fellow posters, particularly americans who own up to "ours". I think you are really honorable individuals, the kind that america SHOULD be proud of, or the ones that OUGHT to be the examples of "the american".
YOU really give me continued optimism , EVEN for america despite all the mendacity and cravenness this nation displays.
individuals like yourselves are like the RARE or hard to find Jewels in piles of dung..and make the optimism or hope others try to nurture WORTHWHILE.
:-).
'The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil.'
This is an essential point, but it seems almost certain that the estimate of $200 is hopelessly inadequate.
Taking all the consequences of securing it, obtaining it, processing it, using it, and cleaning the consequent mess into account, all factors that are indubitably part of the cost, I believe it could easily be $1000 a barrel.
But then who am I? Of course I am no-one effectively. Just a blogger.
But then why has the true cost of oil and coal not been calculated by reputable people with the relevant qualifications and skills? Many individuals have done so but they are not listened to by legislators and industry insiders unless these structures pay them. This often makes knowledgeable people qualify their findings because the need funding.
I don't need funding. Perhaps my estimate is correct. Until there is a totally independent and disassociated study that says otherwise, I will insist my estimate is the correct one.
When the estimate is finally and inevitably made, all those who have used the fuels and products of this fossil resource industry will have to pay in accordance with a reasonable assessment of their responsibility in terms of usage and investment and profit extracted. It will probably have to be in the form of a tax, and of course we will all pay, but some will pay a very great deal.
I think many who would pay a great deal in this way know this already and are very busy loading the responsibility onto others. This is, of course, usually done by means of war.
We the People of the United States, in order to form a more perfect union........abrogate our government, allow our elected representatives to serve, not the people, but the corporations.
Is it not painfully, and expensively, obvious that corporate rule is a disaster? There is only one way that we can change the course of this nation in a peaceful manner. By electing representatives pledged to refuse corporate contributions, pledged to serve the best interests of the nation not those of the Banks, the Oil companies, the MIC or Wall Street.
It is really up to us.
"A drab of state, a cloth-o-silver slut,
To have her train borne up,
and her soul trail in the dirt."
Thomas Middleton as quoted by Thoreau in Civil Disobedience
Barack Obama is NOT outraged.
He just pretends to be outraged, but fact is he's been protecting BP over the US and the American people since day one.
Obama hasn't said anything about BP losing drilling rights.
On the contrary, his moratorium is another sham, and BP is still drilling away at another deepwater well, in the Gulf without an environmental permit. They're just being delayed on some permits. Then again, Obama's word is as slippery as the Louisiana coastline.
BP is the Neolibs main contractor for US Murder, Inc. aka. The Pentagon. I doubt BP's on thin ice here to my deep dismay.
One thing Obama is doing is keeping Americans imprisoned to Big Oil by continuing their monopoly as our only real energy source. Like the US government has done for 100 years, nothing new about that.
And other than his blathering rhertoric, and token gesture in the budget, he has zero intentions for "greening" anything, except his bank account.
A meme that must change: Americans are addicted to oil.
The U.S. citizens will obediently buy and use anything they are given by the Powers That Be, and with eagerness if the advertising campaigns are sexy enough. But the Powers That Be do not want us to buy and use anything but Oil and the moneystream of Oil By-products made by their Petroleum Infrastructure. They do not want to lose their investment on that existing infrastructure. THE POWERS THAT BE ARE THE ONES WHO ARE ADDICTED TO OIL and an Oil Culture is all they will allow us to have.
The following is a super article to that goes even deeper, explaining that the Oil Industry is on equal footing with institutions of our government and with them forms the powerful MILITARY-PETROLEUM COMPLEX.
http://www.fpif.org/articles/the_military-petroleum_complex
My view is that the Military-Petroleum Complex has been in control since the end of World War II when the Oil Industry convinced the U.S. Government that Oil is the apex of National Security resources (even supplanting manpower and human skills one gathers) and convinced the U.S. Government to grant the Oil Industry an evidently permanent EXEMPTION FROM ANTI-TRUST LAWS and the $$$ giveaway called THE OIL DEPLETION ALLOWANCE. It happened around 1945-47 along with the institutionalization of the U.S. National Security State that also created the CIA; the individuals finessing both the deal between the Oil Industry and the Government and creation of the CIA were part of the same Power Elite enclave.
This was an amazing coup for the oil industry: You must understand that just ten years before, during the Great Depression, the Oil Industry was flat broke and near busted. There was considerable diversity of companies and LOTS OF OIL available and the bottom fell out of the oil market. The Big Guys must have decided this could NEVER be allowed to happen again, that they had to limit the players (consolidation, monopoly, and the creation of OIL TRUSTS TOO BIG TO BUST! Sound familiar?! Sort of like Too Big To Fail, huh?). AND they had to force the Government to allow them to limit production and fix prices. The vast profits made by the Oil Industry during World War II allowed the Oil Industry to conduct itself on equal footing with the U.S. Government at the end of the World War II. And ever since, the Military-Petroleum Complex has dominated the economy, the consumer choices, the political choices, the environmental degradation. It forced on Americans the total automobile culture; whereas in Europe and Japan, for instance, there is a blend of public transporation and auto, in the U.S. public transportation was gutted after WWII. The Oil Industry has prevented U.S. consumers from having access to high mileage cars and has obstructed consumer access to technological advances in non-gas-guzzling transporation. And, as the article above shows, has locked us into constant Wars that use vast quantities of petroleum.
None of this has anything to do with the individual choices made by American consumers or citizens, when those choices are consistently LIMITED to the products put before Amercans by the Oil Industry and are always the same.
Thank you, John Vidol, for an interesting piece. However, it needs a firmer base in history and some tweeking, especially tweeking that "Americans are addicted to oil" meme into the trashcan.
Please understand that when Bush Jr. was referring to "addiction to oil", he was doing two things: 1/ propagandizing the U.S. public with a rationale for the Iraq Invasion and continued (perpetual) conflict in the oil/gas rich lands of Central Asia, and 2/ projecting on the American people the addiction of his own profiteering class of Oil dependent Oligarch junkies.