Monday, January 29, 2007

Splitting up can be messy.

Back in the 2000 election, a lot of people warned against electing George W. Bush and Dick Cheney, 'two oil guys' to the two most powerful offices in the country.

And there is no question that the Bush presidency has been a great six years for Big Oil. The energy bill pushed by Bush and his allies in Congress and passed during the first Bush administration gave away billions in tax dollars to subsidize an industry that, frankly, needs subsidies like Barry Bonds needs nutritional supplements. The administration resisted progress on any number of fronts that the oil companies didn't want to see progress on, everything from higher fuel standards on vehicles and research on alternative fuels to emissions standards and global warming. The invasion of Iraq was supposed to guarantee that the third largest proven oil reserves in the world would be safely under the control of a friendly, pro-American government in a secure, stable country and accessible to exploitation by western firms. Some neo-con planners envisioned using it as a platform to invade Iran and enforce a 'Pax Americana' throughout the middle east, which is why they planned to build fourteen permanent military bases in Iraq-- plans which have since been put into what is hopefully a permanent deep freeze. Although things haven't worked out that way in Iraq, the war was still a boon to Big Oil as prices last year hit $80 a barrel and produced record profits.

But it seems that all things must come to an end, or at least must be re-evaluated. Last year the President said in his State of the Union speech that we are 'addicted to oil.' This year he proposed higher CAFE standards on new automobiles and research into alternative fuels-- which is good, but don't forget how hard this administration and their allies in Congress fought against these things for years, both openly and behind the scenes by cutting funding for alt-fuel research. Oil prices have fallen into the $50 range. It is clear that Iraq will never be the safe haven for American corporations that the oil companies had hoped.

So there were a couple of news stories out today that made it clear that the split is widening. One story was that the Bush administration (still thinking that the way to 'win' in Iraq is to dig ourselves in deeper) is threatening Iran with unspecified consequences if they become more involved in Iraq (see Bush's answer to an intractable war: threaten to start another one for why this is a stupid course of action; if we want to theaten a country we have to have the ability to carry it out, and thanks to Bush we really don't.) The other story is more profound: Shell and its partners signed a $4 billion agreement with Iran to develop oil fields. Shell risks U.S. sanctions by doing so. But it did so anyway, which is a poke in the eye to the Bush plan to isolate Iran economically.

Now granted, Shell is not a U.S., but rather a Dutch company. At the same time it has widespread presence in the United States and close ties to a number of American companies. So what this is really saying is that 1) Shell does not fear whatever George Bush can do (he is toothless, and they already know that) and 2) they consider that given a choice between the U.S. and Iran, they consider that Iran has more to offer. One has to wonder how long it will take before American-owned companies take the same course.

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