This article is offered here not only because of it’s fairly original approach to explaining the petroleum industry, but because it provides a good (though brief) history as well. Comments welcome! ~ KH
This article is dedicated to all the workers who have lost limbs and lives in petroleum industry accidents since the early 1900s and to people in Nigeria, the Amazon, and other places fighting against oil-based cultural and environmental destruction.
Introduction: Through a Mythic Rear-View Mirror
“The modern world is in some ways a dialogue between oil and water,” notes environmental professor David Orr in his book Earth in Mind:
Water makes life possible, while oil is toxic to most life. Water in its pure state is clear; oil is dark. Water dissolves; oil congeals. Water has inspired great poetry and literature. Our language is full of allusions to springs, depths, currents, rivers, seas, rain, mist, dew, and snowfall….We think of time flowing like a river. We cry oceans of tears. We ponder the wellsprings of thought. Oil, on the contrary, has had no such effect on our language. To my knowledge, it has given rise to no poetry, hymns, or great literature, and probably to no flights of imagination other than those of pecuniary accumulation.
What has oil done, then? Quite a lot, including founding what we like to think of as civilization and installing its industrial output. Orr looks at the cost:
Cheap oil and the automobile pitted community against community, suburban commuters against city neighborhoods. Money made from oil and oil-based technologies corrupted our politics, while our growing dependency corrupted our sense of proportion and scale. To guarantee our access to Middle Eastern oil we have declared our willingness to initiate Armageddon. We are now spending billions in fulfillment of this pledge even though a fraction of this annual bill would eliminate the need for oil imports altogether.
Oil has also raised a modernized mythology of the subterranean smoking and flaming to the planet surface. Our current state of global crisis looks to a mythological eye like the Underworld is eradicating the upperworld.
Most people with a basic psychological education know about what Freud named the “repetition compulsion”: the human tendency to repeat old patterns even when they disrupt and sadden rather than satisfy. Anyone capable of some degree of self-reflection quickly discovers similarities between friends, bosses, relationship partners with whom we repeat typical situations over and over until we realize what we need from these recurrences. Jung referred to the largely unconscious woundings that drive the compulsion to repeat as “complexes.”
What goes unnoticed, especially in cultures frozen in an adolescent belief in the delusion of a wholly self-made life free of limitations, is that similar patterns of recurrence play out collectively, in the world at large. At that level the vehicle is not the personal complex, it’s a collective structure: myth, the cultural repository of typical situations relived.
It isn’t difficult to see this in religion’s recycling of familiar motifs: the Redeemer who will save us, whether Horus, Jesus, Buddha, or the latest wise man who will explain it all to us; the heaven, kingdom, or new age at the end of time or just around the corner; the ancient dream of leaving the body behind to rise as pure spirit; the hungry god who must be fed with sacrifices.
Such motifs do not remain within religion, however. The new Redeemer appears today as the sought-after bringer of a new method, workshop, or philosophy: sought after by those who fail to recognize their uncritical devotion as religious. The Golden Age shines again in every new program of reform, whether religious, financial, or political (“Pledge to America”). Atheists or not, scientists working feverishly on the “transhumanist” project to upload consciousness into cyberspace unknowingly strive to update the Ascension into heaven.
On Wall Street, named after a site where slaves were once auctioned, the ancient bull god Moloch, to whom worshipers once sacrificed children, the poor, and the infirm as the Assyrian Empire crumbled, reappears as the insatiable “invisible hand” into whose grasp countless lives must be placed without question.
How to know when such myths stir back to life? By using a method similar to that of comparative anatomy or medical or psychological diagnosis: fitting symptoms, in this case symbolic events, to known syndromes, in this case myths. Jung, who called this kind of work “amplification,” compared it to deciphering an unknown word in a text.
See how the mythologically unknown (e.g., the insatiably hungry bull on Wall Street) presents itself and in what contexts, then look for similar appearances in legend and lore (Moloch, Saturn, Cronus). The more impressive and numerous the parallels, the higher the degree of substantiation.
Jung and Joseph Campbell believed that myths and archetypal motifs stirring from the depths hold up mirrors of symbol and image to reflect what the culture of a given time does not see about itself. Like dreams, myths seek to rebalance the collective psyche by revealing its blind spots.
What are the myths of petroleum, then, and how do they surface throughout its dark history?
Because words are psychic realities with a history, sometimes a long one, a word’s etymology can offer clues about the images and fantasies that inform what the word designates. “Petroleum” goes back to Greek words that mean “rock oil.” “Gasoline” refers to khaos, and “crude,” from the Latin crudus, and to “rough,” “raw,” and “bloody.” “Carbon” has a number of early referents: “black,” “burnt,” “singe,” “fire,” “coal,” “brazier,” and “smoke.” “Derrick” means “gallows” and “hangman.” The vocabulary of petroleum draws us down into a mythology of the Underworld, the place of Pluto, or Hades to the Greeks, the dark death god whose Roman name means “wealth.”
In some mythologies, everything is reversed in the Underworld. To extract petroleum from the depths in order to burn it reverses the great geochemical cycles that built life on this planet. Plants and diatoms that poured oxygen into the air took its carbon down into the earth for safe storage. This cleared the way for other forms of life, including ours. When internal combustion (now there’s a metaphor) releases carbon back into the atmosphere, the wheel of evolution on which all life depends spins backwards toward entropy, degeneration, and death. No wonder Native Californians in the Great Central Valley once used petroleum to make death masks.
Like the disappearing wealth of Pluto, wearer of the cap of invisibility, oil is an unreliable ally and always has been. From the start the dark wealth of Pluto vanished as rapidly as it appeared. In Oil City in Pittsburgh, in Pithole, where brothels sprung up like soiled pubic hair, and in Spindletop, Beaumont, and Oil Creek, the oil ran out as it does today, leaving not a rack behind. In Titusville, named for surveyor Jonathan Titus but recalling the the Roman emperor who headed the Praetorian Guard, destroyed the Temple at Jerusalem, and founded the Colosseum, “Colonel” Edwin Drake drilled the oil that started the first big boom (1859), but he died a pauper. Columbus “Dad” Joiner drilled into a huge East Texas Oil Field and ended up poor on Mockingbird Lane in Dallas, having sold out to millionaire H.L. Hunt. Frank Holmes opened up oil in Kuwait, where bitumen had been used to treat camel mange, but the resulting fortune went to eager companies that followed him there.
In 1870, John D. Rockefeller began a rock oil monopoly from which he built the first true multinational corporation. With methods worthy of shadowy Pluto himself, Rockefeller, who at age seven had stolen a turkey’s chicks to sell them, resorted to espionage, bribery, blackmail, price cutting, extortion, restraint of trade, and outright intimidation to bully Standard Oil’s competitors into joining him or giving up. “It is useless to resist.” In old photographs he looks pale and spectral. Preferring to work behind the scenes, he was seldom viewed in public.
The newspapers soon began referring to his company as “the Monster” and “the Anaconda.” Its tentacles reached into Cabinet and Congress alike. By the 1880s, the Standard Oil Trust controlled 90% of all refining in the U.S., 80% of all the nation’s oil products, and 25% of national total crude output. It used this inflowing revenue to grow longer tentacles and tougher scales.
One of Standard’s opponents, Ida Tarbell, brought forward an interesting mythology herself. Like Athena, she had expressed a wish to God to be single all her life, which she was; her middle name was Minerva, her first, Ida, an echo of Father Zeus’s place of birth. She grew up in Pennsylvania as the first oil boom unrolled. Her father was an oilman forced out of work.
In 1901 she published a series on Standard Oil in McClure’s. No knee-jerk enemy of corporatism as such, she respected oil workers and their companies for wanting to light and power civilization, but Standard’s monopoly represented a threat to humaneness, commerce and democracy. “All sorts of subterfuges and sophistries and slurring over of facts are employed to explain aggregations of capital whose determining factor has been like that of the Standard Oil Company,” she warned the public, “special privileges obtained by persistent secret effort in opposition to the spirt of the law, the efforts of legislators, and the most outspoken public opinion.”
For centuries the struggle of the nations has been to obtain stable government, with fair play to the masses. To obtain this we have hedged our kings and emperors and presidents about with a thousand constitutional restrictions. It has not been possible for us to allow even the church, inspired by religious ideals, to have the full power it has demanded in society. And yet we have here in the United States allowed men practically autocratic powers in commerce.
To fight this kind of plutocracy was to fight for true independence. As the platform of the Union Labor Party declared, “The paramount issues to be solved in the interests of humanity are the abolition of usury, monopoly, and trusts, and we denounce the Democratic and Republican parties for creating and perpetuating these monstrous evils.” That was in 1888.
Standard’s behavior soon set a precedent whose implications are still lethally apparent. The resulting proliferation of trusts formed the first large class of ultra-wealthy in U.S. history. By 1890, 1% of the population held half the nation’s wealth. What followed historically and politically–and ecologically–bled like black tar from that single fateful fact.
After dozens of lawsuits and the weakly enforced Sherman Antitrust Act, Standard Oil was broken up in 1911 into thirty-four companies, but their shares soon doubled in value, in part because the companies continued to operate with the same men in charge. More than 70% of Standard’s business was overseas, most of it as hidden as oil still in the ground.
The world stage was set for the rise of the multinationals, their capture of world politics, and their elevation of Hades to the upperworld.
In keeping with its Underworld mythology, wherever oil flows, death and destruction follow.
In Greek tales, five rivers flow between earth and Tartarus: Acheron (Woe), across which Charon ferried the dead; Cocytus (Lamentation), named for the lost and unburied; Lethe (Forgetfulness); Styx (Hate); and Phlegethon (Flaming), the river that burns but is not consumed. This hellish imagery accompanied oil industry mishaps from the start: river boats jammed, wrecked, or leaking; oil pipes dripping, burst, or broken; pumps too weak; sabotage, fires, smoke, unplanned spills. In 1868, the Phlegethon resurfaced for the first of thirteen fires on Cleveland’s Cuyahoga River, which burned because of oil slicks.
As maimings and deaths continued, pipelines visible and invisible also brought forth more than a century of plutocratic warfare. Standard Oil financed President McKinley and his Spanish-American War. Plutonic reserves stood behind Harding (whose Secretary of the Interior, Albert Fall, took bribes from the Mammoth Oil Company and Doheny’s Pan American Petroleum Company) as well as Coolidge (“the business of America is business”) and Hoover. Their Treasury Secretary, oilman Andrew Mellon, cut taxes, regulation, and oversight on the largest corporations and the wealthiest citizens while expanding the depletion allowance permitting oil and coal companies to deduct deposits left underground from their taxable income. Imagine writing off taxes on what what one choses not to develop.
Mellon also oversaw several oil company mergers and weakened antitrust enforcement while cutting social programs, moves that fed the Great Depression much as later deregulatory policies would expand the Great Recession of 2008-10. Oil companies seeking to block Franklin Delano Roosevelt from election in 1932 were joined by a Republican Party redesigned to defend the expanding American plutocracy. Later, Republicans blocked FDR’s attempts to regulate international oil.
The largest of Standard Oil’s tentacles, Esso (from “S.O.”: Standard Oil; later, Exxon), was headed by John Archibold, the son of a minister and former rival of Standard. Under him Esso went abroad for oil while controlling Congress with a network of bribes. During World War I, fully a quarter of the Allies’ oil came from Esso. Another tentacle, Texaco, sent oil tankers bound for Belgium to Franco’s ports in Spain instead, offering the dictator oil on credit. The Nazis too would benefit from this arrangement with Spain, and from Texaco chief Torkild Rieber’s friendship with Goering and with Niko Bensmann, an oilman who spied for the Nazis. Valuable information obtained by Bensmann from Texaco’s New York headquarters included a detailed assessment of the American aircraft industry. When the story appeared in the New York Herald Tribune, Rieber was forced to resign.
Now under Walter Teagle, Esso/Exxon gave Germany patents for tetraethyl lead crucial for refining aviation fuel and no-knock gasoline. Teagle went farther, holding back synthetic rubber research in the U.S. so the Germans could develop it first. Teagle and the Nazis continued to exchange vital information well after the invasion of Europe. (The U.S. entered WW II when the Japanese responded to FDR’s embargo of their oil supplies by attacking Pearl Harbor, then invading Indonesia in search of more oil.) Senator Harry Truman’s curt assessment of this state of affairs: “Treason.” Teagle resigned in 1942, but not before arranging a secret price-fixing conference at Achnacarry Castle in Scotland between Exxon, Shell, and British Petroleum.
Although not a tentacle of the original Standard Oil, Shell was run by Henri Deterding, a hot-tempered, stateless, and fully committed Nazi. The word was that he was going mad with megalomania. In his memoirs he proclaimed that were he dictator of the world, he would shoot all idlers at site. When he died, Hitler and Goering sent wreaths to the funeral.
Pluto Behind the Wheel
The Nazis also received assistance in the form of automobiles. General Motors helped build Hitler’s war machine through its wholly owned Opel division. The Nazis swept through Europe in GM trucks and cars. Eventually 29% of the well-named Blitz trucks were sold to the German military; the Wehrmacht became Opel’s number one customer. For this James Mooney received the Merit Cross of the German Eagle with Star, an award created for Thomas Watson of IBM, the company providing information technology for the Reich’s programs of racial extermination. Henry Ford would also receive a German medal.
In 1939, in a letter to an objecting stockholder, Alfred Sloan, president of GM, wrote, “The profits which the stockholders have received as a result of its [GM’s] overseas activities have been outstanding.” He added, “…To put the proposition rather bluntly, such matters [i.e., having a conscience about selling arms to the enemy] should not be considered the business of the management of General Motors.”
Back in 1922, nine of ten Americans did not own a car, and nine of ten vehicular trips were made via mass transit. Large cities like Los Angeles and Milwaukee transported people in cleanly running trolley systems so safe that only one of every three hundred million passengers died in an accident.
In the U.S., Standard Oil and Phillips Petroleum quietly partnered with GM as it bought up and dismantled electric rail systems in forty-five cities with covert assistance from Firestone, Mack Truck, and Greyhound. In 1947 the Truman administration sued GM for this, and in 1949 GM was found guilty of violating antitrust laws and conspiring to monopolize the sale of buses and to force them on public transit agencies. Nevertheless, by the 1950s the clean rail lines were gone, and buses spewing toxic exhaust filled increasingly congested streets paved with petroleum products bought at taxpayer expense. In California, councilmen, municipal engineers, and others opposing this in Sacramento, Fresno, Stockton, San Jose, Los Angeles, and Oakland were bought off with free Cadillacs.
One of GM’s front companies was National City Lines. Its subsidiaries enforced racist transit laws: for example, separate buses for blacks, and when not possible, blacks sent to the back of the bus. In December 1955, Rosa Parks was riding a National City Line bus in Montgomery, Alabama, and refused to move to the back.
After WW II, as auto sales exploded, the Secretary of Defense named the road network the National System of Interstate and Defense Highways, later shortened to “interstates.” From 1956 to ‘57, $350 million was spent on highways. The Secretary of Defense was Charles Wilson, president of GM from 1941 to 1952. Some of the highways were inspired by Hitler’s Autobahn.
Wilson became famous for responding to a question about conflict of interest by maintaining that what was good for General Motors was good for the nation. “The difference did not exist. Our company is too big”…to fail.
On the Arabian peninsula, the discovery of petroleum deposits turned King Ibn Saud, whose rigidly fundamentalist slave-owning family depended on income from Muslim pilgrims headed for Mecca and from raiding other tribes, into one of the world’s richest men. Thanks to the cold, dark hand of Pluto, the king’s medievally themed entourage appeared with its sheep flock on the deck of President Roosevelt’s cruiser Quincy. The king who had named a nation after himself gave Roosevelt a collection of swords and daggers and was promised in airplane in return. Churchill promised an armor-plated Rolls Royce.
Having ignored Turkish attempts to extinguish the Armenians, Britain and France worked to topple the Ottomans once oil surfaced in Mesopotamia. Arab nations formerly under Turkish rule were divided up between Britain and France. At first the U.S. was excluded, but eventually Exxon, and then Gulf, Texaco, and Mobile made their way into Iraq. Faced once again with enemies from outside, the Arabs quit fighting each other and organized.
Because the U.S. also supported Israel, the Federal Government quietly but firmly encouraged the oil companies to take over the complexities of Middle Eastern diplomacy. They have run it ever since. The companies are a buffer (or a dam on the Styx) between producer and consumer, citizen and government, like a “thin lubricating film” as Shell’s Sir David Barran put it.
In 1950, the State Department and Aramco decided that oil payments to King Saud were actually foreign tax payments. This “Golden Gimmick” encouraged even more Big Oil control over foreign supplies (in 1951 they had stopped paying taxes on what they invested abroad). By 1952, the Seven Sisters–Standard Oil of New Jersey, Standard Oil Company of New York (now ExxonMobil); Standard Oil of California, Gulf Oil and Texaco (now Chevron), Royal Dutch Shell, and the Anglo-Persian Oil Company (now BP)–controlled all important oil-producing areas, refineries, patents, and refinery technology outside the U.S. and a big chunk of same within the country as well.
Although the Federal Trade Commission found that the Sisters also colluded to keep oil prices artificially high, President Eisenhower, coiner of the term “military-industrial complex,” put antitrust actions against the Sisters on hold due to concerns about unspecified “national security interests.” State, Defense, and Interior called the oil companies “instruments of our foreign policy.” In a year the CIA, encouraged by these companies, pried democratically elected Mohammad Mossadeq out of office in favor of the reactionary Shah of Iran. Iranian oil now lay open to Britain and the U.S. One predictable long-term cost of this maneuver was ignition of a growing Middle Eastern hatred of U.S. interventions for oil.
Matters came to a plutonic head in August of 1960, when the new CEO of Exxon, Monroe Rathbone, decided to deal with a worldwide oil glut by unilaterally cutting prices to ten cents a barrel for Middle Eastern oil. This lead directly to the formation of OPEC, the organization whose four-circle emblem resembles the carbon atom. In spite of this event, economist E.F. Schumacher’s prediction of a worldwide oil crisis went ignored.
Equally predictable, plutonic manipulation of international politics continued. Nixon’s 1968 campaign was heavily backed by oil company contributions. In that year the Department of Justice found that the American Automobile Manufacturers Association (AAMA) had conspired against developing and installing air pollution control devices in cars. (In 1995, GM would pay fines for installing a device on Cadillacs designed to defeat their air pollution control system.) In 1975, Gulf admitted to spending over ten million to bribe officials of foreign governments; it also had provided $100,000 to Nixon’s campaign by laundering the money through a subsidiary in the Bahamas. Exxon admitted to making political contributions in Canada and Italy. During the Middle East oil embargo, Gulf explained that its 91% rise in profits was for energy investment—then tried to buy Ringling Brothers while Mobil went for Montgomery Ward.
Not everyone stood by and watched these shady petrolitics dismantle democracy worldwide. In 1973, Senator Frank Church gave a speech in which he passionately urged Americans to find out what led to their oil dependency and why the U.S. Government had supported the dominance of large oil companies in the Middle East to begin with. “We must reexamine the premise that what’s good for the oil companies is good for the United States.” He too went ignored, especially when the first oil crisis to strike American markets ended in 1974 and citizens promptly went back to buying big cars and houses out in the suburbs.
In 1980, Reagan’s termination of gas price regulations combined with his stacking of the FTC and the courts with big business conservatives to trigger a tidal wave of mega-mergers oiled by dropped antitrust suits. Petroleum companies still smarting from losses through industry nationalization in various countries linked themselves like hydrocarbon chains to increase their available reserves. As Reagan’s FTC and Department of Justice wrote new guidelines (1982) to make these mergers easier, the death of the Crude Oil Entitlement Program left independent oil companies unable to compete. Senator Warren Rudman compared all this to playing Monopoly with real money. In Iraq, Reagan, George H.W. Bush, and James Baker courted Saddam Hussein as an ally. (When removed from power after the second Gulf War, Hussein would complain that the U.S. used to sell him helicopters.)
The 1983 introduction of the futures market for oil at the New York Mercantile Exchange (NYMEX) combined with oil bought from non-OPEC countries and lower demand overall to check OPEC’s ability to regulate oil prices. Energy traders, some working for Big Oil, now set the market price. Instead of being traded on the spot, each deal was pushed into the future. Energy future contracts could change many hands, like the oil they represented, with speculators making money from sales and resales instead of from an actual product. As a result, entire sectors of the world economy went virtual. Large drops in supply could make speculators rich.
In 1984, Standard Oil of California became Chevron, its logo a military insignia reminiscent of an upended vagina. Shell’s logo surrounded itself with an ominous red glow. Mobil’s logo included a red winged horse reminiscent of Pegasus, whose hubristic rider Bellerophon had tried to storm Olympus, only to be thrown to his death. Exxon, which means nothing at all, had considered calling itself “Enco” but found out that in Japanese this word means “stalled car.” Evidently no one thought that the interlinked Xs might be translated as “double-cross.”
According to Global Watch, ExxonMobil spent the 1990s paying millions to hopelessly corrupt President Jose Eduardo dos Santos, thereby allowing him prolong Angola’s civil war to his lucrative advantage in exchange for petroleum extraction contracts.
Ten days after Bush was elected, Vice President Dick Cheney’s secret Energy Task Force met. It comprised executives, lobbyists, and representatives from every major oil corporation. The discussion included the operational details of capturing new sources of oil from rogue states. Iraq was specifically mentioned; plans for the invasion were drawn. The goal was regime change to keep Hussein from selling oil to foreign companies once sanctions were removed by the U.N. Security Council on which sat members from China, Russia, and France, all interested in buying Iraqi oil.
Fear that Hussein would capture the world’s oil supplies drove the U.S. into Kuwait in 1991. Despite an official embargo that brought hardship and hunger to millions of Iraqis, Chevron continued to pay Hussein kickbacks for oil contracts. All this furnished the U.S. Government with an opportunity to strengthen its military presence in the Middle East to the alarm of Arabs who expected U.S. troops to leave after the war. This fact was not lost on Osama bin-Laden. Visas used by Saudi hijackers of airliners on September 11, 2001 offered special privileges to facilitate the trade of oil.
Within a few months of the Iraq invasion of 2002, Big Oil oversight advisers landed on the ground. Soldiers’ bases in Baghdad bore cynically bestowed names like “Camp Shell” and “Camp Exxon.” As Halliburton obtained contracts for oil services restoration, mercenaries went in to protect the Ministry of Oil and other key facilities. One employer of military contractors bore the appropriately plutonic name Blackwater. After the Nisour Square massacre of Iraqi civilians and numerous other bloody battles, Blackwater renamed itself Xe. Was its X an inadvertent nod to Exxon?
In three years 50% of all Iraqi oil flowed to the U.S. Around the world, military base construction routes and deployments closely followed oil locations and transit routes. Case in point: Afghanistan, with the potential for pipelines to Caspian Sea oil and natural gas sources. Forces there would also threaten Iran, the world’s second-largest petroleum supplier.
On November 12, 1999, after decades of banking deregulation, Congress repealed the 1933 Glass-Steagall Act, which up until then had kept apart Main Street banks and commercial financial speculation. This repeal unleashed a wave of derivative marketing that rewarded loan sharks for selling the most vulnerable Americans into a bubble of debt. Additionally, from 2000 to 2002, the energy traders of Enron, whose top officers were George W. Bush’s single largest campaign contributors, drove up the price of electricity in California by manipulating the energy market, costing the state billions, bankrupting California’s two largest public utilities, and closing businesses and putting thousands out of jobs (including loyal employees of Enron).
In 2004, Chevron moved into the vacated Enron building in Houston and proceeded to hire many former Enron energy traders. Morgan Stanley, part-owner of twenty-six oil and gas fields, moved into Texaco’s former headquarters in Purchase, New York. These kinds of energy traders have also multiplied the number of recent hedge funds. Some oil experts claim that energy trading inflates the price of oil 50-100%.
With the escalation of mega-mergers, more than 2,600 in a span of a few years, the price of oil doubled from 1988 to 2000, doubling again in 2005 and again in 2008. Mergers continued through the Bush, Clinton, and Bush Jr. administrations. Since 1999, Exxon had merged with Mobil, Chevron with Texaco, Conoco with Phillips, and BP with Amoco and then Arco to form the largest corporations the world has yet seen. In 2007, according to Fortune, the ten largest global oil companies made $167 billion in profits in 2006 alone. As of 2008, ExxonMobil, Chevron, ConocoPhillips, BP, Shell, and Valero controlled nearly 60% of the U.S. refining market, which was twice what they controlled twelve years before. They also (except for Valero) controlled 60% of the nation’s gas stations.
Today, oilmen are bound together by a world-girdling network of communications, banks, accountants, investment houses, directorships, and oil foundations. Oil money rivals some national economies, constructs fleets of tankers and lavish cities in the desert, lays down miles of tankage and pipes, pays for professional security armies. Oil revenues buy plastics, fertilizers, coal, drugs, alternative energy, and fully half the world’s trade. Even the buildings in which oil companies reside are gigantic: the Gulf headquarters in Pittsburgh, its heights topped by a pyramid; Mobil’s tower in San Francisco; Texaco and Mobil facing off in New York City; BP in London with its own plaza, like the Chevron headquarters in San Ramon, California. The Petroleum Building in Houston, former headquarters to Texaco, once openly flew a skull-and-crossbones flag.
Most oil company profits come from trading, not from selling gasoline. Much of the world’s refined oil sits in storage tanks, its transactions defended as “proprietary.” To take one example of where this leads: in 2006 ExxonMobil became the most profitable corporation in history, earning $39.5 billion in profits in a single year. The company made over $40 million in profit in 2007, which was two-thirds more than Wal-Mart collected. It pumps almost twice as much oil and gas a day as all of Kuwait. ExxonMobil also spends generously: on more than forty front companies and supposed citizens’ groups formed to make global warming evidence seem controversial; on lobbying for further deregulation of highly destabilizing energy futures trading, with $80 million spent on this from 1998 to 2006 (the top oil companies together spent $240 million); and of course on presidential and congressional elections.
All the big oil companies are major campaign spenders, with roughly 70% going to Republicans and the rest to Democrats to keep both parties in check. Big Oil gave record campaign money to the George W. Bush campaigns: $34 million for 2000 alone. It was money well spent. Bush named thirty former energy industry executives, lobbyists, and lawyers to influential posts in his administration; meanwhile, oil companies got Iraq and access to new national lands for drilling, $14 billion in tax breaks and new subsidies (some would consider this flagrant state socialism), and an easing of environmental regulations and controls. Washington’s biggest lobby, the petroleum-supporting Chamber of Commerce, spent $338 in federal lobbying from 1998-2008 and also lobbies ferociously against climate change legislation. Morgan Stanley and Goldman Sachs are also heavily involved in oil, so much so that they founded their own unregulated crude futures exchange. Many of the speculators are former employees of Enron.
Other banks involved deeply in oil include Citi, Chase, and Bank of America. Between 1992 and 2005, the World Bank Group spent over $28 billion on fossil fuel projects.
According to the Center for Responsive Politics, oil companies spent $574 million from 1998 to 2007 on politicians, political parties, and lobbyists, with ExxonMobile was the top spender. Members of Congress who vote against oil industry regulation receive on average four times more contribution money—eight times more for voting for the Iraq War—than those who vote against. Between 2000 and 2007, of twenty-five members of Congress who took the most Big Oil money, twenty-three were Republicans. Together they voted for oil-friendly legislation 86% of the time. Many of these former politicians go on to lucrative post-government jobs. Cheney, Bush, and Condoleeza Rice are all connected with Big Oil; Chevron even named a supertanker in Rice’s honor.
Big Oil control remains firm at the state level too. For example, California sits on 3.5 billion barrels of its own petroleum, the nation’s largest reserves in the ground. The state pumps 612,000 barrels a day, which comes to $27 million a day in oil company revenues. Proposition 87 would have introduced a severance tax on California oil like that of almost every other state. But Big Oil, including ExxonMobil and Chevron, defeated the proposition by convincing voters through front groups that gasoline prices would go up even higher. In the Golden State the top four refiners own nearly 80% of the retail outlets and sell 90% of the gasoline, which is why gasoline prices in California are often the highest in the nation. There is no online resource for letting Californians know how to buy gasoline from an independent oil company.
The front company API (American Petroleum Institute), ExxonMobile, and others also spend fabulous amounts to make climate science doubtful. Under the second Bush administration, Philip Cooney, chief of staff of the Council on Environmental Quality, doctored scientific reports until his scandalous behavior got him forced out, whereupon he went to work for ExxonMobil. Big Oil’s investments in “alternative energy” amount mostly to tar sands and shale. BP’s deceptive name change to “Beyond Petroleum” in 2000 cost the company more than what it spent on renewable energy throughout 1998. ExxonMobile spends nothing on renewables at all but maintains a campaign to sell “tar sands” as “oil sands.” Just one of its offshore platforms generates 214,000 pounds of air pollutants a year.
As Big Oil trades in futures that make the market unstable and the future itself uncertain, $612,500 per minute pours overseas from the U.S. to pay for oil–not counting wars ($6 billion a month in Iraq, $6.7 a month in Afghanistan, $55-96.3 billion annually allocated by the Department of Defense for guarding petroleum supplies abroad), tax breaks ($17.18 billion a year), and grants, research and various programs ($1.7 billion a year). Saudi Arabia doesn’t allow women to drive, vote, or walk the streets without a male escort; gays are tortured and killed there, reformists are jailed or executed, and terrorists like al Qaida receive funding from on high; yet the Saudi government, whose oppressive fundamentalist principles and practices completely contradict publicly stated American values, goes on receiving enormous sums of blood money, Pluto’s own cold currency. With oil subsidy money alone the U.S. could unhook itself from oil dependency and lift itself out of the Underworld.
Petroleum’s Real Costs
Although the amount of oil coming in to U.S. markets has increased, gasoline amounts have declined as gas stations and refineries close, demand rises, and oil companies maintain lower gasoline inventories on purpose. Accidents and spills at aging refineries multiply. Cars on American roads have doubled over the past few decades, but gas stations have declined by a third. Nor are the real costs of oil production borne by the industries responsible. In 1996, for example, road congestion cost America’s top seventy cities $74 billion for 4.6 million lost hours and 6.7 billion wasted gallons of fuel.
Over the past twenty years, the world has seen thirty oil spills larger than the Exxon Valdez. Daily gasoline runoff from streets and driveways soaks eleven million gallons—one Exxon Valdez spill—into American waterways every eight months according to the National Academy of Sciences. The oil and gas industry generates more solid and liquid waste than all other municipal, agricultural, mining, and industrial sources combined.
Other minimum cost estimates for the U.S. alone include $24.3 billion caused byair pollution from motor vehicles, $54.7 billion in healthcare costs, $3-6 billion in reduced crop yields, $1-8 billion in building damage, $1.5 billion in water pollution, and untold ecological costs. (Every gallon of gasoline spews twenty-four pounds of heat-trapping emissions into the air.) Total annual costs to U.S. consumers of oil and auto industry subsidies and externalities comes to at least $128.5 billion a year. At historic parks throughout the country, monuments to its history melt in acid rain.
Health costs remain incalculable. Ninety million Americans live within thirty miles of an oil refinery. These refineries emit millions of pounds of benzene, butadiene, formaldehyde, nickel, lead, sulfur dioxide, nitrogen oxides, and other pollutants. Oil refineries pumped over two hundred and fifty million tons of carbon dioxide into the air in 2004 alone and constitute the second greatest stationary source of greenhouse gases. They are also the largest stationary U.S. source of volatile organic compounds (VOCs): air pollutants that include carcinogens and reproductive toxins that cause leukemia, lymphatic tissue cancers, birth defects, bronchitis, and emphysema. One of the worst, benzene, is a carcinogen dangerous at low levels and easily absorbed by breathing, ingestion, or skin contact. Nearly one in three Americans lives in thirty miles of an oil refinery: per the EPA, within the range of exposure to benzene concentrations in excess of the Clean Air Act’s acceptable risk threshold.
Instead of cleaning up, oil profits fight regulation, undermine current regulations, thwart alternative energy research, and hide how many work-related deaths occur at refineries (possibly as many as six thousand between 2003 and 2005, counting contractors; 2007 set a record for refinery failures). These deaths often occur after repeated safety violations, accidents, maintenance delays, and legal actions. After the Valdez spill, ExxonMobile told cleanup workers they were safe even though oil in the air exceeded federal standards by four hundred times. After failing to report 6,722 cases of upper respiratory infections, the company lobbied to avoid having the spill designated as a cleanup of hazardous waste. BP would emulate these plutonic tactics of deception and secrecy after the disastrous Deep Horizon spill. Chevron alone employs three hundred in-house lawyers and a litigation budget of $100 million annually. It uses four hundred and fifty law firms globally: a necessity for a company responsible for more than ninety active Superfund sites.
Around the world, indigenous people fight for survival against these companies. The Huastecs of Veracruz, the Osages and Poncas of Oklahoma, and the Ogoni of the Niger Delta have all been displaced by Shell. Nigerians of Opia and Ikenyan have been attacked by Chevron-leased helicopters. The Acehnese of Indonesia were fired on by troops under Suharto, and Burmese villagers were tortured and enslaved by a junta supported by Unocal (now Chevron). The Kichwa of Sarayaku, Ecuador, were poisoned by oil drilling performed by ConocoPhillips. The Gwich’in of Alaska and Amazonians have been exposed to toxic waste by Texaco (now Chevron). The costs such people are forced pay include genocide, rape, kidnapping, murder, torture, starvation, illness, interference in local governments, displacement of families and towns, and burning down of villages.
As all this goes on, world temperatures increase, oceans rise, the displaced look for new places to live, and the fate of every species on Earth hangs in the terrible balance. A ride in Charon’s ferry is not cheap.
Running On Empty
Early in the 1970s, scientists at Shell had made a surprising announcement. The world’s supply of oil, they said, would run out, and not later but sooner. Today only one new barrel of oil is discovered in the ground for every four consumed. Offshore drilling remains expensive, releases methane, and turns up new oil only 20% of the time. As for tar sands extraction, Eric Reguly of the Canadian Globe and Mail compares burning clean fuel to make dirty fuel (tar sands oil) with reverse alchemy, like turning gold into lead.
In 2010, oil companies began investing more and more money in natural gas. Why?
According to the Federal Trade Commission, Big Oil has about fifteen years of significant reserves left. The giant dinosaurs of fossil fuel dominance are running out of gas. And they know it. “The black fluid seemed often to be itself the real master,” observed Anthony Sampson in his history of the Seven Sisters, “spurting up and subsiding from bleak corners of the world, teasing the West by its combination of indispensability and maddening inaccessibility.” Shades of vacant Titusville, but everywhere.
Hoarding wealth from below locks world civilization into a scarcity mentality, but sources of replenishable power remain abundant: sun, wind, water, wave. The high-energy party may indeed be over, as Richard Heinberg emphasizes, but alternatives abound: clean and fast bullet trains like those in Japan, France, Germany, and Switzerland, plug-in hybrid cars chargeable on the go, car pools, bicycles, car sharing, trolleys making a comeback, walking, living near work (78% of American commuters already live within twenty miles of work), ecocity and ecotown redesigns, “cradle to cradle” manufacturing operations that recycle waste….
According to a study published in Scientific American (“A Grand Solar Plan”), $10 billion a year would buy the ability to get 69% of our energy from solar power (half comes from coal now). Much of the projected electricity demand over the coming decades could be met by energy-efficient buildings. Simply keeping enough air in car and bus tires could save more fuel than lies under Alaska.
“The devil’s excrement” is what OPEC cofounder Juan Pablo Perez Alfonso of Venezuela called the oily stuff that fuels empires. The Big Machine of unchecked industrialization circulates petroleum for its blood, eats people and places, farts exhaust fumes, and defecates toxic waste and heavy metals. If the history and mythology of petroleum demonstrate anything insightful as planetary ecosystems fail, it’s that running the rivers of Hades up from below makes everything above an Underworld.
Preventing further deterioration will require taking our cue from the resilient natural world. Dependency on a single unreliable commodity? Nature never does it that way, for obvious reasons. What if parasites or predators control the entire supply? What if the conditions it depends on change? What if it fails? Better to evolve maximum diversity, creativity, and adaptation through multiple energy sources and reliable backups. Better to think like a sustainable web of relations. “Fossil” fuels are called such for good reason.
Better also to make of the Underworld a place of initiation instead of a destination. From a mythic standpoint, the terrible giants of Pluto resemble threshold guardians blocking the way forward. Warring on them will not get us initiated. Responding intelligently to the oil-soaked dilemmas with which they confront us just might if we take back our power to fashion desirable communities from the inside out.
In resisting the lure of petroleum we also align ourselves with other gods, other archetypal powers involved in clean energy production: freshing Aeolus, bright Helios, and verdant Gaia, all givers and not takers of abundance, power, and life.
Meanwhile, ExxonMobil has petitioned the U.S. Government for a single-hulled tanker to be allowed to move oil out of Valdez, Alaska. The refurbished tanker’s name is SeaRiver Mediterranean, but its former name outlasts the Lethean waters of forgetfulness: Exxon Valdez.