By Staci-lee Sherwood
In 1859 the first successful well was drilled in Titusville, PA. Col. Edwin Drake had made a remarkable discovery, one that would change the world forever. He found crude oil, Black Gold. Up until then coal was king but now there was a shiny gooey new toy on the market and everyone wanted a piece. Who could have known all the uses, all the destruction and all the wars this substance would cause. The history of oil and all the wars and crisis that incurred because of it go back more than a century. The past 50 years is more than enough to show we have been warned over and over the day of reckoning was on the horizon.
Crude oil is often referred to as a ‘fossil fuel’ and many think it’s extracted from dinosaurs. It’s not from dinosaurs but it does take a long time for nature to produce. As geologist Reidar Müller from the University of Oslo explains “oil comes from trillions of tiny algae and plankton,” says Reidar. “When algae and plankton in the sea died, they sank to the sea bottom,” he said. These residues accumulated in thick layers on the sea bottom, and over time were covered with clay and sand. The temperature was between 60 and 120 degrees C and the pressure from the weight of all the sediments ‘cooked’ the algae and plankton.
The oil that resulted trickled out of the layers and flowed upwards until it hit a dense rock layer. The rock layer acted as a lid and this is what oil companies drill through to reach the oil.
Crude oil is considered a finite source because we no longer have the millions of years to wait for nature to produce it. Back then there was less oxygen in the water and the marine animals that feed on plankton did not exist. For these reasons it’s considered a finite source and one that is bitterly fought over.
US energy policy dictates and overrides environmental, labor, economic, military and national security policies. It has been the cause of many global military interventions and one of the main reasons we are still in Iraq. We often seem on the verge of war with Iran and cower to the whims of Saudi Arabia. Our public land is being cleared to make way for more oil exploration, our wildlife is being exterminated and oil spills are being covered up....don't think this is happening? Take a good look around you.
Oil companies are notorious for inflating their success in cleanups. Truth is cleaning up a liquid from a liquid is all but impossible, only slightly easier when the spill is on land. Cleanup success hinges on timely competent action which is almost never the case. It’s not always possible to know the moment a spill/leak accident takes places. No sooner does a spill happen then the blame game start. Invariably the oil companies start pointing fingers to everyone else but themselves. Lawsuits then ensue to delay cleanups and fines. At this point it’s been weeks sometimes years before anything gets done.
Oil spill cleanup is a scheme of word play. Most Americans want to believe this is possible but they are deluding themselves and worse giving credit to companies openly lying and defrauding them. The only real cleanup comes when oil companies get a pass and are not held accountable. Even if they eventually pay a fine the damage is already done. Changes are never made despite their propaganda spin. All pipelines leak yet they are still allowed to be built and used. You couldn’t keep track of every oil drilling or fracking spill yet they are allowed to continue to operate much the way they always have. If they weren’t lying about safety measures these accidents wouldn’t keep happening. No one holds these behemoths accountable. Oil, from cradle to grave, affects every human on the planet. There is no way to avoid it.
The people are the ones who:
pays in healthcare cost from exposure to contamination
pays in loss of public land use after contamination
pays in toxic drinking water
pays in land no longer safe to grow food on
pays when oil companies refuse to pay fines
pays in loss of biodiversity in wildlife and plant life
50 years of warnings
The first big warning of a gas crisis came in 1973 when OPEC (Organization of the Petroleum Exporting Countries) declared an oil embargo. It lasted 5 months with the price of oil per barrel rose over 300%. The second gas crisis was in 1979 when oil production dropped in Iran due to their political revolution, we were involved in that mess as well and not on the winning side.
Our desperation to get oil was so bad that in 2004 declassified British government documents revealed that the US had considered a military seizure of Middle Eastern oil. Yes you read that right. These documents show concern, in 1973, over a conversation between U.S. Secretary of Defense James Schlesinger and Lord Cromer, the British ambassador to the United States. Schlesinger told Cromer that “it was no longer obvious to him that the US could not use force.” Schlesinger was vocal about using the military to secure oil. Little has changed our view since, we still consider ourselves entitled to anyone’s oil and have been involved with many military actions because of it.
In 1980 the US shifted their alliance from Iran to Iraq. War between the two was coming and an ally was needed. After the hostage taking in 1979 the US was embarrassed by Iran and sought vengeance. We helped arm Iraq but the ‘friendship’ did not last.
After a car bombing in 1983 in Beirut we sent in troops to Lebanon. On the outside it was sold as backup to support Israel who invaded them in 1982. Our real interest was to maintain enough stability in the region to keep the oil flowing. Despite our allegiance to Israel our real priority was oil. Lebanon is still in political turmoil and often used as an unofficial training ground for terrorist groups like Hezbollah. At the time we imported half our oil from neighboring Saudi Arabia. We just couldn’t have that instability spill over.
In 1990 we started Iraq war part 1 aka the Gulf War. Despite the promise of shock and awe the only shock was how the public thought this would help our growing oil crisis. When Iraqi leader Saddam Hussein invaded Kuwait we were stunned, and scared. Hussein’s intentions were to take control of Kuwait’s oil reserves and expand his power. We couldn’t let that stand. We bombed Iraq for months and the crisis came to an end, for a while. In retaliation for being forced out of Kuwait, the Iraqi military set hundreds of fires to the oil fields. The fires burned for ten months. It is estimated that more than one billion barrels of crude oil was lost causing oil prices to surge.
Oil fields burn in Kuwait
In 2001 we had the second and final attack on the World Trade Center. We all remember the videos of the twin towers imploding. The perpetrators were from Saudi Arabia, still an important oil trading partner. We needed them to be an ally. The bombers fled to Afghanistan. At the time US policy was to look for them in Afghanistan but also to invade Iraq under the premise of weapons of mass destruction. None of the allegations made to justify invading Iraq were true. Most knew that at the time though much of the media was persuaded to not investigate the White House ‘sources’. Everyone knew this was about oil…..again.
By 2002 the US was engaged with O.I.L. (Operation Iraqi Liberation). The justification was thinly veiled excuse to once again attempt to secure oil for years to come. The inside joke among military was the acronym OIL. In 1993 the first attack on the WTC occurred with a car bomb. Islamic fundamentalist took credit saying they hated western values and materialism among other complaints.
Many look back and think it was a dry run to see what works and hammer out the kinks. Perhaps the deeper hatred of western values stems from how we prize oil above most everything else, to maintain our consumer driven culture and dominance on the world stage. We have been meddling in the affairs of oil rich countries for decades. We glaringly ignore most of the human rights violations that occur around the world unless that country has valuable resources for us. What happened in Rwanda comes to mind. Look at what countries we choose to send troops too or don’t. Maybe this is what drives much of the hatred.
In 2004 a MOA (memorandum of agreement) was struck between China and Iran and signed in 2007. China is no friend to the US and will one day be the next world power. Russia too made deals with Iran starting with proposals in 2014, though they might have started years earlier. In July 2022 Russia and Iran signed an oil and gas trade deal worth $40 billion.
Now that Russia has invaded Ukraine, again, this has caused global concern about oil production. As the war rages on Europe has vowed to ditch Russian oil as a moral objection to the invasion. This makes them a bigger competitor on the world market with our trading partners. Oil producers sell to the highest bidder whoever they are. With more competition that raises gas prices and the cycle begins.
It might surprise most Americans where we get most of our oil from. Canada, our quiet northern neighbor, is our biggest trading partner with about ½ our oil coming from them. We do get oil from the Middle East but a small amount and not enough to fuel our economy. Why all the interest in the area if we’re not dependent on their #1 export? Until the early 1980s most of our oil did come from Saudi Arabia then Canada eclipsed that. Other players came on the scene like Venezuela and Mexico so we started to diversify more. Saudia Arabia is still the world’s largest exporter of oil with Russia being the second.
Involvement in the Middle East has always partly been about Israel and global relations but it’s also about oil. When they say jump the world asks how high. When they have instability it affects the global market and when they raise or drop their price or production that has a global ripple effect. We may not be as dependent as we used to be but trading partners come and go and things can change on a dime. We can’t afford to make enemies, as long as we remain addicted to oil. Drilling at home could never fully supply our demand. Voluntary conservation methods have failed, even the slightest of regulations is met with lawsuits, industry threats and propaganda. Fear keeps the public in line.
Ironically if oil companies shifted to cleaner sustainable sources they would have the same customer base because energy is needed regardless of who supplies it. They might even make more money since they wouldn’t be spending millions on lawsuits, fines and cleanups. One of the biggest obstacles this country faces in getting off oil is the fear everything will suddenly go dark without oil to power our lifestyle. Change would come in a slow transition and the phase out would take years. The fear the industry stokes has caused the country to make itself vulnerable to foreigners agenda while destroying our own land in a desperate attempt to find more oil. We have the ability to change that but lack the will.
In 2022 the US still has 2500 troops in Iraq just to keep an eye on things with no immediate plan to leave. At no point in 50 years did the government ever look at the gas lines, bombings and invasions and think gee we need a cleaner safer source of energy. We had a chance to start back in the 1970s to get off oil. We had years to slowly pivot to sustainable energy sources. If we had come up with sustainable clean energy at any point we would be more insulated from political instability and surging oil/gas prices and a true world leader. For an excellent timeline of our history with oil click here
My statements to the Bureau of Land Management regarding drilling in ANWR & Willow project 2021 & 2022
Oil companies & taxes
If the wars, political upheaval and earthly contamination aren’t enough incentive to get off oil, how about the tax credits and subsidies? Oil companies are allowed to defer payments, sometimes for years. They also get tax credits in the United States for taxes paid to foreign nations where they produce crude oil. In 2021 the largest companies raked in profits over $174 billion. It is estimated their end of the year profits for 2022 could be higher. Depending on who one talks to, and believes, oil companies pay anywhere from 11 – 50% in taxes when factoring in subsidies. The taxpayer and citizens pay for those subsidies and the cost of ‘cleanups’ and lawsuits is passed onto the consumer.
Here are direct subsidies
Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically.
Percentage Depletion (26 U.S. Code § 613. Active). Depletion is an accounting method that works much like depreciation, allowing businesses to deduct a certain amount from their taxable income as a reflection of declining production from a reserve over time.
Credit for Clean Coal Investment Internal Revenue Code § 48A (Active) and 48B (Inactive). These subsidies create a series of tax credits for energy investments, particularly for coal.
Here are some indirect subsidies
Last In, First Out Accounting (26 U.S. Code § 472. Active). The Last In, First Out accounting method (LIFO) allows oil and gas companies to sell the fuel most recently added to their reserves first, as opposed to selling older reserves first under the traditional First In, First Out (FIFO) method.
Foreign Tax Credit (26 U.S. Code § 901. Active). Typically, when firms operating in foreign countries pay royalties abroad they can deduct these expenses from their taxable income.
Master Limited Partnerships (Internal Revenue Code § 7704. Indirect. Active). Many oil and gas companies are structured as Master Limited Partnerships (MLPs). This structure combines the investment advantages of publicly traded corporations with the tax benefits of partnerships.
Domestic Manufacturing Deduction (IRC §199. Indirect. Inactive). Put in place in 2004, this subsidy supported a range of companies by decreasing their effective corporate tax rate.
Click here for more information https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs#1
We know there is little to no accountability in reality and we know the health and environmental damage. We know every time there is a crisis they rake in record profits. Isn’t it time to look for companies with both ethics and sustainability instead of the same old status quo? Our day of reckoning is coming we have had 50 years of warnings it’s time we acted.
Please click below for part 2 of the series
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Please click below for part 4 of the series
Also published on The Good Men Project September 12, 2022 https://goodmenproject.com/featured-content/oil-addiction-will-be-our-demise-pt-1-50-years-of-warnings-kpkn/