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Oil giants talk tax to kill environment

Michael Rowney & Renfrey Clarke

21 November 2008

Evidence is mounting of a coordinated global oil industry effort to seize upon the international economic crisis as an opportunity to “rebel” against ecological controls and bludgeon concessions out of governments. 

The assault on environmental and other regulation is being conducted under the cover of complaints about taxation. 

The opening salvo was fired in late October by Chevron CEO Roy Krzywosinski, who told a major industry conference in Perth that he was so angry about the threat of carbon emissions regulations that his company might cut back its Australian operations. 

A more important assault was announced on November 7, when BP’s new CEO, Tony Hayward, announced that BP was shelving plans to develop clean energy technology in Britain and shifting investment to the United States. 

Specifically, BP is terminating its wind power, and carbon capture and storage, schemes in Britain. A BP spokesman told the Times newspaper, “We’re off to the US because that’s the best place to get a strong rate of return”. 

US President-elect Barak Obama has promised to spend $US150 billion over the next 10 years to initiate a major renewable energy industry in the US. The oil companies have taken an intense interest in this because, under US tax law, they can offset oil profits against investment in renewables. 

Worldwide Fund for Nature spokesperson Keith Allott described BP’s departure from Britain as deeply disappointing. “It seems incompatible with the company’s previous positioning of moving beyond petroleum”, he said. 

The attitude of the oil companies towards environmentalists was expressed succinctly by oil industry journal PetroleumNews.Net: “Oil industry leaders have decided that low prices represent a perfect time to tackle the environmental lobby which has emerged in the western world as a major threat to future oil sector profits.” 

The oil industry has long been notorious for resisting environmental strictures on its operations. After the United Nations began addressing climate change issues in the late 1980s, the oil majors — BP, Amoco, Shell, Exxon, Texaco and Chevron — were among numerous energy and vehicle corporations to form the oddly named Global Climate Coalition (GCC). 

The GCC was described by the Sourcewatch site as “one of the most outspoken and confrontational industry groups in the US battling reductions in greenhouse gas emissions”. 

No doubt sensing that these efforts would eventually discredit them with an increasingly climate-aware public, most of the oil corporations quit the GCC in the late 1990s. The organisation was finally disbanded in 2002. 

But the world’s largest publicly listed oil company, Exxon-Mobil, continued to fund climate-change-denier think-tanks and publicity bodies. In May 2007, Greenpeace USA reported that in the previous year Exxon-Mobil had “spent $2.1 million on 41 groups who are leading the climate skeptic industry”. 

For a time, BP followed a different strategy. After quitting the GCC in 1997, it rebranded itself as “beyond petroleum”, acquiring a renewable energy arm and a new “exploding sunflower” logo. 

The lure of fossil-fuel profits, however, eventually led BP to cast off its green sheen. In December 2007 the firm entered a joint venture to extract bitumen from the Athabasca oil sands in northern Canada and refine it into vehicle fuels. 

These processes are highly polluting. The British Independentreported last December 10 that producing a barrel of oil conventionally involves releasing about 29 kilograms of CO2. For one barrel of tar sands oil, the emissions can be as much as 125 kilograms. 

In a more recent development, BP Solar announced on November 19 that it would close its photovoltaic cell and solar panel plant in Sydney, with the loss of some 200 jobs. “The closure means Australia’s solar industry is now a research and supply sector rather than a contributor to manufacturing”,Renewable Energy News reported. 

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