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Robert Creamer

On 5th Anniversary Week of BP Disaster – Another Oil Industry Trick to Keep America Addicted to Oil

On this fifth anniversary week of the disastrous BP oil spill into the Gulf of Mexico, it becomes clearer and clearer that oil spills are just the tip of the iceberg when it comes to damage the oil industry is doing to our one and only planet.

The Gulf -- and its economy -- is still recovering from the BP catastrophe that shot over 200 million gallons of oil into this critical and fragile eco-system. It caused unfathomable damage to wildlife, fisheries, the coast-line, and tourist driven economy of the region.

BP Chairman Jack Gerard declared the event a "rare incident", even though, as Americans United for Change explained in a TV spot earlier this week, there are a reported 14,000 oil spills reported each year in the United States.

And let's recall that the immediate damage to our environment pales in comparison to the long -term damage being done by the daily discharge of massive quantities of greenhouse gases that result from the uses of most oil based products.

You might ask yourself, if these oil companies simply want to sell energy, why should they care if you're buying oil or something else -- why not switch to producing a clean, renewable alternative? We know -- after all -- that even with oil at this year's lower prices, there are many alternatives that are just as efficient and massively cleaner.

The reason is simple. Big oil companies, both private and government owed, control oil fields containing billions of barrels of oil that are worth trillions of dollars.

BP itself estimated last year that the world had about 1.7 trillion barrels of reserves (of which the U.S. has about 44.2 billion). Even at today's relatively low oil price of $56.4 per barrel, those reserves are worth $95.1 trillion dollars.

Anything that threatens to prevent the oil companies from selling those 1.7 trillion barrels of oil -- or that reduces demand and therefore the long term price of that oil -- costs those oil companies literally trillions of dollars over the next 50 years.

That's a very good reason why most oil companies don't do a lot to promote alternative, renewable alternatives.

It is a very good reason why oil companies spend a fortune to defeat bills that put a price on carbon -- like the cap and trade bill that was proposed by President Obama and passed the House early in his administration.

It is the reason oil companies are trying to eliminate the renewable fuel standards that require the use of renewable alternatives and have spawned a domestic ethanol industry.

But you might not know, it's also a reason why the oil industry does everything in its power to strong arm gas stations not to sell gasoline blends that have more ethanol than the law requires.

Right now, for instance, a battle is raging in the Chicago City Council over an E-15 ordinance that would prevent oil companies from blocking the gas stations that sell their products from offering fuel that contains 15% ethanol -- which has a third more ethanol than the E-10 fuel that is now available.

E-15, works fine in most cars and ethanol can be produced more cheaply than gasoline. Ethanol also happens to burn much more cleanly than gasoline and emit much less carbon into the atmosphere.

And here's the thing about those huge oil reserves. Not only do the oil companies turn them into trillions of dollars of income -- when that oil is burned it turns into 21.3 billion tons of carbon dioxide each year. Only half of that carbon dioxide is absorbed through natural processes in nature -- and the result of that is massive climate change.

It is obviously in the self interest of every person on the planet -- except the tiny number who own that oil wealth -- to convert as rapidly as possible from dirty, climate changing fossil fuels to clean, renewable energy alternatives. But that's not at all in the financial interest of big oil.

For instance, if without even buying a new car, consumers can buy fuel that is 15% ethanol instead of only 10% ethanol, they would be buying fuel that has 5% less gasoline made from oil. That is worth huge sums to the oil industry.

Worse yet from the oil company's point of view, every day that goes by brings us closer to the day when alternative, clean, renewable energy sources begin to drive down demand and ultimately supplant oil altogether.

The oil companies have every incentive in the world to sell as much of those reserves they have under the ground as they can, while they can -- and to prevent the development of alternative technologies which will drive down demand -- and hence the long term price of their reserves.

In the 1970's and 80's the oil companies wanted to restrict output and drive the price as high as possible. OPEC helped assure that supply never was so high that the price of oil fell too far. Now they face a different economic reality.

High prices made it economical for oil companies themselves to invest in new technologies like fracking that dramatically expanded supply and impacted price. And those same higher prices made it economical to develop and bring to scale alternative technologies that compete with oil altogether. That's the last thing oil companies want.

That's why the biggest oil producers have decided that living with lower per barrel prices today is better than watching their market share in the oil market itself -- and the energy market as a whole -- decline over time.

But they still have two problems.

First, many jurisdictions have renewable fuel standards that require that a certain percentage of a given energy mix be produced with cleaner, renewable fuel.

Second, many alternative fuels are now just as cheap as oil, even at the current prices. So what to do?

Use brute political force to repeal renewable fuel standards and monopoly market power to prevent your distributors, like gas stations from selling renewable products.

Oil companies have been engaging in a massive campaign at all levels of government to accomplish those ends. That's the reason why it's so important that their desperate attempt to stop the Chicago City Council from interfering with their strong-arm tactics with gas station owners is such an important test.

If in the next few weeks, the Chicago City Council votes to allow the sale of E-15, it will be an example for jurisdictions around the country. And it won't stop at E-15.

The Chicago battle is just one front in a exploding war to stop big oil and end the hydrocarbon era before it destroys our climate -- and hobbles our economy.

Each one of the growing number of local battles is part of that larger struggle.

A victory in Chicago will be just one more crack in the oil industry's armor. And as the number of cracks grows, that armor will ultimately collapse and usher in qualitative change. It's up to us to make sure we're not too late.


Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on He is a partner in Democracy Partners and a Senior Strategist for Americans United for Change. Follow him on Twitter @rbcreamer.

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