BP is beyond the pale

The oil corporation BP likes to brand itself as “beyond petroleum”. Beyond the Pale might be more appropriate after the latest of a series of disasters which the company has to take responsibility for.

Four hundred species of sea life, from turtles to shrimp and octopus, plus miles of coastline, ocean and wetland, hundreds of homes, beaches and livelihoods are threatened by a massive oil slick heading towards the Louisiana coast.

A week on from the explosion at the BP-operated Deepwater Horizon rig, which killed eleven workers and fractured underground pipes, the oil is gushing at a rate of 42,000 gallons a day. It could prove to the be the worst oil leak since 1969.

It is only 20 miles from the Mississippi Delta, an area that contains 40 per cent of all the wetlands in the United States. It covers an area of 2,138 square miles. It will arrive sometime on Friday, or sooner, it is said.

Attempts to halt the flow which is 5,000 feet down have failed, and so oil is now being coralled behind floating barriers and set on fire. It could take weeks to find a way of blocking the pipe.

A federal investigation is being launched into this latest disaster involving BP. In 2005, 15 people were killed at a BP oil and gas plant in Texas, and in 2006, BP was responsible for the biggest-ever oil leak in Alaska, damaging wildlife and the fragile eco-system of Prudhoe Bay.

In spite of that, BP was one of the corporations who lobbied successfully against new, fairly modest proposals for safety regulation of off-shore drilling. In September 2009, vice president for Gulf of Mexico production Richard Morrison, wrote: "We are not supportive of the extensive, prescriptive regulations.” He claimed that voluntary codes of practice "have been and continue to be very successful”.

And so it was with this same hopeless system of self-regulation in force that the Obama administration recently issued licences for extensive new oil exploration and pumping in areas formerly off limits for a whole range of safety and environmental reasons, including in the Gulf of Mexico.

Every time a disaster like this takes place, hands are wrung, crocodile tears shed – but then it’s back to business as usual. Because such events are not aberrations – they are the normal working of the profit-driven oil industry which has as its priority to get the stuff out of the ground as quickly as possible, whatever the effects.

The Piper Alpha disaster in the North Sea in 1988 remains the biggest ever loss of life in the oil industry, when 167 people died when the rig caught fire. The recommendations of the Cullen Enquiry that followed have never been fully implemented.

As the oil runs out, what is left becomes harder to get at and the pressure for profit forces operators to keep costs low and put safety a long way second. Governments shy away from introducing tough regulations because they live in fear of the global corporations, especially the energy giants like BP.

The only way to resolve this issue is to recognise that the products of the earth cannot be treated as a free-ride for carpet-bagging capitalists and must be taken into common ownership. The whole decision-making process about what is extracted, what methods are used and for what purpose has to come under social control.

Penny Cole

Environment editor

Planet pays the price for energy crisis

As the energy crisis deepens, global capitalism is scraping the bottom of the oil barrel, leaving behind ruined land and communities. Climate change campaigners occupying farmland earmarked for open cast mining in the Derbyshire countryside are highlighting one key aspect of this.

The “Leave it in the Ground” campaign has moved on to a 122 hectare site owned by UK Coal, which plans to extract 1m tonnes, but will no doubt aim for more once they get going. That is what happened at Stobbswood in Northumberland, where the original permission covered 1,500 acres for 15 years up to 2004. Extraction is only now coming to an end, with communities suffering years of coal dust, noise pollution and giant machines rumbling through their villages day and night.

Coal companies always claim they will restore the land but that is not the experience of people in Greengairs in Lanarkshire where an open cast mine was turned over to become Scotland’s biggest landfill. Their village was left on the edge of a stinking waste dump, and designated an “area of sacrifice”. Now a huge incinerator is planned to add to the pollution.
This is the story right across the world. Governments support coal companies to override community opposition. In Bangladesh, protests against open cast mining by Asia Energy at Phubari were initially successful but now the military-backed government plans to give the London-based company the go-ahead.

And an even filthier form of extraction is on the rise, as oil sand extraction becomes economical. Oil sand is a mixture of clay, sand, water and bitumen, with an estimated 2 trillion barrels of oil available from massive deposits in areas such as Alberta, Utah and the Orinoco Basin. Currently, tar sands represent about 40% of Canada's oil production, and output is expanding rapidly. Around 20% of U.S. crude oil and products come from Canada, and a substantial amount comes from tar sands. Whole areas are strip mined, and then a costly and polluting recovery process extracts the oil deposits. Two tons of sand produce just one barrel of oil and the extraction process uses vast amounts of energy, chemical solvents and water.

The question is can the planet survive capitalist energy markets? This week George Bush asked Congress to lift the decades-old ban on oil extraction in the Alaska wilderness. Now there is a drive to pump CO2 into spent oil fields, including in the north sea, to make the “dregs” accessible. Greenpeace warns that the risks of ecological damage are incalculable, and that in any case the retention time in the ocean is too short for it to be worth doing. Our prediction: the oil companies will soon be trying to get projects to pump waste CO2 into dying oil fields registered for subsidy under the Clean Development Mechanism.

Meanwhile the British government is planning to allow construction of eight giant coal-fired power stations, including the one at Kingsnorth in Kent which will emit around 8m tonnes of greenhouse gas a year. And to fuel it, the drive for strip mining will increase.

We have not even touched here on the issue of uranium mining, the most dangerous, polluting and health-damaging of all. Prime Minister Brown last week repeated his megalomaniac dream of a UK economic boom based on building a world-wide network of nuclear power stations. He also repeated the crazy offer of bribes to local councils agreeing to bury nuclear waste (in the town hall cellars presumably).

Yesterday the energy companies confirmed that domestic fuel prices will increase by up to 40% over the winter – whilst at the same time Alistair Darling was urging wage restraint (not on the bosses of the energy companies, obviously).

The growing contradiction between the market measures to meet capitalism’s energy needs, and the survival of ecology, human life and livelihoods, is now creating volatile social tensions. We need to strengthen the survival side of that contradiction, and create energy plans that prioritise the needs of people and planet – not profit.

Penny Cole
Environment editor

The real costs of the price of oil

The price of a barrel of oil reached and passed $115 yesterday. It has doubled in a year. As the price of oil goes up so must everything else, as everything that is produced, distributed and consumed depends on it in some way. The higher the price of oil goes, the deeper will be the global economic slump.

There are many reasons for the soaring price of oil. Despite attempts to stave off financial meltdown, banks are failing and the US economy is diving into recession. The value of the dollar is falling against other currencies, so speculators are looking for safer options, like gold, food and oil. The more they exchange dollars for commodities, the faster the dollar falls. The pound sterling is falling for similar reasons. The lower the dollar, the higher the price of oil. It’s a vicious spiral.

In a period of inflation, many price rises aren’t due to an increase in their value – which is measured by the real cost of production – but by the falling value of the money in which the price is expressed. But for oil the situation is different. The oil companies are finding it more and more difficult to extract. The cost of production is increasing. So the value is increasing as well. And that contributes to the sharply increasing price.

As the oil price feeds through into other products, the effect is to dampen consumer demand even further. Think about it. US consumers already began to run out of credit in 2005. That triggered the mortgage crisis and a lot more. Thousands of stores are now closing, taking their suppliers and hundreds of thousands of jobs with them. The closure by JJB of 72 sports shops with the loss of 800 jobs is a sign that the crisis is now hitting the UK. Meanwhile, investment bank, JP Morgan is predicting that the credit crunch could cost up to 40,000 jobs in London’s financial services sector during 2008 and 2009, further cutting purchasing power.

All this is against the background of “peak oil”, as production peaks and begins to fall. Earlier this week Leonid Fedun, vice-president of Lukoil, said that last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime”. Russia is the world’s second biggest oil producer. Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically. Because the entire capitalist economy depends on oil, and there is no substitute, in an editorial entitled “Preparing for the age of peak oil”, the Financial Times is pushing to offset the decline in output urging Russia to “press on with privatisation of state-controlled assets”.

Movements like the Transition Initiative are on a different track. It is a fine, rapidly-growing movement focusing on unleashing the creative genius of communities to discover ways to reduce energy use to overcome falling oil production and climate change. So far, however, it has sidestepped the corporate ownership of oil and the capitalist, for-profit pressure to maximise its extraction and use. Reducing the reliance on fossil fuels depends on them ceasing to be exploited for profit. And that means bringing the era of capitalist corporations to an end through a process of democratising their ownership and control.

Gerry Gold
Economics editor

The great unravelling

“Housing market faces big slowdown” reports the Financial Times, while today’s Daily Telegraph main headline is “Fastest rise in food prices for 14 years”. These are not unrelated stories but are further indications of the great unravelling that is occurring in the major capitalist economies and financial system.

In ten years, house prices in Britain have gone through the roof (pardon the pun), rising by 300-400% depending on the region. This unsustainable inflation was fuelled by low interest rates, mortgage loans five, six or more times annual income, a shortage of new affordable home both to buy and rent and, in general, a belief that the sky was the limit. In this dream-like world, vast numbers of people remortgaged against the increased “value” of their property to buy consumer goods and thus keep the global economy ticking over.

This process was an expression at a personal level of what was taking place at macro-economic level. For 30 years, global corporations have borrowed heavily to finance their expansion/mergers/takeovers. In turn, this gave rise to a new global financial system where money could apparently beget even greater sums of money by sheer electronic manipulation. It was as if the Middle Ages alchemist’s promise of turning common metals into gold had at last become possible. The “share” that fell to ordinary people came in the form of credit (meaning debt) to buy more of the goods that the corporations were turning out.

Which brings us to the Daily Telegraph story about food prices. They are increasing at their highest rate for more than a decade, according to official figures released yesterday. Food factories are having to pay 6% more for their raw ingredients than a year ago - the highest annual rate since 1993, says the government’s National Statistics office.

A survey by the website mysupermarket.com, which compares prices across online supermarket chains, found that the three biggest - Tesco, Asda and Sainsbury's - are charging their shoppers 12% more on average for a basket of 25 staple goods compared with last year. That equates to an annual increase for most families of about £750. A kilo of peas has gone up from £1.19 to £1.79 at Tesco, a dozen eggs at Sainsbury's has leapt from £1.62 to £2.35, while Asda has increased the price of its orange juice from 73p a litre to 88p. The cost of a pint of milk has reached an all-time high of 33½p and sliced bread costs a record £1.20 in big stores.

Driving food price inflation is climate change – itself a product of unsustainable capitalist growth - combined with rising fuel prices. Global warming has produced a drought in some key crop growing areas, notably in Australia and the United States. Adding to grain shortages is the turning over of crop land from growing for food to production of raw material for ethanol and other biofuels. In addition, whole areas of former farmland in China and India are being given over to manufacturing and service industries, leading to greater pressure on world supply. Fuel costs have soared as the price of oil reaches nearly $100 a barrel. This in turn is a reflection of the falling value of the dollar, in which oil is priced. The dollar’s devaluation is absolutely connected to the fact that the United States has lived on borrowed money for several decades.

The impending collapse of the housing market combined with rampant inflation will devastate millions of lives. Alternatives to the crazed world of the market economy are urgently required. A House of Cards – from fantasy finance to global crash has some viable proposals. Why don’t you check them out?

Paul Feldman
AWTW communications editor

Underwater imperialism

The results of melting ice caps may terrify the rest of us but for the oil corporations and their client governments there is a silver lining – the opportunity to drill for deposits previously inaccessible below the permafrost. This summer’s Arctic ice cover was the thinnest ever recorded. Researchers say there could be ice-free Arctic summers by 2040.

The result is an obscene rush by countries to secure rights to new fisheries, transport routes, oil, gas and mineral resources which have become accessible as a result. The US Geological Survey estimates that a quarter of the world's unexploited fossil fuels lie in Arctic areas. In a ludicrous stunt in August the Russian government sent two mini-subs and a group of intrepid explorers to plant a rust-proof titanium flag on the seabed 14,000ft below the North Pole to “claim the territory”. Then they released a video claiming to show the event, which turned out to be a scene from the film Titanic!

"This isn't the 15th Century," said Canadian Foreign Minister Peter MacKay. "You can't go around the world and just plant flags and say 'We're claiming this territory'” Yet his government is in dispute with the USA over rights in the North-west Passage. Norway and Russia are in dispute over the Barents Sea. Canada and Denmark are competing for ownership of a small island off Greenland, and Denmark is claiming the North Pole for itself.

Down at the other end of the planet, New Labour is joining this underwater imperialism. It emerged this week that the government is planning to claim sovereign rights over a vast area of seabed off Antarctica. The Foreign Office is preparing a submission to the United Nations covering more than a million square kilometres of seabed around Ascension Island, off the British Antarctic Territory, and around the Falkland Islands and South Georgia. Britain is actually one of 39 signatories to a 1991 treaty that established Antarctica as a world park, with a 50-year minimum prohibition on mineral exploitation. And Britain is also not beneath a little nationalistic stunt. The British Antarctic Territory, first claimed in 1908 (on what basis it is hard to imagine) is a triangle of land covering 666,000 miles from the south pole. It plans to mark its centenary next year by issuing its own legal tender coin.

Flags, coins – if it wasn’t so dangerous it would be funny as this great little video from Greenpeace shows. But the terrible reality of the economic system that dominates planet earth is that the melting ice is actually seen as a positive benefit, as a new area for profit making. What we need to do is to save the planet not so much from climate change as the social system that is driving a whole series of inter-related crises. Territorial wars, hunger, species extinction, the destruction of habitats and the lives of indigenous people – the list is of threats produced by global capitalism is endless. We need to get shot of them before they get rid of us with their mad cap plans.

Penny Cole
AWTW Environment editor

Iraqi unions threaten 'mutiny' over oil law

The struggle over future control of Iraq’s oil is coming to a head, with parliament deeply divided over American proposals designed to benefit the major corporations and the country’s trade unionists vowing to resist any foreign takeover. It adds to the deepening crisis engulfing the US-UK four-year occupation of Iraq. Among Americans, sentiment against the Iraq war is at its highest level ever at 76% while the so-called surge of US troops has made no difference in terms of stability and security. Behind the invasion was the dream of privatising Iraq’s state-owned oil industry and opening up the world’s third largest reserves to the global market. Like all the other fantasies concocted by the White House, the notion of easy control of Iraq’s oil has also come up against harsh reality.

Despite attempts to keep the parliamentary process hidden from view, more and more Iraqis are coming to realise the purpose behind a law drafted in Washington before the invasion even took place. The long-sought "hydrocarbons framework" law would give Big Oil virtually unrestricted access to 80% of Iraq’s reserves. According to leaked documents, Iraq stands to lose billions of dollars in oil revenue. Meanwhile, a parallel law carving up the country’s oil revenues between the different regions will add to the sectarian and ethnic divisions that have appeared since the overthrow of Saddam Hussein.

Trade unionists are the most powerful group opposing the carve-up. Subhi al-Badri, head of the Iraqi Federation of Union Councils, said recently: “This law cancels the great achievements of the Iraq people. If the Iraqi Parliament approves this law, we will resort to mutiny. This law is a bomb that may kill everyone. Iraqi oil does not belong to any certain side. It belongs to all future generations." Oil workers staged a three-day strike last month, defying arrests by armed troops, and union president Hassan Jumaa Awaad, has warned: “If those calling for production-sharing agreements insist on acting against the will of Iraqis, we say to them that history will not forgive those who play recklessly with wealth and destiny of a people and that the curse of heaven and the fury of Iraqis will not leave them.”

A recent poll commissioned by a coalition of NGOs and other groups found that a clear majority Iraqis from all ethnic groups would prefer "Iraq's oil to be developed and produced by Iraqi state-owned companies" over foreign companies. Most Iraqis are, however, in the dark about the laws, in yet another example of US-style “democracy”. More than three out of four Iraqis - including nine of 10 Sunni Arabs - say "the level of information provided by the Iraqi government on this law" was not adequate for them to "feel informed" about the issue.

Far from being a great display of US-driven global corporate power and reach, the invasion and occupation of Iraq has turned into a great debacle. It is coming to represent the end of empire rather than the beginning of a new one, the place where corporate-driven globalisation ran into the sands.

Paul Feldman, AWTW communications editor

Peak oil - peak madness

The sharp rise in the price of oil to almost $80 a barrel, coupled with evidence that production is nearing or is already at its peak, is a dangerous indicator of the unsustainability of the global market economy. As oil runs out, the corporations are expanding production as if there was no tomorrow, with dire consequences for the rest of us. They will diversify into other sources of energy only if they are tradable as commodities – like oil is - and facilitate profit-making in the production and sale of commodities. This is already creating its own set of problems. A switch to using corn and wheat to create biofuels like ethanol, for example, is having an impact on food prices throughout the world. There have already been riots in Mexico following a sharp rise in food basics, and the trend is now revealing itself in the major capitalist countries. Over 20% of the maize crop in the United States is used for the production of ethanol. The knock-on effect on the price of wheat on the international markets is "only headed one way," says agricultural accounts at Deloitte. The firm also predicts that the era of cheap food that has lasted since 1945 is coming to an end. There is always the nuclear option, of course, which is the one that New Labour favours for Britain. This in turns creates massive storage and other problems, especially for those living near nuclear plants.

Some environment campaigners and groups hope that as oil runs out, the economy will contract, less carbon dioxide will be emitted, global warming will ease and, lo and behold, problem solved! This is dreamland, unfortunately. A more likely scenario is that oil prices will continue to rise, food prices will soar, unemployment will grow as energy supplies dry up, the financial system will become unstable and more resources wars, like the one in Iraq, will develop. Addiction to oil and the use of private cars comes with capitalism. The system is based on individual/family units with one or more cars for work and leisure. The "American" model has become the global model, sweeping Latin America, China and India. There has to be another way. The nature and reason for production of commodities has to undergo a fundamental transformation, beginning with immediate action to address energy supplies and climate chaos. An action plan could include:

• An immediate halt to car production; existing models to be made more fuel efficient and use other forms of fuel; introduce social ownership and use of cars
• Reserving oil for essential transport which benefits humanity – for example, shipping and food production
• Setting an upper limit on the number of air miles flown in and out of Britain; supporting campaigns fighting airport expansion
• A complete overhaul of public transport – reducing prices, bringing rail and air back into public ownership and using dial-a-ride to get people to hubs so they can get to work
• Heating homes with gas or locally-produced renewable electricity sources; bringing energy companies back into public ownership
• Using resources currently spent on wars, nuclear weapons for researching alternative fuel and power systems
• Recycling on massive scale at all levels of production and consumption
• A curb on long-distance transport of food, and a switch to not-for-profit production of food and other commodities.

All these need to be agreed and implemented by local, regional and national democratic bodies in a direct challenge to the status quo of corporate madness and business-friendly governments.

Paul Feldman, communications editor

Oil men warm to plans for recycling climate victims

The Yes Men, masters at corporate identity theft who once posed as the World Trade Organisation on the world stage, have pulled off another triumph. Posing as representatives of Exxon-Mobil and the National Petroleum Council( NPC), yesterday they presented a product with a difference to 300 oil industry representatives in Calgary, Alberta. The speech was billed beforehand by the organisers as the major highlight of the conference. In it, the "NPC rep" was expected to deliver the long-awaited conclusions of a study commissioned by US Energy Secretary Samuel Bodman. The NPC is headed by former ExxonMobil CEO Lee Raymond, who is also the chair of the study. In the actual speech, the "NPC rep" announced that current U.S. and Canadian energy policies (notably the massive, carbon-intensive exploitation of Alberta's oil sands, and the development of liquid coal) are increasing the chances of huge global calamities. But he reassured the audience that in the worst case scenario, the oil industry could "keep fuel flowing" by transforming the billions of people who die into oil. "We need something like whales, but infinitely more abundant," said "NPC rep" "Shepard Wolff" (actually Andy Bichlbaum of the Yes Men), before describing the technology used to render human flesh into a new Exxon oil product called Vivoleum. 3-D animations of the process brought it to life.

"Vivoleum works in perfect synergy with the continued expansion of fossil fuel production," noted "Exxon rep" "Florian Osenberg" (Yes Man Mike Bonanno). "With more fossil fuels comes a greater chance of disaster, but that means more feedstock for Vivoleum. Fuel will continue to flow for those of us left." The oilmen listened to the lecture with attention, and then lit "commemorative candles" supposedly made of Vivoleum obtained from the flesh of an "Exxon janitor" who died as a result of cleaning up a toxic spill. The audience only reacted when the janitor, in a video tribute, announced that he wished to be transformed into candles after his death, and all became crystal-clear. At that point, Simon Mellor, an executive for the company putting on the event, strode up and physically forced the Yes Men from the stage. As Mellor escorted Bonanno out the door, a dozen journalists surrounded Bichlbaum, who, still in character as "Shepard Wolff," explained to them the rationale for Vivoleum. "We've got to get ready. After all, fossil fuel development like that of my company is increasing the chances of catastrophic climate change, which could lead to massive calamities, causing migration and conflicts that would likely disable the pipelines and oil wells. Without oil we could no longer produce or transport food, and most of humanity would starve. That would be a tragedy, but at least all those bodies could be turned into fuel for the rest of us." "We're not talking about killing anyone," added the "NPC rep." "We're talking about using them after nature has done the hard work. After all, 150,000 people already die from climate-change related effects every year. That's only going to go up - maybe way, way up. Will it all go to waste? That would be cruel." Security guards then dragged Bichlbaum away from the reporters. Later "Shepard Wolff" (Bichlbaum) said:" "Putting the former Exxon CEO in charge of the NPC, and soliciting his advice on our energy future, is like putting the wolf in charge of the flock." Quite.

Paul Feldman, communications editor.

Oil, Iran and a British coup

Whatever Iran’s motives for seizing British military personnel, it’s not difficult to fathom out why Teheran is so jumpy. There is the UK-US occupation of neighbouring Iraq, where American forces recently seized – and still hold - Iranian officials, barely-disguised plans to bomb Iranian nuclear facilities, the presence of a massive hostile naval force in the Persian Gulf - plus plenty of alarming history. In 1951, the democratically-elected government of Mohammad Mossadeq defied Britain and nationalised Iran’s oil resources. When the British, who had previously exercised effective control over both the country’s oil and revenue, objected, Mossadeq (pictured) went to the United Nations and told the General Assembly: "My countrymen lack the bare necessities of existence. Their standard of living is probably one of the lowest in the world. Our greatest natural asset is oil. This should be the source of work and food for the population of Iran. Its exploitation should properly be our national industry, and the revenue from it should go to improve our conditions of life. As now organised, however, the petroleum industry has contributed practically nothing to the well-being of the people or to the technical progress or industrial development of my country." British appeals to reverse the decision fell on deaf ears.

When the Tories were returned to power later in 1951, Prime Minister Churchill decided that a coup should be organised to effect a regime change in Iran. He won the support of the Americans and from November 1952, the CIA and MI6 began a systematic campaign to destabilise Iran. In the crisis of 1953, the Shah of Persia fled the country after his troops opened fire on protestors. But by August, a faction in the army in the pay of the Americans staged the coup which led to Mossadeq’s arrest and the restoration of the Shah. A CIA file detailing how the coup was planned and carried through, written in 1954, was published by the New York Times in 2000. Mossadeq was jailed and such was his popularity that when he died, he was allowed no funeral, and was buried underneath the floorboards of a room in his house. With the Shah back in control and parliamentary elections abandoned, Western oil companies were free to exploit Iran’s oil once more. The brutality of the Shah’s regime eventually produced a build-up of opposition that led to the Islamic revolution of 1979. When the masses took to the streets, many carried posters with the picture of Mossadeq as a symbol of national sovereignty and independence from colonial powers. On the 12th anniversary of Mossadeq's death, in 1979, an estimated 1 million political pilgrims filed to his home in Ahmad Abad, to pay homage. After the establishment of the Islamic Republic, oil was nationalised once more. Now the wheel of history is turning again. Iran’s oil is crucial to the global capitalist economy but a lack of foreign investment is apparently taking its toll. The country possesses facilities to process only 60% of its own fuel needs and UN-imposed sanctions will make matters worse. The British and American fleets are in the Persian Gulf to protect the West’s oil supplies and are part of yet another plot to destablise Iran. As for Britain’s presence in the disputed Shatt-al-Arab waterway between Iran and Iraq, it is simply another provocation that Teheran has responded to in kind.

Paul Feldman, communications editor