Big Oil Still the Big Dog

By Joel Connelly, Seattle Post Intelligencer
13 October 2009

Ask Peter Maas about Exxon's 15-year legal fight not to pay punitive damages for trashing Alaska's pristine Prince William Sound, and the author of "Crude World" takes you back 100 years to a story about the founder of Standard Oil.

John D. Rockefeller was on the golf course when told that a judge had fined his Indiana subsidiary $29 million. "The judge will be dead before we pay a penny of this," Rockefeller calmly replied, and returned to his game.

A federal court jury hit Exxon with a $5 billion punitive damages award over the 1989 Exxon Valdez oil spill. But the case spent a decade-and-a-half bouncing around federal courts on appeal. The award was cut in half, and the U.S. Supreme Court eventually sliced it to $500 million.

No matter that an estimated 20 percent of the Alaska fishers and villagers and natives who were plaintiffs had died. No amusement that one appellate judge who heard the case, Russell Wiggins, was indeed deceased.

"It was a bottom line calculation: Play it out for a long time in court," Mass said in an interview. The author of "Crude World: The Violent Twilight of Oil," will speak tonight at Seattle Town Hall.

Chevron, another oil giant, is currently facing a massive lawsuit for what Maas calls "the oil world's Chernobyl" - massive past contamination of the rain forest in Ecuador.

Chevron may lose, but Maas explains in his book the protracted war faced by anybody who takes on Big Oil.

"If you want to sue oil companies," he writes, "you need to be patient and fatalistic, because you are unlikely to get to trial; even if you do, after years of pre-trial maneuvering, you are likely to lose; and if you happen to win, it will likely require years more to receive court-ordered damages because oil companies can afford to appeal and appeal and appeal."

Maas delivers a basic truth about the architects of our carbon economy: Big oil has no permanent allegiances, only permanent self-interests.

"Oil companies have a legal allegiance to their stockholders, a bottom line of making as much money as they can," he explained in a telephone interview.

What happens if U.S. interests are at stake? Well, take 1973, when oil-producing Arab states slapped an embargo on supplies to Western nations.

"American companies had to execute the orders, and cut off Saudi Arabia's supplies to the United States," said Maas.

Not long ago, Shell Oil aired a TV spot featuring a willowy, British-accented cultural anthropologist whose job is to help Asian villagers cope with nearby oil exploration.Don't believe it. As Maas outlines, Big Oil is never a benign presence, in the industrialized world or in the Third World. Companies see their opportunities and seize them.

"I lived in Asia for several years and wondered, if oil was such a blessing to countries possessing it, how South Korea, which has no oil, became an economic tiger, as well as Japan, whose oil reserves are miniscule," Maas writes.

"Their prosperity in the last 50 years was in contrast to oil exporters like Iraq, Iran and Nigeria, which did not have the profile of winners."

Maas takes us on a world tour. The World Bank estimates that 80 percent of Nigeria's oil wealth has gone to 1 percent of the population. A former national police chief, convicted of stealing $98 million, was given a six-month sentence.

In the meantime, Niger Delta villagers have seen fish die, crops wilt, their land and water polluted by a foreign-owned industry from which they have derived almost no income.

Or take Equatorial Guinea, whose dictator has become one of the world's richest citizens. He collects royalties while his subjects get the shaft. Here is Maas' description of infrastructure, as erected by Big Oil in an impoverished country:

"Raw materials were imported, and the factory would be dismantled when construction ended. The trailers in which the Asians lived were prefab units -- no local materials or local labor had been used to build them. The plant had its own satellite phone network, which was connected to the company's Texas network -- if you picked up a phone you would be in the Houston area code. . ."

The United States uses much of the oil so roughly extracted in fouled, out-of-sight corners of the world.

Maas has been given pause by such environmental disaster zones as the Niger Delta and Ecuadorian rain forest.

"It's an odd consequence of the success of America's environmental movement, in stopping oil exploration in our waters," he said. "We become insulated from the cost of extraction. We 'offshore' the damage.

"By protecting our water and land, we are blinding ourselves to costs of the energy that provides our lifestyle. We don't pay attention to other countries from which we get our energy."

Congress has on the table legislation that would cap carbon emissions, promote efficiency and renewable energy sources, and gradually reduce our emissions of greenhouse bases.

The addiction to a carbon economy is already costing us: Read the price tag for recent wars, and what we pay as the world price of oil goes up.

Of course, global warming will extract a huge, hard-to-determine cost from our children and grandchildren dearly.

"I do think, certainly, the prospects for reform are better: Policies at the top have changed," Maas said.

Whoever runs things in Washington, D.C., however, learns a basic truth: Big Oil hold permanent power.