CAP: Obama should pressure the oil industry to assert its influence with Libya

A ThinkProgress cross-post.  See also the Center for American Progress (CAP) post “How the United States Can Respond as Tripoli Heats Up,”

As Col. Muammar Qaddafi begins to lose control of his country to anti-government protesters, the Libyan dictator announced this week that he won’t go down without a fight. In a rambling speech on Tuesday, Qaddafi vowed to track down and kill protesters “house by house.” “I will fight on to the last drop of my blood,” he said. In fact, forces loyal to Qaddafi launched a counter offensive yesterday, and to date, the unrest has already claimed hundreds “” if not thousands “” of lives.

President Obama condemned the Libyan government for of using violence to quell demonstrations and said he asked his team “to prepare the full range of options that we have to respond to this crisis.” But unlike with U.S. allies Bahrain and Egypt, the White House has limited options to assert much leverage with the Libyan government. While some rights groups have offered ideas on how to positively influence the situation, CAP’s John Norris and Sarah Margon note that the White House “needs to convince Libyan business leaders that Qaddafi is a liability they can no longer afford” and since Libya is Africa’s largest oil producing country, a good place to start would be the oil industry:

One doesn’t normally look to oil companies to do the right thing. But they now have an enormous vested interest in helping push Qaddafi out. Libya has Africa’s largest crude oil reserves and the uncertainty in that country has already started to rattle markets. If Qaddafi stays on his current course and remains Libya’s leader, there will invariably be calls for an oil embargo from Libya, a proper U.N. war crimes investigation, and possibly a civil war. The oil business will be disrupted for a considerable period under all of those scenarios.

The situation in Libya “has been the immediate cause for the spike in oil prices recently” and the industry is worried about greater negative effects on the oil markets. But Qaddafi doesn’t appear to be concerned about markets, let alone his own people. In addition to promising all out war with anti-government demonstrators in order to maintain power, he has also reportedly ordered his security forces to institute an if-all-else-fails-slash-and-burn policy “” starting with Libya’s oil, as Time Magazine reports:

There’s been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya’s rebellious tribes: It’s either me or chaos.

While Libya produces only 2 percent of the world’s oil supply, most of its exports go to Europe, which would be directly effected by any more turmoil in the industry. But oil is a world commodity, and the rest of the world, including the United States, is still “addicted to oil” and thus is “not immune to the price shock waves.”

For more about the situation in Libya, see the Progress Report and “How the United States Can Respond as Tripoli Heats Up” by CAP’s John Norris and Sarah Margon.

17 Responses to CAP: Obama should pressure the oil industry to assert its influence with Libya

  1. Colorado Bob says:

    One of the biggest oil lobbying organizations now plans to directly back political candidates.

    The American Petroleum Institute (API) — the main U.S. trade association for the oil and gas industry — recently announced that beginning in the second quarter of this year, it will take a turn towards direct political donations. API, who has companies like ExxonMobil and Chevron among its 400 members, spent about $7 million last year on lobbying efforts alone.

  2. Colorado Bob says:

    Real Climate faces libel suit

    Prominent blog run by climate scientists could be sued by E&E after accusing the journal of ‘shoddy’ peer review

    As an example, Schmidt points to an E&E paper that claimed that the Sun is made of iron. “The editor sent it out for review, where it got trashed (as it should have been), and [Boehmer-Christiansen] published it anyway,” he says.

    The journal also published a much-maligned analysis suggesting that levels of the greenhouse gas carbon dioxide could go up and down by 100 parts per million in a year or two, prompting marine biologist Ralph Keeling at the Scripps Institute of Oceanography in La Jolla, California to write a response to the journal, in which he asked: “Is it really the intent of E&E to provide a forum for laundering pseudo-science?”

  3. Joan Savage says:

    The Business Spectator reports that several oil company leaders have defected.

  4. Raul M. says:

    Looks like that UFO Joe posted on is
    Gearing yup to refuel. It probably want
    All the oil though , but not the country.

  5. Scrooge says:

    Common enemies make for strange bedfellows. Even though oil is a supply and demand product the fear may result in short term profits for the oil companies. So what’s the chance of them doing the right thing. Its sad the POTUS has to call out to king david.

  6. Mike Roddy says:

    In spite of what they say publicly, the oil industry loves these price spikes, since they create huge windfall profit opportunities all through the supply chain.

  7. J Bowers says:

    Spain to lower speed limit as oil prices rise

    Spain will lower motorway speed limits, cut train prices and use more biofuel in a bid to combat rising oil prices due to Libya unrest

    Also of interest: Kentucky split between coal past and clean energy future

  8. dorveK says:

    Where is Reagan, when we need him most? Perhaps Obama should have made a deal with Palin, instead of Clinton…

  9. Richard Brenne says:

    What we have is a pseudo-military figure with nice hair who staged a coup and held onto power through ruthless means in a misogynistic land that commits public executions and finds itself on the world stage only because of the geologic and geographic accident of having oil under their feet. Oh wait a minute, that’s Bush and Texas. . .

  10. Michael Tucker says:

    Interesting idea: Have oil companies put pressure on ‘Libya’ “to push Qaaddafi out.” Exactly who in Libya would these companies pressure? So, get rid of that mad man and we will start pumping oil again… Would that work or would they do anything to get at that sweet, sweet Libyan oil?

    It looks like it will take more than rhetoric to ‘push’ him out and I doubt an embargo will work any better with Qaddafi than it has with Iran.

  11. Edward says:

    Countries Uncle Sam touches turn to rust. Leave bad enough alone.

  12. Solar Jim says:

    Asking the oil industry to respond to the Libya dictator is asking one type of dictator to respond to another, and is foolish. I suggest we support the people’s revolution by promising to invest in solar power plants across the country’s vast desert, cooperatively owned, for the benefit of it’s people and European market demand for clean energy.

    Qaddafi is an autocratic petroleum dictator who has ransacked his nation. Both oil and dictator need to be dismissed. And the world needs to detox from carbonic acid gas emissions from burning oil by conversion to clean energy economics.

  13. dbmetzger says:

    here we go again…
    Gas Prices Rise to 2008 Levels
    Gasoline prices in various Canadian cities jumped overnight after oil prices hit a 2½-year high amid unrest in Libya.

  14. adelady says:

    I heard a very good analysis of this pressure the dictator (or not) approach last night.

    The view among the diplomatic communities of Europe, US and the rest of the developed world is that Gaddafi really is too crazy. There are lots and lots of foreign nationals working in the oil fields and other remote locations. The current approaches and public statements are a very fine balancing act between condemning the violence on one hand, and not setting off a murderous rampage against ex-pat workers on the other.

    Anyone who can blame both Bin Laden and the Queen of England for inciting his local citizens cannot be relied on not to send his mercenaries out on a hunt-the-foreigner expedition.

    Civilised governments give the safety of their own citizens a much, much higher priority than this madman does for his own countrymen.

  15. Robert In New Orleans says:

    Wake up people, look at his picture! Does anyone truly believe that Khaddaffy Duck (aka Colonel Quaalude) can be reasoned with in a rational manner?

    (References are from an old SNL skit)

  16. Prokaryotes says:

    The question remains, why these regimes could exist for such a long time.

  17. John McCormick says:

    RE # 16

    Money and guns.

    The thugs that control the economy and resources in poor countries can hire whatever they need to protect their wealth while sharing just enough of it to maintain loyalty among the elite and criminals.

    When the masses are willing to face death to end the brutal regime, the thugs go ballistic. Some revolutions are brutally crushed. Some are brutally successful.

    Developed nations watch until their interest are threatened. But we mostly watch. Don’t we. Rwanda, Pol Pot, former Yugoslavia………..

    John McCormick