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Big Oils long history of compromising national security for profit

By Climate Guest Contributor on August 13, 2010 at 6:48 am

"Big Oils long history of compromising national security for profit"

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This Wonk Room cross-post is by CAP’s Rebecca Lefton.

Pan-Am 103Months after the worst environmental disaster in U.S. history, BP is delaying deepwater drilling off the coast of Libya and exploratory drilling off of the Scottish Shetland islands. The delays also reflect the political pressure BP faces because of its lobbying efforts “over the prisoner transfer agreement with Libya that led to the release of Lockerbie bomber Abdel Basset al-Megrahi.” Senator Robert Menendez (D-NJ) is planning to send members to the UK and Scotland to question witnesses on the role of BP in the release of the Lockerbie bomber. This development follows the postponement of a Senate Foreign Relations hearing because the witnesses declined to show.

As we recently reported, 2010 lobbying disclosures reveal that Big Oil is influencing foreign policy by lobbying on the Comprehensive Iran Sanctions, Accountability, and Divestment Act as it is debated in the Senate. But this is not anything new. The oil industry and related trade associations have been lobbying to secure their bottom lines by risking our national safety for decades, including advocating for the removal of sanctions against oil-rich countries Iran and Libya.

Big Oil Fights Libyan Sanctions

The U.S. imposed unilateral sanctions in 1986 that froze Libyan assets, and banned all trade and financial dealings with the country. Following the Lockerbie bombing in December 1988 when a Libyan bomb exploded Pan Am Flight 103 from London to New York killing 270 people, Congress passed the Iran and Libya Sanctions Act (ILSA) in 1996. The act was intended to limit the flow of revenues that could be used to finance terrorist actions or obtain weapons of mass destruction, and to put pressure on Libya to comply with UN resolutions that included extraditing for trial those involved with the Lockerbie bombing.

Dick Cheney, then a former secretary of defense, worked hand in hand with oil companies to pursue the removal of sanctions against Iran and Libya, which they argued hurt business. In June, 1998, Cheney, as CEO of Halliburton, said in a speech at the Cato Institute:

Our government has become sanctions-happy.

Working closely with the U.S. Chamber of Commerce and front group USA* Engage, Cheney lobbied to lift sanctions against Sudan, Syria, Iran, Libya, Burma, Nigeria, India and Pakistan during his tenure at Halliburton which lasted from 1995 to 2000 before joining the White House as George W. Bush’s vice president.

USA*Engage, Halliburton, and Conoco

USA*Engage is a coalition front group opposing unilateral sanctions made up of more than 400 “” and at that point more than 670 “” companies, trade associations and other organizations from all sectors of the U.S. economy. Halliburton was a principal member of USA*Engage, whose members also included oil giants Conoco, Mobil, and Texaco. USA*Engage and Halliburton shared lobbyist Don Deline, vice president for government affairs at Halliburton. Deline served as Chair of USA*Engage from 2000 until June 2003 when he was replaced by Robert W. Haines, then Manager of International Relations for Exxon Mobil.

Conoco has been a strong supporter of USA*Engage, and is also a member of the Iranian Trade Association, an organization formed in 1997 opposing U.S. sanctions against Iran. According to The New York Times, Conoco “led the effort to repeal the Iran-Libyan Sanctions Act, which prohibits American companies from investing in those countries, paving the way for European and Asian oil conglomerates to develop some of the best oil and gas fields in the world.” The Times points out that Conoco had a long history of doing business in Libya, pumping 500,000 barrels of oil a day for 47 years until sanctions were imposed under Reagan in 1986. The company’s strategy also looked to Iran for its offshore gas deposits.

Dick Cheney’s Secret Energy Task Force

As one of his first acts in office, President Bush appointed Cheney to take the lead in crafting a new energy policy for the United States. Cheney created a secret energy task force that was strongly represented by the oil industry and its trade association representatives, including BP, Shell, Exxon and the American Petroleum Institute. Archie Dunham, then CEO of Conoco and board member of API, met with Cheney on March 21, 2001 while the energy task force was crafting its report.

An April draft of the energy task force report included language that would lift sanctions against Iraq, Iran, and Libya to advance “energy security” through increased production of oil resources in these countries. The final National Energy Policy Report did not refer specifically to these three countries. However, it did include a recommendation that the President direct the Secretaries of State, Treasury and Commerce to review and reform sanctions factoring in “energy security.” API said it was disappointed the report did not specifically recommend easing sanctions against Iran and Libya. Nonetheless, the report reflected the influence of the oil industry-based task force with its emphasis on “energy security” “” that is, access to international oil and gas resources in unstable regions “” stating:

Energy security must be a priority of U.S. trade and foreign policy.

At the same time, Congress was in a heated debate about whether or not to renew ILSA for five more years, which was being fueled by the oil industry’s push to block its reauthorization. Dunham was a witness before Congress in May, 2001 opposing the extension of ILSA. As the sunset period for ILSA approached, Bush was walking a fine line over the White House’s position on the sanctions, in part because Bush did not “want to look like a puppet of Big Oil” but oil companies would become enraged if the administration were to support renewal. In a seeming compromise, the Bush administration pushed Congress to limit the extension to only two years instead of five, “once the administration completes reviews of Iran policy and the overall use of sanctions.” Senator Charles Schumer (D-NY), who introduced the bill to renew the law, said:

I hope that the president hears our message and puts to rest the idea that ILSA might expire or be weakened because ILSA has been one of the best weapons our country has had in our war against terrorism, because it’s aimed at cutting off the flow of money that terrorist groups depend on to fund their attacks and operations.

Despite Cheney’s efforts on behalf of Big Oil, that August Congress voted overwhelmingly to extend the sanctions for another five years.

The timeline below is a glimpse of the engagement of Big Oil in the national security dialogue and the role of key players like former Vice President Dick Cheney in influencing the debate:

1986 The U.S. imposes unilateral sanctions in 1986 that freeze Libyan assets, and banned all trade and financial dealings with the country. Prior to that, companies “” including oil giants Exxon, Conoco, Hess, Occidental, and Marathon “” had been drawn to the country, which has the largest oil reserves in Africa, containing three percent of the world’s oil. Halliburton continues operating in Libya.

1988 In December 1988, a Libyan bomb explodes Pan Am Flight 103 en route from London to New York, killing 270 people over Lockerbie, Scotland.

1992 The United Nations imposes sanctions on Libya “to press Tripoli to hand over two suspects wanted for the 1988 bombing.” Halliburton continues operating in Libya.

1995 Former secretary of defense Dick Cheney becomes CEO of Halliburton, which continues operating in Libya throughout his tenure, and lobbies to lift United States sanctions against Sudan, Syria, Iran, Libya, Burma, Nigeria, India and Pakistan.

1996 Congress passes the Iran and Libya Sanctions Act (ILSA). The Act is intended to help limit the flow of revenues that could be used for financing terrorist actions, obtain weapons of mass destruction, and put pressure on Libya to comply with UN resolutions that included extraditing for trial those involved with the Lockerbie bombing.

1998 “Our government has become sanctions-happy,” says Halliburton CEO Dick Cheney in a speech at the Cato Institute.

1999 The United Nations suspends its sanctions against Libya.

2001 Despite the recommendations of President Bush and Vice President Cheney on behalf of the oil industry, Congress votes overwhelmingly in August to extend the Iran-Libya Sanctions Act for another five years. USA*Engage and the National Foreign Trade Council (NFTC) expresses dismay that the administration’s call for a two-year extension went unheeded. The NFTC is a lobbying group that opposes sanctions on companies doing business in Myanmar, formerly Burma.

2004 Bush signs an order lifting the remaining commercial sanctions against Libya after the country abandons its weapons of mass destruction programs in September 2004. Shell, BP America Inc, Exxon Mobil, ConocoPhillips, Chevron USA Inc, Halliburton and API all lobbied against the Iran-Libya Sanctions Act and related sanctions policies during the preceding years.

2005 Major companies jump to make contracts in Libya following the easing of restrictions. ConocoPhillips returns to Libya in a cooperative oil and gas production venture with Marathon, Amerada Hess, and the Libyan National Oil Corporation. Chevron also makes a successful bid for an exploration license in Libya.

2006 ILSA is renamed the Iran Sanctions Act, with sanctions extended only for Iran until December 31, 2011.

2007 BP Magazine (Issue 4 2007) runs an entire article titled, “Libya: A Commanding Presence on the World Stage.” In the piece, the company touts a $1.25 billion exploration and production deal with Libya “” the “biggest exploration deal of its kind”¦and, the largest award of acreage by Libya in a single agreement” (21,000 square miles).

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3 Responses to Big Oils long history of compromising national security for profit

  1. Prokaryotes says:

    The Defense Department has kept up its immense purchases of aviation fuel and other petroleum products from BP even as the oil giant comes under federal and state scrutiny for potential violations of clean-water and oil-spill laws related to the April 20 explosion of the Deepwater Horizon drilling rig, according to U.S. and company officials.

    Even before the Gulf debacle, the Environmental Protection Agency had begun probing the potential debarment of BP from all federal contracts — including those reached with the Defense Energy Support Center, which buys all fuel for the military services. The EPA plays the lead role in debarment proceedings related to the Clean Water Act and Clean Air Act, and its probe was sparked by BP’s 2006 spillage of oil in Alaska and a 2005 explosion at its refinery in Texas.

    But the EPA’s deliberations are currently suspended until the investigations of the Gulf spill are concluded, according to an EPA spokeswoman. The agency could eventually decide to shut off federal contracts with specific divisions within BP or to the whole company “if it is in the public interest to do so,” it said in May. Any such action would be meant to punish “environmental noncompliance or other misconduct,” it said.

    Jeanne Pascal, a former EPA lawyer who until recently was overseeing the review of BP’s possible debarment, has said she initially supported taking such action, but held off after an official at the Defense Department warned her that the agency depended heavily on BP fuel for its operations in the Middle East.

    “My contact at DESC, another attorney, told me that BP was supplying approximately 80 percent of the fuel being used to move U.S. forces” in the region, Ms. Pascal said. She added that “BP was very ‘fortunate’ in that there is an exception when the U.S. is involved in a military action or a war.”

    “At some point debarment attorneys throughout the government need to look at BP’s record,” Ms. Pascal said. “This is one of the wealthiest corporations in the world. … Do we want to do business with this foreign corporation which has a horrendous record of chronically violating U.S. law? You have to look at the overall behavior pattern.”

    A spokeswoman for the Defense Department, Wendy Snyder, gave a different account of the internal debarment discussions. She said the Defense Logistics Agency “informed the EPA that there are adequate procedures and processes to protect the U.S. military missions should EPA determine that BP should be debarred.” That claim was reinforced by Ms. Schirmacher, who said that “none of BP’s current energy contracts are in direct support of operations in Iraq and Afghanistan” and that the agency could meet its requirements without BP fuel. But she indicated that the Pentagon had no intention of taking such action in the absence of an EPA decision. http://www.post-gazette.com/pg/10186/1070552-84.stm

  2. Eadsel Smith says:

    Obama approved this stunt. Looks like a lot of people were pawned.

  3. Rick covert says:

    Here’s one historical event you forgot. The Taleban visited Houston back in 1997 at the invite of Unocal based in Sugarland, Texas. Sugarland is a fashionable Houston suburb and the Taleban were treated to the amenities of the city. The governor of Texas at that time was oil man George W. Bush. The congressman who’s district Unocal’s Sugarland office resides in was Tom, The Hammer, Delay.

    http://news.bbc.co.uk/2/hi/world/west_asia/37021.stm