When it comes to oil politics and Alaska the Bush Administration and the environmental movement are already treading the measures of a familiar dance. President Bush is insisting on the urgency of drilling for oil in the Arctic National Wildlife Refuge. He points to a supposed oil shortage that has somehow darkened homes and businesses up and down the West Coast. The environmental movement is already ramping up its national mail campaign rallying supporters for the battle to save the Refuge.
The actual game is bigger and more sinister.
Let's start by disposing of some myths. Start with the ludicrous claim of the Bush crowd that California's energy crisis can be solved by oil drilling in Alaska. Nationwide, oil provides only 3 percent of the source fuel used to generate electricity. In California the figure is less than 1 percent.
Bush is offering California exemptions from its supposedly onerous clean-air rules, claiming that once freed from such red tape the state's utilities and power producers could build a new generation of plants powered by fossil fuels. The Wildlife Refuge's oil won't be of much help here, since government officials estimate that even on an expedited schedule, oil couldn't flow from the Refuge until the year 2015.
Nor is the oil companies' problem in Alaska a shortage. Recall that back in 1995 British Petroleum, ARCO and Chevron entreated President Clinton to cancel the twenty-two-year ban on export of crude oil from Alaska to other countries. Congress had made such a ban a condition for permitting construction of the Alaska pipeline. The intent of the ban was to insure that Alaska's oil would help stave off any West Coast oil shortage. The companies wanted the ban lifted because they had a glut on their hands and required new markets.
Clinton dutifully assented, and the oil companies began exporting Alaskan crude forthwith to Japan, South Korea and China. The extremes to which they went in using Clinton's waiver to bilk US consumers came to light in January when The Oregonian won a Freedom of Information Act lawsuit, gaining access to 4,000 pages of documents in the Federal Trade Commission's files concerning the merger of BP-Amoco with ARCO.
An FTC economist had concluded that BP-Amoco was selling oil to Asian refineries at prices lower than it could sell to US refineries on the West Coast, in order to manufacture a US shortage. As evidence the FTC had e-mail traffic passing between BP managers who talked about "shorting the West Coast market" in order to "leverage up" the prices there. Another BP manager gloated that this scheme was a "no brainer." The FTC reckoned that this ploy allowed BP to hike prices at West Coast pumps by as much as 3 cents a gallon.
So the oil companies' strategy is to exploit the electricity crisis to seize at last a number of long-sought objectives: not just access to the Arctic National Wildlife Refuge, which would be a great symbolic victory, but also tax breaks worth billions for oil and gas extraction from wells across the country.