Here we are in early 2006, and the headlines are briefly given over to the disclosure that the oil companies could end up underpaying their royalties for drilling on American public lands by $7 billion.
There was a time, a generation ago, when people here in the United States thought and wrote about the underpinning of the US economy–the energy industry–in a serious way. In the mid-1970s the country was bustling with groups pushing for public control, for extending the regulatory powers of the Federal Trade Commission over natural gas prices, for breakup of the oil companies.
In came Carter, and up went the solar collectors on the White House roof. Aside from that, it was downhill all the way. The oil companies spent millions to winch themselves out of the PR debacle of the oil embargo of 1973-’74, in which the public rightly perceived them as eager co-conspirators with OPEC in price-gouging and profiteering.
By the time Carter surrendered the White House and its solar panels to Reagan (who swiftly tore them down; five years later they wound up at Unity College in Maine), the first decisive counterattacks had taken place. The FTC’s wings were clipped and the oil industry was positioning itself for the next great bonanza: in the Gulf of Mexico, the outer continental shelf off the California coast and Prudhoe Bay, which had just come on line. The trans-Alaska pipeline had been built and Alaska primed for the taking. In the interior West the oil shale deposits of the Rocky Mountain Front were awaiting the green light and the public subsidies.
For the oilmen the overarching political task was to get Congress to surrender all effective public control and concentrate on the simple business of handing out subsidies. On private lands the oilmen had the depletion allowance, one of the great wonders of the world. On public lands the equivalent would be to spare the oil companies the burden of paying any royalties on the oil they were taking out of the ground.
The Reagan years were spent clearing away any inconvenient regulatory underbrush. While the liberals cheered the downfall of Interior chief James Watt–and the Sierra Club raised royalty-free millions by putting his sour visage on their mailers–the oil industry patiently pushed ahead, prompting its champions in Congress to prepare the ground for the struggles ahead. The strike force was to be a Louisiana/Alaska axis.
In came the Clinton crowd, briefly flapping its banner of economic populism. By the summer of 1993 the banner was furled, populism in pell-mell retreat and the sustainability of the corporate bottom line dead center in the Clinton agenda.