Monday, June 07, 2010

History through the bottom of a (BP) barrel

Letter From America
Tribune 4 June 2010

Ian Williams

BP is an icon for the previous century. Its consciously green but now sadly ironic logo recalls the period under Lord Browne when it stood for “Beyond Petroleum,” and was one of the first of the oil companies to break from the Seven Sisters’ solidarity of climate change denials.

The company has always suffered from the Confucian curse of living in “interesting times.” Who remembers now its genesis as the Anglo Iranian Oil Company, or the part First Lord of the Admiralty Winston Churchill played in its founding to ensure the supply of fuel for the Royal Navy’s dreadnoughts and keep the Empire safe?

The company’s machinations in Iran and British and later American government involvement tapped a deep vein of fundamentalism in Teheran that is still gushing decades later. Just across the Persian Gulf, the US determination to get dibs on equal shares of Middle Eastern oil meant propping up the Saudi tribe who named the country after them, imposed its own fundamentalist cult on it, and then swamped more modern and tolerant forms of Islam in a gush of oil dollars.

The other thing about the company was of course that Churchill made sure the company was British government owned. It produced untold billions for the British Treasury over the years and functioned successfully and commercially for much of the twentieth century. When the New York Times automated epithet machine used to add to Margaret Thatcher “the Prime Minister who privatized the loss making state industries,” we used to protest this intrusion of ideological mythology by pointing out that the companies she privatised were in fact making bucketfuls of money for the public purse, and that she had in fact sold them to her friends at a huge discount. It was, of course, left to later prime ministers to privatise public services like British Rail so that the private owners could make even bigger losses and bill the Treasury for the difference.

And so on to the twenty-first century, where BP, having expanded by buying Rockefeller’s old Standard Oil of Ohio, inherited some sloppy management styles and seems to have added some its own. Standard Oil was split by trust-busting US governments a long time ago, but the well lubricated wheel of fortune spins around, and as BP’s stock price plummets, commentators muse the possibility of a merger with or takeover from Exxon. Exxon was renamed from Esso, that is SO, that is Standard Oil, and so it would reconstitute the old Rockefeller empire.

Exxon is rabidly ideological and has fought all climate change mitigation and conservation legislation in the US. It would be sweet payback to take over heretical John Browne’s former company, even if it left him spinning in his retirement. The merger would face far less regulatory problems than before because the once might big seven sisters now control much less of the world’s oil reserves than before. Why would that be? Because outside the Anglo-Saxon world, the reserves are all owned by state-owned companies – like BP used to be. But in the US, the merged company would probably dominate the US political process even more.

Sadly, in the US, the oil companies own the state and not the other way round, which brings us round to the present gusher in the Gulf. It now emerges that not only did oil lobbyists dominate legislative proceedings on Capitol Hill, undermining the power of regulators, but they effectively ran the inspectorate charged with enforcing the attenuated regulations. Of course, when it came to oil rig installations it was not just the oil companies. Playing a prominent role was Halliburton, Dick Cheney’s own gang, that managed so successfully to privatise war in Iraq.

The federal Minerals Management Service inspectors who were supposed to check the rigs passed on the forms to the companies to fill in themselves. And of course, the background, like a Greek Chorus accompanying the whole tragedy are those Republican Convention delegates who dithyrambed Sara Palin’s apotheosis chanting “Drill Baby Drill.” After all, it was Washington’s reluctance to install even European style conservation and mileage standards that leads oil companies to boldly go where no drills have gone before in the uncharted depths of the Arctic and the Gulf of Mexico.

Of course, the Republicans are blaming this gush of oil on Obama, just as they blamed the gush of trillions of dollars in the financial crisis. And the worrying thing is that he is still trying to be bi-partisan and show that he is business friendly in the face of rabid and unscrupulous opponents whose fixed principle is that business is always right. Everytime Sarah Palin or similar Republican luminaries speak they should be greeted with “Spill Baby Spill!”

So what inhibits Obama? Well, reminiscent of New Labour’s worst exemplars it is difficult to attack the Drill Baby Drill crowd when so many Democrats had their hands in the till of the oil companies as well. In the end, perhaps that is the exiguous moral superiority of the Democrats that they are not shameless enough to go ahead and attack anyway.

And as for BP, should we not support it as an iconic British company? Well, check the share register. Like Cadbury’s, the other patriotic standard bearer, non-UK mostly US shareholders, , almost certainly own the majority of the company.

Come back Winston. If not all, much may be forgiven.

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