Last week Bush called on Congress to lift the long-standing ban on offshore oil and gas drilling, arguing America needs to increase its energy production. Bush also called for opening the Arctic National Wildlife Refuge for drilling; lifting restrictions on oil shale leasing in the Green River Basin of Colorado, Utah and Wyoming; and easing the regulatory process to expand oil refining capacity. He also blamed Democratic opposition to his past energy proposals for the high cost of gasoline.
I ignored Bush's bashing of the Democrats as it is an election year and he's trying to win a third term by proxy through John McCain. His demands that Congress turn over ANWR, the offshore and the Green River Basin to the oil industry, however, gave me an overwhelming sense of deja vu, taking me back nearly a century to the Harding administration and the “Teapot Dome” scandal.
In “The Teapot Dome Scandal: How Big Oil Bought The Harding White House And Tried To Steal The Country,” Laton McCartney tells the story of the first great government scandal of the 20th century. At the time, federal oil preserves or domes - one of them called Teapot Dome because of a nearby teapot-shaped formation - had been set aside on public lands in California and Wyoming for the U.S. Navy. The oil in the domes was worth hundreds of millions of dollars and was naturally coveted by numerous oil industry magnates, several of whom colluded with corrupt officials in the Harding administration to obtain them illegally.
Reading McCartney's book, I was struck by the disturbing similarities between then and today. In both instances you have a presidential administration with extremely close ties to the oil industry; surging demand for oil and its byproducts - the 1920s was the decade in which the automobile became a necessity and today there's the globalized economy; and huge reserves of oil coveted by but off limits to the oil industry - for national security then and environmental reasons now.
I'm not saying the Bush administration is involved in a Teapot Dome-type scandal with federal officials taking bribes from oil magnates. I do, however, believe an attempt at bribery is taking place, but it's the legal bribery of the American people, not the illegal bribery of government officials.
The bribe being offered is the promise of lower prices at the pump through increased drilling. We're told that all we have to do is get rid of some silly environmental restrictions, let the oil industry do what it will and the price of gas will come down. We're also being told that the announcement of drilling alone will push down prices.
Don't you believe it.
The oil magnates of the 1920s didn't want the naval oil reserves to lower the price of gas and thus reduce their profits; they wanted to take advantage of the growing demand for fuel and get even richer. The oil industry of today is not interested in drilling offshore because they want to lower the price of gas and reduce the billions of dollars they're raking in; they want to take advantage of the growing global demand for oil and make tens of billions.
Even if we give the oil industry what it wants I doubt we'll see a significant reduction in the price of gas or maybe none at all. Why? Because supply and demand and/or speculation will continue to drive up the prices, or so we'll be told.
When prices started shooting up, it was blamed on global demand - especially China and India. Holes started to appear in that argument and so next it was speculators who were to blame. Lately though, I've noticed that some oil industry apologists are edging back to the supply and demand argument and downplaying speculation.
(Industry propagandists never seem to miss an opportunity to lash their favorite whipping boys - environmentalists and government regulation. The sub text of these attacks is that all would be well if the EPA was disbanded and environmentalists sent to Guantanamo.)
These shifting explanations suggest that what we'll get if we let the oil companies have their way is not lower gas prices but more excuses for higher ones.
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