Sunday, 23 August 2009

Oil industry protest campaign adds to summer heat on President Barack Obama

Protests against Barack Obama are spreading across America like wildfire on a summer prairie, fuelled by an angry and fearful oil industry.

By Leonard Doyle in Washington Published: 7:04PM BST 22 Aug 2009

President Barack Obama is feeling the summer heat from the oil industry Photo: EPA
Still grappling on one front with opponents of his healthcare reforms, the President now faces a separate battle against an equally powerful foe: America's oil companies.
As the Mr Obama begins his summer family holiday on the island retreat of Martha's Vineyard, a raucous new group of protesters has begun venting its anger about his plans to tackle climate change - and has made clear that it will not allow his 10 day break to get in its way.

This time the strings are being pulled by the oil industry - known to its detractors as "Big Oil" - which is moving quickly and aggressively to block America's first climate change legislation.
The protests moved into a higher gear when the White House last week signalled a sudden retreat over a key aspect of the President's health care reform proposals: the plan for the US government itself to provide health insurance coverage for those who do not already have it.
It was a sign of weakness on which the oil industry has pounced. "Big Oil smells blood in the water," said Frank O'Donnell, who advises Democrats on the environment. "The stakes are very high."
The oil industry is aiming to kill off legislation which for the first time would limit how much carbon dioxide pollution US industry can pump out. During the election campaign Mr Obama came out in favour of a plan known as "cap and trade", under which industry would have to bid for permits to emit carbon dioxide - the waste gas from burning oil, gas and coal that is blamed for global warming.
The "cap" is the overall limit on the carbon dioxide produced by the US, and the "trade" allows carbon emitters to buy and sell carbon permits. Heavily polluting industries could choose to reduce emissions - or to buy surplus permits from other companies which chose to reduce their own emissions instead.
Mr Obama took his cue from a broad coalition of US industry which supports the market based plan, itself modelled on the previous campaign that cut emissions causing acid rain.
Many businesses believe that allowing the market to regulate emissions will give them more certainty about future energy costs and help them make better investment decisions.
Nuclear power plants and other low carbon emitters are big supporters of cap and trade, knowing it will make them more competitive. But the US Chamber of Commerce, which represents America's "smokestack" industries and the oil industry, all of which face higher costs, is trenchantly opposed - arguing that it will end with companies moving production and jobs abroad.
To the horror of the oil industry - which was politically powerful under President George W.Bush - Congress is already well on the way to adopting a cap and trade system. The House of Representatives has approved it and the Senate is to vote in September.
The legislation aims to double the amount of energy the US produces from renewable power, and is at the heart of Mr Obama's plan to give America a leading role in reversing global warming for the first time. But the fight now is about the cost to business.
The law being considered would charge companies at least $13 per ton of carbon emitted. Most energy companies and utilities would pass this on to consumers, and families would soon pay on average $1,437 a year more, studies show.
Mr Obama says his plan would return much of the money in lower taxes, but few buy that argument and opposition is growing shrill.
The oil sector, which accounts for 40 per cent of emissions but would receive only 2.5 per cent of the permits and faces buying the rest on the open market, is now rallying its forces to kill the legislation off altogether - preying on motorists' fears of steep petrol price rises.
"If Big Oil succeeds now, it will make it very hard to pass it in the future," said Mr O'Donnell. The reason is that the euphoria of Mr Obama's honeymoon with American voters is steadily fading - and next year is a congressional election year, when legislators are notoriously wary of confronting influential lobby groups.
Spotting the first sign of weakness in a President whose popularity ratings are falling, the oil industry is attempting to replicate the methods of health reform opponents to derail Mr Obama's plan.
It organised a so-called "Energy Citizens" rally in Houston, America's oil capital, last week, at which speakers railed against plans to change the country's gas-guzzling ways.
"Something we hold dear is in danger, and that is our future," said Bill Bailey, a rodeo announcer who was master of ceremonies. Inside the plus theatre auditorium, the wealthy owner of the Houston Astros baseball team urged more protests. "We need to preserve this way of life," declared Drayton McLane.
There was a high school marching band, free hot dogs and hamburgers and a video of the country and western star Trace Adkins.
"Of course I want to help protect the earth and leave a beautiful place for my future children to enjoy," said a protester, "But I will never have those future children if I am living on the streets because I lose my job due to this policy!"
The participants, mostly employees of energy companies, wore T-shirts with such slogans as "Create American jobs, don't export them" and "I'll pass on $4 Gas," a reference to the panic when oil prices spiked last summer.
The rallies have caused a rancorous split in the oil industry. One company, Shell Oil, supports the legislation, telling fellow members of the American Petroleum Institute that it is boycotting the protests. James Smith, chairman of Shell UK, who helped persuade the company to take its stance, declared earlier this year: "The cap in a cap-and-schemes trade ensures that the environmental objective is met. It works, and it is already proven that it works."
But most oil giants are opposed, some because they do not concede the need for such restrictions - and others because they would prefer an alternative scheme.
ConocoPhillips is openly encouraging its employees to protest, and there was a second rally in Roswell, New Mexico last week, organised by a public relations firm which represents both BP and Chevron.
Now many more "picnics", as the industry describes the events, are planned across the country.
A leaked internal American Petroleum Institute document sent to British Petroleum, Exxon Mobil, Chevron and other institute members revealed that the rallies were designed to send "a loud message" to the Senate. Kert Davis of Greenpeace, which obtained the letter last week, said: "It's a clear political hit campaign."
In moving to win more favourable terms, the energy industry has made some serious missteps. Last week a coal industry lobby was discovered to have sent fake letters to members of Congress, purportedly from worried black and elderly people.
But the Obama administration appears to have been blindsided by the ferocity of the lobbying. It has began its own push back by enrolling John Podesta - who heads a Democrat think tank and ran Mr Obama's transition team - to argue the case.
"The cap-and-trade concept itself is a product of American ingenuity," he declared, adding that new clean energy technologies will create 1.7 million new jobs.
But the oil industry, which faces the prospect of stumping up billions of dollars for its permits, is not to be deterred.
"There's a lot of anger out there," said Mr O'Donnell, who heads Clean Air Watch, a lobbying group. He fears that it will now be difficult to get a climate bill adopted in time for Mr Obama to take the lead at the UN climate conference in Copenhagen in December.
A defeat by the oil industry would be humbling for a president who took power with sweeping ambitions to transform America.
"He may be able to say that the US is finally taking steps in the right direction, but I don't think we will have a law to back it up," Mr O'Donnell lamented.