On Monday, the Biden administration officially announced it will approve the largest oil drilling operation proposed for federal lands in decades: the Willow project in Alaska’s North Slope. While the administrated opted to approve a reduced plan of three well pads, rather than ConocoPhillips’s original five, three pads could amount to up to 199 total wells, and the well pad reduction will only reduce the project’s estimated emissions by around 8 percent. Though pitched as a response to today’s energy security, the project is not slated to begin production until 2029.
At its peak, the Willow project is expected to produce 180,000 barrels of oil per day and 600 billion barrels of oil total over its projected 30-year lifespan, all while releasing emissions equivalent to a third of the U.S. fleet of coal-fired power plants. The Arctic environment around it, meanwhile, has warmed four times as fast as the rest of the planet since 1979. Looking to soften the blow, the administration separately announced it will declare 13 million acres within Alaska’s National Petroleum Reserve off limits to new drilling.
The Willow project’s supporters have sought to frame opposition to the plan as coming solely from out-of-touch radicals. “The president and his team talk often about racial justice, racial equity, environmental justice—the vast majority of the native people in Alaska support this project,” Alaska Senator Dan Sullivan said last week at a major oil and gas conference in Houston, CERAWeek. “And what they’re starting to say is, these lower 48 environmental groups who are now doing this big campaign against Willow are undertaking really the second wave of colonialism. This is from our native leaders: eco-colonialism.” Asked afterward to clarify which indigenous communities he was referring to, Sullivan said “all of them.”
The Willow project has indeed enjoyed support from many indigenous governments and groups in Alaska. Half of lease revenues from sales in the Arctic go to a special grant program that disperses money to North Slope communities, which are majority indigenous, “to help mitigate significantly adverse impacts related to oil and gas development.” The Willow project approval was welcomed by the North Slope Borough that encompasses the National Petroleum Reserve-Alaska; elected leaders in the Iñupiat Community of the Arctic Slope, or ICAS; as well as the for-profit Arctic Slope Regional Corporation, which was formed by federal statute to allow Iñupiat shareholders to oversee and invest revenue from the state’s land and natural resources. In a joint statement on Monday, the Alaska Federation of Natives—the largest statewide Native organization—supported Willow and said that the project “bolsters U.S. energy security at an important time when we are trying to raise the urgency of investing in critical needs arising because of Russia’s aggression.”
Local support for the Willow project is hardly unanimous, though. Rosemary Ahtuangaruak—mayor of the 525-person city closest to the Willow project, Nuiqsut—has been an outspoken critic. “Our people feed their families with traditional subsistence activities like fishing and hunting caribou, moose, birds, and more,” she wrote last November. “The Willow project’s massive infrastructure would bulldoze straight through these crucial habitats, redirecting the animal’s migratory paths, moving them away from nearby villages, and endangering the food security of local people. That’s not to mention the damage from exposure to air and water pollution that we face.”
“Not only a complete betrayal of his commitments to confront the climate crisis but is also an open violation of Indigenous rights.”
The group Sovereign Iñupiat for a Living Arctic condemned the Biden administration’s approval of the project, calling it “a great disappointment” that “comes after years of grassroots, Iñupiaq-led opposition,” and represents “the continued prioritization of profit over climate and people.” The Indigenous Environmental Network has called the project “ the next U.S. climate bomb,” adding that the White House’s decision constitutes “not only a complete betrayal of his commitments to confront the climate crisis but is also an open violation of Indigenous rights. It doesn’t matter what other ‘Arctic Protections; this administration puts in place, the ecological & spiritual damage wrought by this project cannot be offset nor supplanted.”
After the administration’s decision was announced this week, Sullivan hauled out the same talking point he had used earlier, and commended Alaska Natives in the North Slope for persevering “even as far-left, Lower 48, eco-colonialist NGOs continued their efforts to silence Alaska Native voices.” ConocoPhillips is one of Sullivan’s top donors. He has received nearly $50,000 from the company’s PAC and its employees—most donating considerable sums—since his inaugural 2014 Senate campaign. Sullivan’s top donor overall is the billionaire-funded conservative anti-tax group Club for Growth.
ConocoPhillips CEO Ryan Lance has used similar talking points. Approving the Willow project, he said Monday, “fits within the Biden administration’s priorities on environmental and social justice.” Praising the White House’s decision, Murkowski called Willow “meticulously-planned, socially-just, and environmentally-sound.” ConocoPhillips is Murkowski’s top corporate campaign donor, having furnished her campaigns with more than $140,000 since 2003.
Surprise! It turns out that the process to create “biofuels” from plastic waste — a hallmark of Chevron’s “climate-friendly” fuel pledge — would be so toxic, it could literally cause cancer.
As The Guardian reports in tandem with ProPublica, records obtained by the news outlets reveal that, per the Environmental Protection Agency’s calculations, pollution from the plastic-derived jet fuel Chevron intends to start making would carry a one-in-four risk of cancer for anyone living near facilities that manufacture it.
Yet for some reason, the EPA signed off on the Chevron project, according to the reporting — and even skipped some key steps that would normally bar this sort of risky chemical from being produced.
Proposed as part of the Biden Administration’s response to the global climate crisis, plastic-derived biofuels seem, on their face, to provide both a solution to petroleum’s greenhouse gases and a way to tackle the overwhelming plastic waste problem to boot.
But the reality is far darker because, as this investigation and other big ones have found, the process by which plastic is broken down can produce emissions that could actually be worse for the environment than the burning of fossil fuels.
To add insult to injury, Pascagoula, the Mississippi town where Chevron plans to make the plastic-derived fuel — with the permission of the EPA, in spite of the known risks — is home to a primarily Black community. Given the increasingly well-documentedrealities of environmental racism, experts that the news outlets spoke to have expressed serious misgivings.
The one-in-four risk of cancer from the smoke stack pollution the Chevron facility will carry is, as the joint reporting notes, a whopping 250,000 times higher than what the EPA normally allows when approving new chemicals.
But as records obtained by The Guardian and ProPublica show, the agency not only approved the Chevron jet fuel while being aware of that staggering cancer risk, but also skipped a number of key tests that would normally be undertaken with such a seemingly-toxic chemical.
When asked why those tests weren’t done, an EPA spokesperson told the news outlets that the agency “does not believe these additional test results would change the risks identified nor the unreasonable risks finding.”
But when the outlets’ reporters asked Maria Doa, a veteran EPA official who is now the senior director of chemical policy at the nonprofit Environmental Defense Fund, if the jet fuel should be allowed to be produced, her answer was a resounding “no.”
“EPA should not allow these risks in Pascagoula or anywhere,” Doa said.
As toxicologist and former National Institute of Environmental Health Sciences director Linda Birnbaum told the news outfits, the move seems like bad news.
“That kind of risk is obscene,” Birnbaum said. “You can’t let that get out.”
Although President Joe Biden vowed on the campaign trail to phase out federal leasing for fossil fuel extraction, his administration approved more permits for oil and gas drilling on public lands in its first two years than the Trump administration did in 2017 and 2018.
According to the Center for Biological Diversity’s analysis of federal data released Wednesday, the Biden White House greenlit 6,430 permits for oil and gas drilling on public lands in 2021 and 2022—a 4.2% increase over former President Donald Trump’s administration, which rubber-stamped 6,172 drilling permits in its first two years.
“Two years of runaway drilling approvals are a spectacular failure of climate leadership by President Biden and Interior Secretary Deb Haaland,” said Taylor McKinnon of the Center for Biological Diversity. “Avoiding catastrophic climate change requires phasing out fossil fuel extraction, but instead we’re still racing in the opposite direction.”
Of the drilling authorized so far by the Biden administration, nearly 4,000 permits have been approved for public lands in New Mexico, followed by 1,223 in Wyoming and several hundred each in Utah, Colorado, California, Montana, and North Dakota.
According to the Center for Biological Diversity, these “Biden-approved drilling permits will result in more than 800 million tons of estimated equivalent greenhouse gas pollution, or the annual climate pollution from about 217 coal-fired power plants.”
Just last week, United Nations Secretary-General António Guterres told the elites gathered at the World Economic Forum in Davos that “fossil fuel producers and their enablers are still racing to expand production, knowing full well that their business model is inconsistent with human survival.”
Reams of scientific evidence show that pollution from the world’s existing fossil fuel developments is enough to push temperature rise well beyond 1.5°C above the preindustrial baseline. Averting calamitous levels of global heating necessitates ending investment in new oil and gas projects and phasing out extraction to keep 40% of the fossil fuel reserves at currently operational sites underground.
As a presidential candidate, Biden pledged to ban new oil and gas lease sales on public lands and waters and to require federal permitting decisions to weigh the social costs of additional planet-heating pollution. Although Biden issued an executive order suspending new fossil fuel leasing during his first week in office, his administration’s actions since then have run roughshod over earlier promises, worsening the deadly climate crisis that the White House claims to be serious about mitigating.
The U.S. Department of Interior (DOI) argued on August 24, 2021 that it was required to resume lease auctions because of a preliminary injunction issued by U.S. Judge Terry A. Doughty, a Trump appointee who ruled in favor of a group of Big Oil-funded Republican attorneys general that sued Biden over his moratorium. In a memorandum of opposition filed on the same day, however, the U.S. Department of Justice (DOJ) asserted that while Doughty’s decision prevented the Biden administration from implementing its pause, it did not compel the DOI to hold new lease sales, “let alone on the urgent timeline specified in plaintiffs’ contempt motion.”
Just days after Biden called global warming “an existential threat to human existence” and declared Washington’s ostensible commitment to decarbonization at the COP26 climate summit in Glasgow, the DOI ignored the DOJ’s legal advice and proceeded with Lease Sale 257. The nation’s largest-ever offshore auction, which saw more than 80 million acres of the Gulf of Mexico offered to the highest-bidding oil and gas giants, was blocked in January 2022 by a federal judge who wrote that the Biden administration violated environmental laws by not adequately accounting for the likely consequences of resulting emissions.
Despite Biden’s pledge to cut U.S. greenhouse gas pollution in half by the end of this decade, the DOI’s Bureau of Land Management held lease sales in several Western states in 2022, opening up tens of thousands of acres of public land to fossil fuel production. The DOI has so far announced plans for three new onshore oil and gas lease sales in 2023. The first will offer more than 261,200 acres of public land in Kansas, Nebraska, New Mexico, and Wyoming to the highest-bidding drillers. The second and third will put a total of 95,411 acres of public land in Nevada and Utah on the auction block.
In addition, the Biden administration published a draft proposal last summer that, if implemented, would permit up to 11 new oil and gas lease sales for drilling off the coast of Alaska and in the Gulf of Mexico over a five-year period.
The president’s 2021 freeze on new lease auctions was meant to give the DOI time to analyze the “potential climate and other impacts associated with oil and gas activities on public lands or in offshore waters.” Nevertheless, the agency’s long-awaited review of the federal leasing program effectively ignored the climate crisis, instead proposing adjustments to royalties, bids, and bonding in what environmental justice campaigners described as a “shocking capitulation to the needs of corporate polluters.”
The U.S. Geological Survey has estimated that roughly 25% of the country’s total carbon dioxide emissions and 7% of its overall methane emissions can be attributed to fossil fuel extraction on public lands and waters. According to peer-reviewed research, a nationwide prohibition on federal oil and gas leasing would slash carbon dioxide emissions by 280 million tons per year.
The Biden administration “has not enacted any policies to significantly limit drilling permits or manage a decline of production to avoid 1.5°C degrees of warming,” the Center for Biological Diversity lamented. The White House even supported the demands of right-wing Democratic Sen. Joe Manchin (W.Va.)—Congress’ leading recipient of fossil fuel industry cash and a long-time coal profiteer—to “add provisions to the Inflation Reduction Act that will lock in fossil fuel leasing for the next decade.”
On numerous occasions, including earlier this month, progressive lawmakers and advocacy groups have implored the Biden administration to use its executive authority to phase out oil and gas production on public lands and in offshore waters. A petition submitted last year came equipped with a regulatory framework to wind down oil and gas production by 98% by 2035. According to the coalition that drafted it, the White House can achieve this goal by using long-dormant provisions of the Mineral Leasing Act, Outer Continental Shelf Lands Act, and the National Emergencies Act.
“The president and interior secretary have the power to avoid a climate catastrophe, but they need to change course rapidly,” McKinnon said Wednesday. “Strong executive action can meet the climate emergency with the urgency it demands, starting with phasing out fossil fuel production on public lands and waters.”
In November 2020, just two weeks after the most divisive U.S. election of our lifetimes, billionaire Charles Koch published a book called Believe in People: Bottom-Up Solutions for a Top-Down World. A few days before that, on November 13, The Wall Street Journal published a story with the headline “Charles Koch Says His Partisanship Was a Mistake.” Koch, the article noted, wanted a “final act building bridges across political divides.”
The same day, The Washington Post headlined a puff piece about the book: “Charles Koch congratulates Biden and says he wants to work together on ‘as many issues as possible.’ ” The writer, political columnist James Hohmann, informed his readers that the chief executive officer of Koch Industries said “there is too much hate in the country and lamented how emboldened extremists have become” (Hohmann’s words). Nearly all of the major media outlets that reported on the book carried similar exclamatory quotes from Koch about his investments in the Republican Party: “Boy, did we screw up.” “What a mess!” “This is crazy! Are we going to have a civil war?”
Heaving a collective sigh of relief that the donor and strategist most responsible for the radicalization of the Republican Party had now committed to a mellow “final act,” news outlets told their audiences, in effect, that they no longer needed to worry about the Koch network. It had been tamed by the shock and horror of Donald Trump. But what mainstream news editors seemed to forget was that they were covering a specialist in strategic disinformation, who had perfected the practice of deceiving the public during his network’s three decades of climate change denial.
Koch, the single most influential billionaire shaping American political life, never changed course. And the head fake he pulled off in 2020 succeeded in securing for his vast donor network—and the hundreds of organizations they underwrite—the freedom to operate, virtually without scrutiny, over the two years since. In that time, far from ceasing their efforts to divide the country, they have ramped them up. Like a snake shedding its skin as it grows, Koch was merely rebranding—yet again after exposure—and grouping his numerous operations under a sunny new name: Stand Together.
In August, the Center for Media and Democracy (CMD) reported that Koch-funded organizations spent over $1.1 billion in the 2020 election cycle. At the same time his book claiming to have changed course was in press, Koch spent almost 50 percent more than the record amount the Koch network had raised in the 2016 cycle: $750 million. Koch did not endorse Trump, though his spending buoyed the top of the ticket and helped maintain a GOP Senate majority to secure Koch-backed policies and judicial nominees embraced by Trump.
One of these organizations, Koch’s Americans for Prosperity (AFP), a 501(c)(4) tax-exempt organization, claimed it was involved in more than 270 races in the 2020 election, reaching almost 60 million voters with door-knocking, phone calls, postcards, digital ads, and more. AFP also played heavily in the battle for U.S. Senate seats in Georgia, in January 2021—even as Koch was still getting favorable coverage for his supposed withdrawal from divisive electoral politics. AFP Action, the super PAC arm, alone raised and spent $60 million nationwide in that election cycle.
Meanwhile, other key organizing enterprises, think tanks, litigation outfits, campus centers, and more that were previously backed by the Koch network continue operating today, sometimes under new names, and with expanded funding. These include endeavors we consider unethical, only some of which we have the space to highlight here.
Take, for example, Koch’s longest running quest: enchaining democracy by rigging the rules of governance to free corporations from customary oversight and to prevent the will of the vast majority of Americans from securing federal, state, and local policies to improve their lives. With the connivance of Trump, the generalship of Federalist Society leader Leonard Leo, and the well-funded campaigning of Leo’s Judicial Crisis Network, the arch-right billionaire succeeded in capturing a supermajority in the U.S. Supreme Court. Koch had told his allied billionaire backers that this was one of his top priorities for the Trump Administration—along with the dramatic tax cuts for corporations and the wealthy that he also secured.
Senator Sheldon Whitehouse, Democrat from Rhode Island, a climate hero and senior member of the Senate Judiciary Committee, exposes how they did it in a recently published book, The Scheme: How the Right Wing Used Dark Money to Capture the Supreme Court. The long effort to reshape the judicial system, going back to the notorious Lewis Powell Memo of 1971, culminated in the Trump Administration’s appointment of more than 230 “business-friendly” federal judges, including three Supreme Court Justices, in a project overseen by longtime Koch allies Leo and Donald McGahn, who served as Trump’s legal counsel until 2018. The 6-3 stacked court is already delivering bombshell decisions for the coalition that put it in power, from undermining our options for mitigating devastating climate change and limiting the power of agencies to regulate corporations, to revoking people’s Constitutional freedom to decide whether and when to bear children. The current court term with the Koch-backed faction in control is expected to soon overthrow affirmative action and other hard-won reforms.
The Koch-funded American Legislative Exchange Council (ALEC) also continues its long campaign to shackle democracy on behalf of its corporate backers. Passing voter ID restrictions that make it harder for Americans to exercise their right to vote became a top ALEC priority after the United States elected its first Black President, Barack Obama. That measure was first voted on at an ALEC task force meeting co-chaired by the National Rifle Association in 2009.
With that mission largely accomplished in states controlled by the GOP, ALEC has now effectively outsourced its voter suppression efforts to Leo’s Honest Elections Project, which it works with on disinformation efforts to buttress so-called model bills.
The rule-rigging endgame of the Koch network has advanced significantly over the last few years: holding the first Constitutional convention since 1787.
ALEC long urged its state legislative members to use their power to “preempt” progressive local policies adopted by cities and towns, including popular living-wage measures. From the outset of the COVID-19 pandemic, that anti-democratic strategy became deadly, as ALEC legislators along with the State Policy Network, an umbrella group of state-level think-and-act tanks long supported by Koch, blocked sensible measures, such as masking, in Ron DeSantis’s Florida, Greg Abbott’s Texas, and other states.
Additionally, the rule-rigging endgame of the Koch network has advanced significantly over the last few years: holding the first Constitutional convention since 1787. The plan is to fundamentally transform government in the United States in ways desired by arch-right corporations, but unachievable through the democratic process—that is, without the consent of the majority of American voters. Common Cause has called the convention prospect “the most serious threat to our democracy flying almost completely under the radar.”
ALEC has played a central role in promoting the extremist groups pushing for a Constitutional convention, such as one that calls itself the “Convention of States,” led by a former Tea Party figurehead and gun-rights zealot, Mark Meckler. In a conversation with a friendly audience, he bluntly stated the goal of the convention movement: “to reverse 115 years of progressivism.” In December 2021, ALEC’s States and Nation Policy Summit hosted former Republican U.S. Senator from Pennsylvania Rick Santorum, who had joined the Convention of States that fall, to make the case.
To ensure that reactionary billionaires have the opportunity to rewrite the Constitution and tick off other items on their ambitious agenda, Koch-backed operations invested a fortune in supporting Republican candidates in the 2022 midterms and in get-out-the-vote efforts to put them in office.
Americans for Prosperity claimed to have knocked on three million doors as of October 6, 2022, and planned to hit six million total by Election Day. It also claimed to be involved in more than 450 federal and state races in October, almost twice as many as 2020. It has spent tens of millions of dollars to malign Biden Administration policies in swing states and is specifically targeting swing voters.
In the final weeks before votes were counted in the midterms, The Wall Street Journal reported, the Koch-backed AFP Action was bolstering its ground game in swing states with another $25 million “jolt” from the deceptively named umbrella initiative Stand Together. That brings the spending of that single arm of Koch’s political operations in the recent election cycle to at least $70 million.
In the last two years, the network has also become more involved in ginning up MAGA-associated bigotry, fear, and intimidation on multiple fronts to achieve its political ends. To borrow the language of Koch’s cynical claims of shock about national division in 2020, his grantees since then have deliberately amped up the “hate in the world” and “emboldened extremists.” (As The Progressive previously reported, Koch’s own extremist roots run deep.)
Most diabolical is the leveraging of the white supremacist reaction to the long-overdue reckoning set off by the murder of George Floyd through a dishonest campaign against the purported teaching of critical race theory (CRT) in public schools. Terrified that growing interracial commitment to redress structural racism would prove the value of government remedies, eager to distract Republican voters from Biden’s popular policies, and seeing an opportunity to advance the privatization of public education by tapping into pandemic-driven parental anxiety, the Koch network invested heavily in organizations that went on to attack teachers and school boards over CRT. (Koch’s Stand Together spokesperson claims that they did not support the attacks, though the Koch fortune has funded some of the groups that are driving them.)
On December 3, 2020, for example, the Koch-funded ALEC hosted a workshop titled “Against Critical Theory’s Onslaught,” which featured the Manhattan Institute’s Christopher Rufo, who masterminded this CRT disinformation campaign. It was attended by thirty-one legislators from twenty states.
ALEC continued to include CRT in its efforts to push privatizing education at its winter 2021 meeting. On the same day that meeting started, the Manhattan Institute and the Heritage Foundation—both of which have received funding from the Koch fortune for years—published a letter calling for more “transparency” and rejecting CRT in schools.
Just as Koch-funded operations weaponize and intensify racism to secure political power, they also exploit and escalate misogyny, homophobia, and transphobia by any means to boost Republican power.
In October 2021, less than two weeks before the Virginia gubernatorial election, another Koch grantee, the Independent Women’s Forum (IWF), launched a website called ToxicSchools.org through its action arm, Independent Women’s Voice (IWV). The site used grossly misleading graphics to claim that Virginia schools were giving students access to pornographic materials. The strategy of inducing shock and outrage in parents to get them to vote for Republican candidates proved so useful in Virginia that it has become a template for an escalating nationwide campaign, one result of which is that embattled teachers are quitting in droves.
Just as Koch-funded operations weaponize and intensify racism to secure political power, they also exploit and escalate misogyny, homophobia, and transphobia by any means to boost Republican power. Few major for-profit media outlets—or public outlets funded in part by corporations, such as NPR—cover Koch funding for astroturfing anti-abortion, anti-feminist, and homophobic groups, which have been very active since 2020.
Susan B. Anthony Pro-Life America, a Koch grantee, trained ALEC’s state leaders on abortion messaging in March 2022 and presented at other recent ALEC meetings. Meanwhile, Leo—the longtime Koch grantee, strategist, and a leader of the Federalist Society—helps to steer a host of anti-abortion groups, including Students for Life of America, which opposes exceptions for rape and incest in the abortion bans it promotes.
Other Koch grantees have seen the potential for a big vote harvest in attacking trans Americans, with IWF and IWV in the lead. Among IWF/IWV’s goals with its Orwellian “Women’s Bill of Rights” is the purported “right” of cisgender women to exclude transgender women from gender-affirming spaces, a position they promoted at their anti-trans event “Our Bodies, Our Sports” last summer.
The emphasis on women’s sports is opportunistic, because for most of IWF’s history it has attacked women’s rights in athletics, suing on behalf of men’s teams and most recently filing a brief against the equal pay claims of the U.S. women’s national team in soccer.
IWF/IWV also has an anti-trans “parental rights” video series that is being used to scaremonger with the imputation that public schools are pressuring kids to transition and then hiding it from parents. This comes from a group that ran advertising campaigns to back GOP Senate candidates who had notoriously claimed that women could not get pregnant from rape, but if they did, it was “God’s will.” Inventing phony threats, it has denied actual harms.
As chilling as these examples may be, they are only a few of the ways that Koch and his network of reactionary wealthy donors have continued to divide the American electorate. Having sown the seeds of the crisis in our democracy, Koch is demonstrably eager to reap the harvest. He and those he supports are using the courts and other levers of power to reclaim for corporations and rich individuals a power to dominate the majority not seen since the Gilded Age of the late nineteenth century—now, as then, in the name of liberty.
Far from having retreated from politics as he claimed in 2020, Koch is approaching victory in the goals he has pursued patiently and relentlessly for more than a half-century. And he is grooming his son, Chase Koch, as his successor to carry on this work, as reported by CMD, with a 501(c)(4) whose assets reached $1.3 billion in 2020. If the elder Koch continues to get mainstream news outlets and the public to look away, democracy in the United States may well be doomed.
Christmas Day outages add to an alarming string of incidents with similar power grid vandalism in Oregon and North Carolina
More than 14,000 people suffered power outages in Washington state on Christmas Day following burglaries and a series of vandalisms at different power stations.
The Pierce county sheriff said in two statements that no suspects have yet been identified for the incidents.
Secret court set up under energy charter treaty accused of conflicts of interest, self-regulation issues and institutional bias
A secret court system that allows fossil fuel investors to sue governments for vast amounts of money has been accused of institutional bias, self-regulation issues and perceived conflicts of interest, as the drumbeat of EU countries leaving threatens to turn into a samba march.
On Wednesday, the EU will be meeting to discuss reform of the energy charter treaty (ECT) but at the end of last week, Germany became the latest European country to announce its intention to leave the treaty. Slovenia exited earlier in the week, after similar moves by France, the Netherlands, Spain and Poland. The UK is now one of the last large economies to remain in the ECT.
OPEC+’s output cut is complicating a hotly contested midterm election for the Biden administration.
The oil group, lead by Saudi Arabia and Russia, slashed its output target Wednesday by 2 million barrels per day.
The White House blasted the move and accused OPEC+ of “aligning with Russia.”
OPEC+ is adding political pressure on the Biden administration ahead of a hotly contested midterm election as gasoline prices head back up.
The oil group on Wednesday slashed its oil production quota by 2 million barrels per day. Since several members are already pumping well below their quotas, the actual reduction in supply will likely be less than half that amount, borne primarily by de facto leader Saudi Arabia and key Middle Eastern allies like the UAE and Kuwait.
Still, the White House blasted the move and accused OPEC+ of “aligning with Russia.” Underscoring the high stakes for the Biden administration, officials tried to stop OPEC+ from cutting back and drafted talking points to describe the move as a “total disaster” and a “hostile act,” according to CNN.
In a note titled “OPEC+ takes on the West,” analysts at Goldman Sachs also pointed out the quota cut is perhaps equally a political one as it is an attempt to grow short-term profits. “In addition, the speed at which such an agreement was formed suggests the accord was a political statement as well.”
Goldman added that some OPEC+ members were displeased with increased flows from US strategic reserves, Western plans to cap prices in response to Russia’s invasion of Ukraine, and efforts to revive the Iran nuclear deal, which would brings more oil supply back to the market.
On Thursday, President Biden acknowledged he was disappointed by the OPEC+ decision but said “There’s a lot of alternatives. We haven’t made up our mind yet.”
The White House indicated Wednesday that less oil production from OPEC+ could trigger more releases from the US Strategic Petroleum Reserve. And ahead of the OPEC+ meeting, Bloomberg reported that the White House asked the Energy Department to look into whether a ban on exports of gasoline would lower prices.
Biden has personally invested significant political capital in Saudi Arabia, which has spurned his requests to produce more oil and lower prices. In July, he visited the kingdom as part of a trip to the Middle East and met with Crown Prince Mohammed bin Salman, despite criticizing him previously for his reputed role in the murder of journalist Jamal Khashoggi in 2018.
The following month, OPEC+ announced in output increase of 100,000 barrels per day, an amount so small that experts said it would do little to move energy markets. In September, it trimmed production by 100,000 bpd, leading up to Wednesday’s cut of 2 million bpd.
After the latest OPEC+ meeting, Goldman Sachs lifted its price target on oil to $110 a barrel from $100. But the effect on retail gas prices that motorists will pay is less straight forward, as the US fuel market is also swayed by maintenance outages and certain fuel blends at key regional refining hubs.
“The OPEC decision today will basically cause #gasprices only in a few regions to go up for now… East Coast, South, Northeast, Rockies potentially,” Patrick De Haan, head of petroleum analysis at GasBuddy tweeted Wednesday. “West Coast, Great Lakes, Plains will see prices drop as refinery issues are addressed. Yes, very complex.”
Still, oil prices are up 7% since reports of a production cut first emerged last week. And gas prices have been slowly creeping up again after falling by nearly 100 consecutive days over the summer. The current national average for a gallon of gas is $3.867, up 2.3% from a month ago, according to AAA.
Why energy price spikes are threatening the financial system. And any derivatives bailout will take prescedence over businesses and housholds.
In July 2020, I interviewed the EV battery mineral experts at RK Equity for the first time. The core story was clear: there was growing demand for electric vehicles, but not enough investment in EV battery mineral mining, and lithium mining in particular. The result was as predictable as could be for an Econ 101 […]
The Wall Street Journal (8/10/22) underexposes its photos of a lithium mine in Chile—the way corporate media traditionallyindicate a socialist dystopia.
True to its name, the Wall Street Journal never fails to lay bare its corporate sympathies. In a recent feature headlined “The Place With the Most Lithium is Blowing the Electric-Car Revolution” (8/10/22), the Journal warps anti-neoliberal and Indigenous resistance to ecological destruction and resource plundering into pesky obstacles to green capitalist innovation.
The story is one of corporate tragedy: The so-called “Lithium Triangle,” a region that covers parts of Chile, Bolivia and Argentina, is flush with the white metal that is integral to electric vehicle (EV) and battery production. But EV companies don’t have the full access they want, as Indigenous groups and leftist governments resist these foreign multinationals from taking the spoils and harming the environment while they do it.
‘A major bottleneck’
Thea Riofrancos (Logic, 12/7/19) critiques “‘green extractivism’: the subordination of human rights and ecosystems to endless extraction in the name of ‘solving’ climate change.”
Reporter Ryan Dube deserves credit for quoting one Indigenous leader and one environmentalist about their concerns with lithium production in the region. These South American Indigenous populations reside in what climate justice groups have termed sacrifice zones, or what Thea Riofrancos (Logic, 12/7/19) has called the “extractive frontiers of the energy transition.” Lithium production in places like Chile’s Salar de Atacama induce water shortages, threatening the environment’s biodiversity and the livelihoods of those surrounding the salt flats—and often in breach of Indigenous peoples’ right to prior consultation and consent.
But these quotations and brief descriptions are eclipsed by pro-production voices, and language describing their resistance as “setbacks,” or a “challenge” to the “battery makers [who] desperately need” the lithium. We are told that the resistance is “stifling” production. That production has “suffered” as leftist governments seek “greater control over the mineral and a bigger share of profits.”
The muted treatment of Indigenous and environmental groups’ concerns works to reduce the “Lithium Triangle” to just that—its lithium. Indeed, the article warns that the entire South American continent could become “a major bottleneck” for the EV industry.
According to the Journal, the collection of countries that compose this “Saudi Arabia of lithium” are not equipped to reap their own land’s valuable resources. The article quotes Benjamin Gedan, acting director of the Latin American program at the US government-funded Wilson Center think tank (who FAIR—4/30/19—noted in 2019 expressed support for regime change in Venezuela):
Latin America specializes in killing golden geese, and one of the quickest ways to do so is through resource nationalism…. This boom could very quickly turn to bust if bad policies are brought forward.
This narrative is as patronizing as it is old. European colonists justified their genocidal conquest of the American continents by claiming Indigenous peoples weren’t properly using the lands they were living on. Today, EV companies and sympathetic analysts claim entitlement to South America’s lithium reserves because its emergent leftist governments won’t cede control of the resource to Western capital interests.
‘Ultimate cautionary tale’
Evo Morales (Jacobin, 10/7/20): “The coup was directed against us and for our natural resources, for lithium.”
The latest corporate worry is on Chile’s election last year of leftist President Gabriel Boric, who seeks to create a state lithium company to compete with private corporations. The country’s proposed rewrite of its dictatorship-era constitution (FAIR.org, 8/1/22) also has multinationals biting their nails, as it would expand Indigenous and environmental rights over mining.
Indeed, the Chilean popular uprisings in 2019 that prompted the country’s ongoing reforms were in part driven by the inequality and harm caused by the nation’s two private lithium producers—one of which has been run by the billionaire son-in-law of the former dictator Augusto Pinochet (Bloomberg, 6/23/22).
But Gedan and the Journal crown Bolivia, the country with the largest proportion of Indigenous people in South America, as the “ultimate cautionary tale” for resource nationalism. The article notes Bolivia’s lackluster lithium production since its former president Evo Morales nationalized the industry in 2008, with hopes to eventually make the country a battery and EV manufacturer itself.
Missing from the history lesson were the barriers Morales’ socialist government faced as a Global South country subjected to economic underdevelopment as a commodity exporter for richer nations. Most recently, that included the right-wing, US-backed coup of Morales’ government in 2019 (FAIR.org, 11/15/19), which—though contested—some believe was driven by multinational corporations who opposed his administration’s lithium production policies (Jacobin, 10/7/20). In any case, the coup illustrated the ruthlessness with which the US rejects Latin American governments that dare question Western control over their political and economic systems.
The Journal’s Dube also seemed to forget that the Morales government’s nationalization of hydrocarbons played a key role in the country cutting poverty by 42% and extreme poverty by 60% (CEPR, 10/17/19), among other internationally praised achievements. Indeed, Morales’ plans for an EV and battery industry in the country was a means to break its dependency on its highly successful state hydrocarbon sector.
Revolution for whom?
Open Veins of Latin America, by Eduardo Galeano
Most curiously missing, however, is critical discussion of the so-called “electric-vehicle revolution” the headline warns South America is “blowing.” A revolution for what? Electric vehicles for whom?
The piece fails to describe the alleged importance of EVs in mitigating the climate crisis. The word “climate” isn’t even used once. While lithium mining will be critical to putting the brakes on the climate catastrophe, it is debatable whether a revolution of individual electric cars will be our savior—rather than, say, a more equitable and much less resource-consumptive expansion of public transportation (Jacobin, 6/10/22).
But perhaps the absence of climate context is truer to the motives of EV companies’ race for Latin America’s golden geese, wrecking environments and lives in the process: corporate profits.
Emergent leftist governments in South America are resisting Western corporations’ meddling because they know that the communities most directly impacted by lithium mining won’t be the ones driving the Teslas at the end of the supply chain. The “revolution” was never for Latin America.
Western multinationals and their boosters at the Journal may long for a return to the “open veins of Latin America,” as Uruguayan author Eduardo Galeano described the region’s outflowing plunder by colonial and neocolonial powers. They may view violating Indigenous rights and destroying ecosystems as the costs of doing business.
But the Indigenous groups and anti-neoliberal movements fighting to keep those veins closed—or open on their own terms—are not the obstacles. The Wall Street Journal shouldn’t frame them as such.
ACTION ALERT: You can send a message to the Wall Street Journal at wsjcontact@wsj.com (or via Twitter: @WSJ)Please remember that respectful communication is the most effective. Feel free to leave a copy of your communication in the comments thread.
In July 2020, I interviewed the EV battery mineral experts at RK Equity for the first time. The core story was clear: there was growing demand for electric vehicles, but not enough investment in EV battery mineral mining, and lithium mining in particular. The result was as predictable as could be for an Econ 101 […]
