Department of Energy Caters to the Needs of Fossil Fuel Industries

The late, great journalist I.F. Stone used to say that the evidence of government scandals lay in publicly available documents as much as in concealed material. Read what the government actually says, Izzy claimed, and you will find scandals aplenty.

That insight holds true today.
Consider the recent testimony of the acting director of policy at the U.S. Department of Energy, Melanie Kenderdine, before the House Judiciary Committee. In describing the Clinton administration’s energy record in the context of soaring gasoline prices, Kenderdine offered an astounding list of subsidies, research giveaways, tax credits, loan supports, privatizations and deregulatory initiatives to benefit oil producers.

As described by Kenderdine, corporate welfare has been the intentional centerpiece of the administration’s energy policy, notwithstanding some relatively minor efficiency programs.

“The President has proposed tax incentives for 100 percent expensing of geological and geophysical costs, and allowing the expensing of delay rental payments” [which would lower the cost of drilling on federal lands], Kenderdine testified.

“The administration has also supported and promoted virtually all significant energy legislation enacted by the Congress over the last seven years,” she testified.

Then she launched into the stunning litany of benefits conferred on the oil industry in recent years. The handout legislation to the industry includes, as Kenderdine listed it, “Deepwater Royalty Relief; lifting the ban on the export of Alaska North Slope Oil; Royalty Simplification; privatization of the Elk Hills Naval Petroleum Reserve; the transfer and lease of Naval Oil Shale Reserves One and Three for production; and creation of a guaranteed loan program for small domestic oil and gas producers.”

And how has the oil industry responded to the bountiful taxpayer handouts and subsidies? By asking the taxpayers to pay staggering prices of gasoline. Plunder at the pump is the way the rapacious, hyper-profitable oil companies “thank” consumers and taxpayers.

To pick just one item from that list, privatization of Elk Hills in California constituted the fulfillment of a long-standing dream of the oil industry. Bribes and a secret oil lease for Elk Hills, along with a lease to another federal property, the Teapot Dome field, led to the infamous Teapot Dome scandal which forced the resignation of two cabinet officials in the 1920s.

After the Clinton administration’s auction of the land, the Tucson-based Southwest Center for Biological Diversity, the Sierra Club and a Native American tribe governing council filed suit to block Occidental, the high bidder for Elk Hills, from acquiring it. They said Occidental’s plans would potentially violate the Endangered Species Act by destroying valuable habitats and might also disrupt Native American funeral grounds.
But there is more to the administration’s generosity than just making it cheaper to drill for oil and making more federal lands available for drilling.

And on the motor vehicle side, the administration has allocated more than a billion dollars to the Partnership for a New Generation of Vehicles (PNGV), a government-industry research venture that has done little more than provide a smokescreen behind which the industry can hide as it opposes more stringent fuel efficiency standards. Those standards remain unchanged since 1985, and overall vehicle fuel efficiency is at almost the same level as at the beginning of the Clinton administration. Fortunately, the Congress has been less interested in supporting several corporate welfare measures than the Clinton administration. Earlier this year, the House of Representatives narrowly approved an amendment, introduced by Representatives John Sununu, R-New Hampshire, and Rob Andrews, D-New Jersey, to cut $126 million from PNGV. The House also approved cuts in dirty fuel research programs that go nowhere.

The real solutions to energy issues — including the ever-more ominous and pressing challenge of global warming — lie in energy efficiency and especially in renewables like solar and wind energy.

But you have to read deep into Kenderdine’s testimony to find mention of solar and wind energy — a reflection of the shamefully and scandalously low priority attached to these technologies during the past two decades by a succession of administrations that have prioritized the needs and greed of the oil and fossil fuel industries, while failing to take measures to develop the technologies that could help us achieve a sustainable and prosperous future.