Papers Detail Industry's Role in Cheney's Energy Report

The Washington Post reports:

At 10 a.m. on April 4, 2001, representatives of 13 environmental groups were brought into the Old Executive Office Building for a long-anticipated meeting. Since late January, a task force headed by Vice President Cheney had been busy drawing up a new national energy policy, and the groups were getting their one chance to be heard.

Cheney was not there, but so many environmentalists were in the room that introductions took up "about half the meeting," recalled Erich Pica of Friends of the Earth. Anna Aurilio of the U.S. Public Interest Group said, "It was clear to us that they were just being nice to us."

A confidential list prepared by the Bush administration shows that Cheney and his aides had already held at least 40 meetings with interest groups, most of them from energy-producing industries. By the time of the meeting with environmental groups, according to a former White House official who provided the list to The Washington Post, the initial draft of the task force was substantially complete and President Bush had been briefed on its progress.

In all, about 300 groups and individuals met with staff members of the energy task force, including a handful who saw Cheney himself, according to the list, which was compiled in the summer of 2001. For six years, those names have been a closely guarded secret, thanks to a fierce legal battle waged by the White House. Some names have leaked out over the years, but most have remained hidden because of a 2004 Supreme Court ruling that agreed that the administration's internal deliberations ought to be shielded from outside scrutiny.

One of the first visitors, on Feb. 14, was James J. Rouse, then vice president of Exxon Mobil and a major donor to the Bush inauguration; a week later, longtime Bush supporter Kenneth L. Lay, then head of Enron Corp., came by for the first of two meetings. On March 5, some of the country's biggest electric utilities, including Duke Energy and Constellation Energy Group, had an audience with the task force staff.

British Petroleum representatives dropped by on March 22, one of about 20 oil and drilling companies to get meetings. The National Mining Association, the Interstate Natural Gas Association of America and the American Petroleum Institute were among three dozen trade associations that met with Cheney's staff, the document shows.

The list of participants' names and when they met with administration officials provides a clearer picture of the task force's priorities and bolsters previous reports that the review leaned heavily on oil and gas companies and on trade groups -- many of them big contributors to the Bush campaign and the Republican Party. But while it clears up much of the lingering uncertainty about who was granted access to present energy policy views to Cheney's staff, it does not entirely explain why the Bush administration fought so hard to keep it and other as-yet-unreleased internal memos secret.

Contacted over the past week, several people who met with the task force's staff described their meetings as part of a normal "interagency" review of major domestic policy and expressed bewilderment that the White House and Cheney labored to keep the deliberations out of the public eye.

"I never knew why they fought so hard to keep it secret," said Charles A. Samuels, outside counsel to the Association of Home Appliance Manufacturers, which participated in a March 13 meeting to discuss the idea of tax credits for super-efficient appliances. "I am sure the vast majority of the meetings were very policy-oriented meetings -- exactly what should take place."

Provided a copy of the list, Cheney's office said he would not comment on it. "The vice president has respectfully but resolutely maintained the importance of protecting the ability of the president and vice president to receive candid advice on important national policy matters in confidence, a principle affirmed by the Supreme Court," spokeswoman Lea Anne McBride said by e-mail.

Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, who unsuccessfully pushed for details of the meetings, said it is "ridiculous" that it has taken six years to see who attended the meetings. He described the energy task force as an early indicator of "how secretively Vice President Cheney wanted to act."

Waxman said he was not surprised to see the prevalence of energy industry groups on the list of meetings. "Six years later, we see we lost an opportunity to become less dependent on importing oil, on using fossil fuels, which have been a threat to our national security and the well-being of the planet," he said.

The development of a new energy policy was Bush's first major initiative after he took office. He turned over responsibility of it to Cheney, a former chairman of Halliburton Co., a Dallas-based energy services firm.

Mindful of the disastrous fate that befell Hillary Rodham Clinton's unwieldy health-care task force, which included about 500 staff members and 34 working groups, Cheney kept his energy task force small and lean. Instead of a 1,300-page report, he aimed for something much shorter: The final product was 170 pages.

From the beginning, it was clear that Cheney was running the show, chairing meetings of the task force -- made up of about a dozen Cabinet officers and senior officials -- in his ceremonial office in the Eisenhower Executive Office Building. Much of the task force's work was done by a six-person staff, led by its executive director, Andrew D. Lundquist, a former aide to Republican Sens. Ted Stevens and Frank Murkowski of Alaska. In 2000, Lundquist was the Bush campaign's energy expert; Bush nicknamed him "Light Bulb."

Today, Lundquist is a lobbyist, and he has represented some of the companies who appeared before the task force, such as BP, Duke Energy and the American Petroleum Institute. He did not return phone calls for this article.

Back in 2001, Lundquist was the person to see, and the document suggests that he and his colleagues consulted widely with energy company executives and their lobbyists. That was especially true in the early stages of the project, which focused heavily on how to stimulate domestic oil drilling, promote nuclear power and coal, and respond to the Western electricity crisis, which had caused soaring rates and blackouts in California.

Jack N. Gerard, then with the National Mining Association, had a meeting with Lundquist and other staffers in February. He urged the administration to give the Energy Department responsibility for promoting technology for easing global warming and to keep the issue away from the Environmental Protection Agency, which could issue regulations on greenhouse gas emissions. The administration adopted that position.

Another visitor in March was Eli Bebout, an old friend of Cheney's from Wyoming who serves in the state Senate and owns an oil and drilling company. Bebout said he presented a report to Cheney's staff on behalf of a group of Western state officials recommending increased drilling, use of nuclear power and attention to renewable resources. Bebout said he had been scheduled to meet with Cheney but the vice president was ill.

One advocacy group that visited was the Council of Republicans for Environmental Advocacy, founded in 1998 by Grover Norquist and Gale A. Norton, who became Bush's first interior secretary. Later, the group was run by Italia Federici, who was involved socially with Steven Griles. Griles, then Norton's deputy at Interior, was recently sentenced to prison for obstructing a Senate investigation of disgraced lobbyist Jack Abramoff.

Red Cavaney, president of the American Petroleum Institute, also met with Lundquist, the document shows. Cavaney said they discussed position papers that the API had given to both presidential campaigns and to new members of Congress.

"We're in the business of routinely providing advocacy materials," Cavaney said. "Speaking for myself, I had zero hand in authoring or sitting with anyone from that task force and changing anything."

But the API did seem to have influence with the administration, according to a document obtained by the National Resources Defense Council.

Jim Ford of the API sent Joseph T. Kelliher, then an Energy Department official and now chairman of the Federal Energy Regulatory Commission, copies of the API's well-known positions, along with a "suggested executive order to ensure that energy implications are considered and acted on in rulemakings and executive actions."

Ford's memo was dated March 20, 2001. In May that year, Bush issued an executive order similar to API's proposal.

Cheney appears to have played a more behind-the-scenes role in the task force's deliberations, the document indicates, listing only a handful of meetings with the vice president. Those included a previously reported meeting with Lay, who died last year; a meeting with officials from Sandia National Laboratories to discuss their economic models of the energy industry; and two sets of meetings with lawmakers. Cheney had other meetings, such as with John Browne, then the chief executive of BP, that were not listed on the task force's calendar.

The vice president also met with energy experts he had known, such as J. Robinson West, chairman of the Washington-based consulting firm PFC Energy and an old friend of Cheney's.

Those who met with Cheney said he was intensely interested in waning U.S. energy supplies, even though prices of oil and natural gas were much lower than they are today.

West agreed, and still agrees, with Cheney about opening up more areas in the United States and offshore for oil drilling, but he said he thinks the administration ended up not doing enough to dampen energy demand. West said he also urged in vain that the administration pursue a cap-and-trade system that would include China and India in an effort to reduce greenhouse gas emissions.

"I don't agree with the administration on a number of issues," said West, who gave a memo to Cheney with his views. "But this issue of Cheney being a stooge of the oil industry . . . there's nothing there."

Cheney and Lundquist also met with Daniel Yergin, chairman of Cambridge Energy Research Associates and author of "The Prize," a history of the oil industry. Yergin recalls discussing energy efficiency and natural gas data, which were then showing that increased drilling had for the first time not raised U.S. production.

The task force issued its report on May 16, 2001. Though the report was roundly criticized by environmental groups at the time, some energy experts say that in retrospect it appears better balanced than the administration's actual policy.

Divided into eight chapters, the report correctly forecast higher energy prices, stressed energy efficiency and conservation, and pushed for boosting domestic conventional energy supplies and increasing use of renewable energy. Although it advocated wider drilling and omitted climate-change measures, it also said that "using energy more wisely" was the nation's "first challenge."

Some key proposals, such as opening the Arctic National Wildlife Refuge to oil drilling, have never won congressional approval, but some measures to encourage oil and gas production, coal output, and the development of biofuels and nuclear power have been included in Bush's budgets and in the 2005 energy bill.

"Cheney had his finger on a critical issue," said David G. Hawkins, a climate expert at the Natural Resources Defense Council. "He just pushed it in the wrong direction."

Whose Oil Is It, Anyway?

Today more than three-quarters of the world’s oil is owned and controlled by governments. It wasn’t always this way. Until about 35 years ago, the world’s oil was largely in the hands of seven corporations based in the United States and Europe. Those seven have since merged into four: ExxonMobil, Chevron, Shell and BP. They are among the world’s largest and most powerful financial empires. But ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back.

In the NYTimes, Antonia Juhasz writes:
Iraq’s oil reserves — thought to be the second largest in the world — have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, “Iraq possesses huge reserves of oil and gas — reserves I’d love Chevron to have access to.” A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more.

In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries “to open up areas of their energy sectors to foreign investment.” One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq’s economy, democracy and sovereignty.

Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president’s benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency. The administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies.

The law would transform Iraq’s oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies. The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control. The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq’s current “instability” by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq’s oil would then be left underground for at least two years rather than being used for the country’s economic development.

The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil. Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced.

Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military. Iraq’s five trade union federations, representing hundreds of thousands of workers, released a statement opposing the law and rejecting “the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.” They ask for more time, less pressure and a chance at the democracy they have been promised.

Waist Deep in Big Oil

The Nation reports:
The mid-November revelation in the Washington Post that as early as February 2001 senior executives of at least four of the country's biggest oil companies met with aides to Vice President Cheney has reopened the debate over Big Oil's influence on the Bush Administration's energy policy. The immediate controversy concerns whether executives of ExxonMobil, Conoco, Shell and BP America misled the Senate Energy and Commerce committees when they denied knowledge of the meetings in testimony on November 9. The leaked documents confirm that these meetings in fact took place, but because Republican chair Ted Stevens declined to oblige the executives to testify under oath--which committee Democrats strongly protested at the time--they cannot be charged with perjury. (They could, however, be charged with making false or fraudulent statements to Congress.)

The executives' evasive answers have renewed questions about the functioning of the secretive White House Energy Task Force, especially its unwillingness to draft policies that transcend the interests of Big Oil. The focus on industry profits and prevarication, although it's important, misses a much more important reason for the Bush Administration's desperate attempts to keep documents related to the task force secret. In a word: Iraq.

American To Oversee Iraqi Oil Industry

The US is preparing to install an American chairman on a planned management team of the Iraqi oil industry, providing further ammunition to critics who have questioned the Bush administration's agenda in the Middle East.

The Guardian reports:
The administration is planning to structure the potentially vast Iraqi oil industry like a US corporation, with a chairman and chief executive and a 15-strong board of international advisers.

According to a report in the Wall Street Journal, it has lined up the former chief executive of the US division of Royal Dutch/Shell, Philip Carroll, to take the job of chairman.

Large scale decisions on investment, capital spending and production are likely to need the approval of the advisory board, which will act like a board of directors. The day-to-day management team will be vetted by US officials and is likely to be made up of existing and expatriate Iraqi oil officials.

The structure is likely to anger opponents of the administration who argue that the US is wielding too much power in Iraq.

By involving non-Iraqis, the US could also expose itself to the accusation that it is attempting to take control of the industry and open the door to foreign investment by major western oil companies - a perception the Bush administration is keen to avoid.

The Middle East has, since the early-to-mid-1970s, largely closed the door on foreign oil firms - but contracts have been awarded to engineering and construction firms such as Bechtel, which was recently handed a $600m (£380m) commission in Iraq by the US Agency for International Development.

US and Iraqi engineers have resumed modest oil production in the south of the country, in fields close to Basra.

The other major field in the north, near Kirkuk, has yet to be restarted, but is expected to begin pumping oil in the next few days. The Basra fields produced 60% of Iraq's pre-war production of around 2.5m barrels a day.

The US is pushing for an end to economic sanctions to allow the oil to be freely exported.

A handful of Iraqi oil officials have been attempting to restore some order to the country's energy infrastructure and have been meeting regularly with the US military in Baghdad. The US has been eager to get the cooperation of the skilled Iraqi oil administration, but an attempt to impose a structure on the industry with outside involvement could cause friction.

The oil minister in the ousted Saddam regime, Amer Mohammed Rasheed, is on the US's most-wanted list.

Iraq, with 112bn barrels of proven reserves, is second only to Saudi Arabia, and has the potential to become a superpower in the oil industry. Experts believe that with billions of dollars of investment in the nation's crippled infrastructure it could produce up to 6m barrels a day within five or six years. There are believed to be 200bn barrels of probable reserves.

The oil beginning to pump in Iraq is being used for domestic purposes. Once exports are up and running again, US and British officials have said the aim is to put the proceeds into a fund to pay for the reconstruction of Iraq. But details of the fund, including who would administer it, have been scant.

The new management team and part of the advisory board are expected to be named next week. The chief executive would play a similar role to the former oil minister and would represent Iraq at meetings of Opec, the organisation of oil exporting nations. The position of vice chairman is expected to be filled by Fadhil Othman, who led Iraq's oil marketing group before Saddam came to power 24 years ago.

Thamir Gadhban, a senior oil ministry official working to restore order to the industry in Baghdad, told the Journal that he expected the chief executive to come from the ranks of the existing hierarchy. "The Iraqi oil industry is not a new one, and there are experienced people in the ministry of oil and its organisations," he said.