How Big Corporations are Unpatriotic

Welcome to Globalization
by RALPH NADER


Many giant profitable U.S. corporations are increasingly abandoning America while draining it at the same time.

General Electric, for example, has paid no federal income taxes for a decade while becoming a net job exporter and fighting its hard-pressed workers who want collective bargaining through unions like the United Electrical Workers Union (UE). GE’s boss, Jeffrey Immelt, makes about $12,400 an hour on an 8-hour day, plus benefits and perks, presiding over this global corporate empire.

Telling by their behavior, these big companies think patriotism toward the country where they were created and prospered is for chumps. Their antennae point to places where taxes are very low, labor is wage slavery, independent unions are non-existent, governments have their hands out, and equal justice under the rule of law does not exist. China, for example, has fit that description for over 25 years.

Other than profiteering from selling Washington very expensive weapons of mass destruction, many multinational firms have little sense of true national security.

Did you know that about 80 percent of the ingredients in medicines Americans take now come from China and India where visits by FDA inspectors are infrequent and inadequate?

The lucrative U.S. drug industry – coddled with tax credits, free transfer of almost-ready-to-market drugs developed with U.S. taxpayer dollars via the National Institutes of Health – charges Americans the highest prices for drugs in the world and still wants more profits. Drug companies no longer produce many necessary medicines like penicillin in the U.S., preferring to pay slave wages abroad to import drugs back into the U.S.

Absence of patriotism has exposed our country to dependency on foreign suppliers for crucial medicines, and these foreign suppliers may not be so friendly in the future.

Giant U.S. companies are strip-mining America in numerous ways, starting with the corporate tax base. By shifting more of their profits abroad to “tax-haven” countries (like the Cayman Islands) through transfer pricing and other gimmicks, and by lobbying many other tax escapes through Congress, they can report record profits in the U.S. with diminishing tax payments. Yet they are benefitting from the public services, special privileges, and protection by our armed forces because they are U.S. corporations.

On March 27, 2013, the Washington Post reported that compared to forty years ago, big companies that “routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits,” are now reporting less than half that share. For instance, Proctor and Gamble was paying 40 percent of its total profits in taxes in 1969; today it pays 15 percent in federal taxes. Other corporations pay less or no federal income taxes.
Welcome to globalization. It induces dependency on instabilities in tiny Greece and Cyprus that shock stock investments by large domestic pension and mutual funds here in the U.S. Plus huge annual U.S. trade deficits, which signals the exporting of millions of jobs.

The corporate law firms for these big corporations were the architects of global trade agreements that make it easy and profitable to ship jobs and industries to fascist and communist regimes abroad while hollowing out U.S. communities and throwing their loyal American workers overboard. It’s not enough that large corporations are paying millions of American workers less than workers were paid in 1968, adjusted for inflation.

Corporate bosses can’t say they’re just keeping up with the competition; they muscled through the trade system that pulls down on our country’s relatively higher labor, consumer and environmental standards.

Corporate executives, when confronted with charges that show little respect for the country, its workers and its taxpayers who made possible their profits and subsidized their mismanagement, claim they must maximize their profits for their shareholders and their worker pension obligations.

Their shareholders? Is that why they’re stashing $1.7 trillion overseas in tax havens instead of paying dividends to their rightful shareholder-owners, which would stimulate our economy? Shareholders? Are those the people who have been stripped of their rights as owners and prohibited from even keeping a lid on staggeringly sky-high executive salaries ranging from $5,000 to $20,000 an hour or more, plus perks?

Why these corporate bosses can’t even abide one democratically-run shareholders’ meeting a year without gaveling down their owners and cutting time short. To get away from as many of their shareholder-owners as possible, AT&T is holding its annual meeting on April 26 in remote Cheyenne, Wyoming!

Pension obligations for their workers? The award-winning reporter for the Wall Street Journal Ellen E. Shultz demonstrates otherwise. In her gripping book Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, she shows how by “exploiting loopholes, ambiguous regulations and new accounting rules,” companies deceptively tricked employees and turned their pension plans into piggy banks, tax shelters and profit centers.

Recently, I wrote to the CEOs of the 20 largest U.S. corporations, asking if they would stand up at their annual shareholders’ meetings and on behalf of their U.S. chartered corporation (not on behalf of their boards of directors), and pledge allegiance to the flag ending with those glorious words “with liberty and justice for all.” Nineteen of the CEOs have not yet replied. One, Chevron, declined the pledge request but said their patriotism was demonstrated creating jobs and sparking economic activity in the U.S.

But when corporate lobbyists try to destroy our right of trial by jury for wrongful injuries – misnamed tort reform – when they destroy our freedom of contract – through all that brazenly one-sided fine print – when they corrupt our constitutional elections with money and unaccountable power, when they commercialize our education and patent our genes, and outsource jobs to other countries, the question of arrogantly rejected patriotism better be front-and-center for discussion by the American people.

Big Oil’s Banner Year: Higher Prices, Record Profits, Less Oil

by Daniel J. Weiss, Jackie Weidman, Rebecca Leber
Think Progress on Feb 8, 2012

Top Five Oil Companies Made $1 Trillion in Profits from 2001 Through 2011

General economic theory holds that companies will produce more of a good if its price is higher, or if it receives subsidies. Funny that these rules didn’t seem to apply to Big Oil in 2011, when the highest oil price since 1864 and $2 billion in subsidies to the five largest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—yielded lower oil production than in 2010. But these five oil companies combined made a record-high $137 billion in profits in 2011—up 75 percent from 2010—and have made more than $1 trillion in profits from 2001 through 2011.[1] This exceeds the previous record of $136 billion in profits in 2008.

Here are some more highlights from the big five’s activities in 2011:

• They produced 4 percent less oil and “oil equivalent” in 2011 compared to 2010.

• They spent a total of $38 billion, or 28 percent, of their profits to repurchase their own stock.

• They are sitting on more than $58 billion in cash reserves as of the end of 2011.

• They spent $1.6 million on campaign contributions and $65.7 million on lobbying efforts.

• For every $1 spent on lobbying in Washington, the big five received $30 worth of tax breaks.

Let’s dig a little deeper into this mystery to see why these companies are making more money while Americans see less oil and pay more at the pump.

Where the money goes

In spite of these high profits and oil prices, oil-equivalent production fell from 2010 levels for four of the big five oil companies. Shell’s profit, for example, increased by 54 percent from 2010 to 2011 while its oil and natural gas production decreased by 3 percent during the same time period.

So if the big five companies are not using their additional earnings to increase production, what are they spending their money on?

The answer: They’re buying shares of their own stocks and investing in politicians to maintain the policies that led to their enormous profits over the past decade.

Instead of heavily investing in job creation or production, the big five used $38 billion, or 28 percent of annual net income, to repurchase their own stocks. This practice enriches shareholders but it doesn’t add to oil supplies or investments in alternative fuels or other new technologies.

These companies also cling to tax breaks while maintaining $58 billion in cash reserves. This is nearly 30 times more than the estimated $2 billion in annual special tax breaks that these companies receive.

Tax breaks, but not more jobs

ExxonMobil, the most profitable of the big five, paid an effective tax rate of 17.6 percent (from 2008–2010 data), which is 3 percent less than what the average American family paid. But Exxon and other oil companies that receive these tax breaks do not pass benefits on to consumers. Instead, their board members, executives, and shareholders are the ones that profit.

These companies, along with the American Petroleum Institute—their political arm—fight relentlessly to keep their tax breaks intact by threatening economic and energy damage. API claims that eliminating tax loopholes for the oil and gas industry would “lose jobs … and energy production.” Yet higher oil prices and profits, combined with huge reserves and tax breaks, yielded lower, not higher, employment and oil production.

Last year, the Democrats on the House Natural Resources Committee released Profits and Pink Slips: How Big Oil and Gas Companies are Not Creating U.S. Jobs or Paying Their Fair Share.

This report revealed:

Despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell, and BP combined to reduce their U.S. workforce by 11,200 employees over that time.

Nor are many of these net revenues used for oil production. The report found that “among the Big 5 oil companies, less than 10 percent of profits are reinvested into exploration of new oil deposits.”

The report also concluded that:

The oil and gas industry is a mature and highly profitable sector that is no longer in need of generous tax breaks or royalty free drilling. The $43.6 billion in tax subsidies that the industry is set to receive over the next decade will not help consumers with rising energy costs.

One place where oil companies have no trouble spending money, however, is in Congress. Last year the big five spent $65.7 million on lobbying efforts, successfully persuading their congressional friends to retain tax breaks. Both the House and Senate had votes to scale back these tax breaks, and both proposals were defeated.[2]

And Big Oil’s lobbying expenditures were quite a bargain. For every $1 the big five spent on lobbying in D.C. last year, they effectively received $30 in subsidies disguised as tax breaks. This is equivalent to a 3,000 percent return on every dollar they invested in strong-arming Congress.

More than $1.6 million was spent on campaign contributions in 2011 from just four of the top five oil companies. And more than 90 percent of these campaign contributions were made to Republican candidates or committees. But that doesn’t even include their undisclosed contributions to the U.S. Chamber of Commerce, the American Petroleum Institute, or other organizations that also support tax breaks for Big Oil.

In the spirit of giving, three of the five Big Oil CEOs—Rex Tillerson of ExxonMobil, John Watson of Chevron, and Jim Mulva of ConocoPhillips—contributed an additional $75,000 to GOP candidates and committees.

Enough is enough

Two days after his State of the Union address last month, President Obama spoke in Aurora, Colorado, about American-made energy. He reiterated his call to eliminate tax breaks for Big Oil:

We subsidized oil for a very long time, long enough. It’s time to stop giving taxpayer giveaways to an industry that’s never been more profitable.

Seventy-four percent of Americans agree with the president’s desire to eliminate tax breaks for the oil and gas industry.

Instead of benefiting oil companies that reward senior executives, board members, and stockholders, these taxpayer funds should be invested in projects that benefit all Americans. A University of Massachusetts study found that investment in clean energy creates anywhere from two to four times more direct and indirect jobs compared to the same investment in oil and gas production.

But let’s put these tax breaks in context. Ending the $2 billion in annual tax breaks for the big five oil companies could pay for:

• The salaries of 36,000 high school teachers earning an average of $55,000 per year

• Pell Grants for more than 500,000 aspiring college students

• Sixty-seven thousand home solar energy systems costing an average of $15,000, which would reduce carbon dioxide pollution by 175,000 metric tons annually

Last September while addressing economic growth and deficit reduction, President Obama noted that as we cut federal program funding to reduce the budget deficit, “Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both.”

After a year of near-record profits and a decade of more than $1 trillion in total profits, the least the five huge oil companies can do to help our nation is to relinquish their unnecessary and ineffective tax breaks.

Endnotes

[1] In 2010 BP suffered a net loss of $4 billion due to its huge expenditures related to the BP Deepwater Horizon oil disaster. If BP is excluded from profit calculations in 2010 and 2011, the four remaining companies had a 36 percent increase in profit.
[2] On March 1, 2011, the House voted 249-176 to defeat a “Motion to Recommit [that] would repeal oil and tax production tax breaks for major integrated oil companies.” On May 17 the Senate voted 52-48 on a motion to proceed to the Close Big Oil Tax Loopholes Act, S. 940. Sixty votes were required to end debate and proceed to the bill, so it failed.

How to Cut Corporate Power

Occupy Corporations
by BILL QUIGLEY

“Corporations are people, my friend.”

– Mitt Romney at Iowa State Fair

Corporations are obviously not people. But Romney is accurate in the sense that corporations have hijacked most of the rights of people while evading the responsibilities. An important part of the social justice agenda is democratizing corporations. This means we must radically change the laws so people can be in charge of corporations. We must strip them of corporate personhood and cut them down to size so democracy can work. People are taking action so democracy can regulate the size, scope and actions of corporations.

One of the most basic roles of society is to protect the people from harm. The massive size of many international corporations makes democratic control over them nearly impossible.

Corporate crime is widespread. The New York Times, ProPublica and others have revealed Wall Street giants like JPMorgan, Citigroup, Bank of America and Goldman Sachs have been charged with fraud many times only to get off by paying hundreds of millions in fines. Professors at University of Virginia have documented hundreds of corporations which have been found guilty or pled guilty in federal courts.

Corporate abuse is even more widespread. For example, Corporate Accountability International named six to its Corporate Hall of Shame, including: Koch Industries for spending over $50 million to fund climate change denial; Monsanto the devil for mass producing cancer causing chemicals; Chevron for dumping more than 18 billion gallons of toxic waste into the Ecuadorian Amazon; Exxon Mobil for being the worst polluter; Blackwater (now Xe) for killing unarmed Iraqi civilians and hiring paramilitaries; and Halliburton, the nation’s leading war profiteer.

Making corporations responsible to democracy of the people is challenging considering Wal-Mart, the world’s biggest corporation, does more business itself annually than all but two dozen of the two hundred plus countries in the world. Without dramatic changes, how can we expect people in small or even big countries to force corporations like Wal-Mart, Royal Dutch Shell, Exxon Mobil, BP, Toyota or Chevron to live by the same rules all the people have to?

Justice demands we make sure corporations do not harm people. Democracy must require that they operate for the common good.

In order to cut corporations down to size, the people must strip corporations of the special artificial legal protections they have created for themselves.

The story of how corporations took the full rights of legal persons in one of the great perverse tragedies in legal history. Corporations have worked the courts mercilessly since 1819 to take a wide variety of constitutional rights that were designed to cover only people. For example, the Fourteenth Amendment was passed in 1868 to make sure all citizens, particularly freed slaves and people of color, had full rights. There was no mention of protecting corporations. But corporations jumped on this opportunity resulting in a questionable Supreme Court decision that granted them legal personhood. At roughly the same time, the Supreme Court approved “separate but equal” racial segregation. Thus in thirty years, African Americans lost their legal personhood, while corporations acquired theirs.

Corporations now claim: 1st amendment free speech rights to advertise and influence elections: 4th amendment search and seizure rights to resist subpoenas and challenges to their criminal actions; 5th amendment rights to due process; 14th amendment rights to due process where corporations took the rights of former slaves and used them for corporate protection; plus rights under the Commerce and Contracts clauses of the constitution.

The most recent corporate judicial takeover of constitutional rights is the 2010 Supreme Court decision in Citizens United versus the Federal Election Commission. The court ruled that corporations are protected by the First Amendment so they can use their money to influence elections.

Because of the bad Supreme Court decisions, it takes a constitutional amendment by the people to change the laws back. An amendment requires two-thirds of both houses of Congress to agree then three-quarters of the states must vote to ratify. This will take real work. But despite the growing size and unrestricted power of corporations, people are fighting back.

Dozens of groups are working to reverse Citizens United and restore limits on corporate election advocacy. In January 2011, groups delivered petitions signed by over 750,000 people calling on Congress to amend the Constitution and reverse the decision. More than 350 local events were held in late January 2012 to challenge the Citizens United decision.

Groups challenging this injustice include Code Pink, Common Cause, Free Speech for People, Moveon.org, Move to Amend, National Lawyers Guild, POCLAD, Public Citizen, People for American Way, The Center for Media and Democracy, and Women’s League for Peace and Freedom.

Many groups are asking for a broad constitutional amendment that makes it clear that corporations are not people and should not be given any constitutional rights. Representatives Ted Deutsch of Florida, Jim McGovern of Massachusetts and Senator Bernie Sanders of Vermont have sponsored bills in Congress to start the process for a constitutional amendment to make it clear that corporations are not people, are not entitled to the rights of people, and cannot contribute to political campaigns.

There are also many energetic actions at the state level. People for the American Way list organizational efforts in nearly all 50 states to end corporate influence in elections or amend the constitution.

Massive corporations now rule the earth. But they are recent arrivals which can and should be dispatched. It is time for people to again take control. The legal fiction of corporate personhood and the constitutional rights taken by corporations must cease. Join the efforts to cut them down to size and restore the right of the people to govern.

Sen Bernie Sanders' Guide to Corporate Freeloaders

BP's Secret Deepwater Blowout, another one...

Tuesday 19 April 2011
by Greg Palast, Truthout and Buzzflash


Only 17 months before BP's Deepwater Horizon rig suffered a deadly blowout in the Gulf of Mexico, another BP deepwater oil platform also blew out.

You've heard and seen much about the Gulf disaster that killed 11 BP workers. If you have not heard about the earlier blowout, it's because BP has kept the full story under wraps. Nor did BP inform Congress or US safety regulators, and BP, along with its oil industry partners, have preferred to keep it that way.

The earlier blowout occurred in September 2008 on BP's Central Azeri platform in the Caspian Sea.

As one memo marked "secret" puts it, "Given the explosive potential, BP was quite fortunate to have been able to evacuate everyone safely and to prevent any gas ignition." The Caspian oil platform was a spark away from exploding, but luck was with the 211 rig workers.

It was eerily similar to the Gulf catastrophe as it involved BP's controversial "quick set" drilling cement.

The question we have to ask: If BP had laid out the true and full facts to Congress and regulators about the earlier blowout, would those 11 Gulf workers be alive today - and the Gulf Coast spared oil-spill poisons?

The bigger question is, why is there no clear law to require disclosure? If you bump into another car on the Los Angeles freeway, you have to report it. But there seems no clear requirement on corporations to report a disaster in which knowledge of it could save lives.

Five months prior to the Deepwater Horizon explosion, BP's Chief of Exploration in the Gulf, David Rainey, testified before Congress against increased safety regulation of its deepwater drilling operation. Despite the company's knowledge of the Caspian blowout a year earlier, the oil company's man told the Senate Energy Committee that BP's methods are, "both safe and protective of the environment."

Really? BP's quick-dry cement saves money, but other drillers find it too risky in deepwater. It was a key factor in the Caspian blowout. Would US regulators or Congress have permitted BP to continue to use this cement had they known? Would they have investigated before issuing permits to drill?

This is not about BP the industry Bad Boy. This is about a system that condones silence, the withholding of life-and-death information.

Even BP's oil company partners, including Chevron and Exxon, were kept in the dark. It is only through WikiLeaks that my own investigations team was able to confirm insider tips I had received about the Caspian blowout. In that same confidential memo mentioned earlier, the US Embassy in Azerbaijan complained, "At least some of BP's [Caspian] partners are similarly upset with BP's performance in this episode, as they claim BP has sought to limit information flow about this event even to its [Caspian] partners."

In defense of its behavior, BP told me it did in fact report the "gas release" to the regulators of Azerbaijan. That's small comfort. This former Soviet republic is a police state dictatorship propped up by the BP group's oil royalties. A public investigation was out of the question.

In December, I traveled to Baku, Azerbaijan's capital, to investigate BP and the blowout for British television. I was arrested, though, as a foreign reporter, quickly released. But my eye witnesses got the message and all were too afraid tell their stories on camera.

BP has, in fact, never admitted a blowout occurred, though when confronted by my network, did not deny it. At the time, BP told curious press that the workers had merely been evacuated as a "precaution" due to gas bubbles "in the area of" the drilling platform, implying a benign natural gas leak from a crack in the sea floor, not a life-threatening system failure.

In its 2009 report to the US Securities and Exchange Commission (SEC), BP inched closer to the full truth. Though not mentioning "blowout" or "cement," the company placed the leak "under" the platform.

This points to a cruel irony: the SEC requires full disclosure of events that might cause harm to the performance of BP's financial securities. But reporting on events that might harm humans? That's not so clear.

However, the solution is clear as could be. International corporations should be required to disclose events that threaten people and the environment, not just the price of their stock.

As radiation wafts across the Pacific from Japan, it is clear that threats to health and safety do not respect national borders. What happens in Fukushima or Baku affects lives and property in the USA.

"Regulation" has become a dirty word in US politics. Corporations have convinced the public to fear little bureaucrats with thick rulebooks. But let us remember why government began to regulate these creatures. As Andrew Jackson said, "Corporations have neither bodies to kick nor souls to damn."

Kicking and damning have no effect, but rules do. And after all, when international regulation protects profits, as in the case of patents and copyrights, corporate America is all for it.

Chevron ordered to pay $8.2 billion

Chevron sues Ecuadorians who stood up to toxic contamination
By David Edwards | Monday, February 14th, 2011

An Ecuadorean judge ruled Monday that Chevron must pay at least $8.2 billion for allegedly dumping oil-drilling waste. The company has pledged to appeal the ruling.

Chevron, accused of dumping oil-drilling waste in the Ecuadorean jungle, is facing a multibillion-dollar lawsuit. To fight it, they are counter-suing the alleged victims.

The company filed a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit in federal court in New York earlier this month, accusing the plaintiffs of fraud, interfering with contracts, trespass, unjust enrichment and conspiracy.

"Chevron is acting out of pure desperation because we are nearing judgment," Karen Hinton, a spokeswoman for the plaintiffs, told activist campaigners with the watchdog site ChevronToxico.

"The company's new legal actions are designed to intimidate lawyers and funders and to provide a fake cover story for shareholders when the company is hit with an adverse judgment," she added.

In fact, Chevron just ending a record-setting 13-day deposition of one of the lawyers for the plaintiffs.

"Irrefutable scientific truth will triumph over Chevron's intimidation tactics and desperation," Pablo Fajardo, the lead attorney in the case, said.

"We will not be frightened by corporate bullying," he insisted. "Chevron is trying to turn the victims of its own unlawful misconduct into criminals. We will not stand for it."

Chevron won a key decision last week when a federal judge ordered Ecuador to suspend enforcement of any judgment against the company.

For its part, Ecuador said it would comply with the ruling.

The case first began in 1993 when the Ecuadorian plaintiffs accused Texaco of using unlined pits to store oil-drilling waste. A decade later, the case moved to Ecuador after Texaco had been bought by Chevron.

The plaintiffs were asking for $113 billion in damages. Chevron expected to lose the case, which could be decided in a matter of weeks or months.

Court Sides With Big Oil

Chevron's Crude Attacks
By MICHAEL WINSHIP

Joe Berlinger's back is against the wall. Last week the independent filmmaker, already facing crushing debt from legal bills, was dealt a major blow in his continuing fight against the third largest company in America, Chevron.

It's a battle that epitomizes the hardship individuals face trying to challenge corporate giants that punch back with a knockout force of high-powered lawyers and unlimited cash.

What's more, Joe's struggle continues to raise serious First Amendment issues and -- as we approach the first anniversary of the Supreme Court's Citizens United decision -- throws yet another spotlight on the increasingly pro-business stance of the nation's legal system.

It was this past May when my friend and colleague Bill Moyers and I first wrote about Joe's documentary Crude and its legal troubles. The film tells the story of how Ecuadorians challenged the pollution of rivers and wells from Texaco's drilling in the Lago Agrio oil field, a rainforest disaster savagely damaging the environment and the local population's health that's been described as the Amazon's Chernobyl. When the petrochemical behemoth Chevron acquired Texaco in 2001 and attempted to dismiss claims that it was now responsible, the indigenous people and their lawyers fought back in court.

In May, Federal Judge Lewis A. Kaplan ordered Berlinger to turn over to Chevron more than 600 hours of raw footage used to create the film. On appeal, the United States Court of Appeals for the Second Circuit limited the amount of footage to be turned over (although it still amounts to more than 500 hours), but ordered Berlinger to submit to depositions.

Now, on January 13, that same court ruled, as reported in The New York Times, that Joe "could not invoke a journalist's privilege in refusing to turn over that footage because his work on the film did not constitute an act of independent reporting," and that the argument "that he was protected as a journalist from being compelled to share his reporting materials was not persuasive." As evidence, the court said that the film "was solicited by the plaintiffs in the Lago Agrio litigation for the purpose of telling their story, and changes to the film were made at their instance."

Berlinger responded, "While the idea for Crude was pitched to me by Steven Donziger, one of the Lago Agrio Plaintiffs' lawyers, this was not a commissioned film. I had complete editorial independence, as did 60 Minutes and Vanity Fair who also produced stories on this case that were solicited by Mr. Donziger. The decision to modify one scene in the film based on comments from the plaintiffs' lawyers after viewing the film at the Sundance Film Festival was exclusively my own and in no way diminishes the independence of this production from its subjects. I rejected many other suggested changes and my documentary Crude has been widely praised for its balance in the presentation of Chevron's point of view as well as the plaintiffs'."

Were mistakes made, errors in judgment? Perhaps. But the court's ruling fails to fully understand the nature of news and documentary reporting and will have a chilling effect on journalists who constantly receive information and suggestions from sources representing a variety of interests and points of view. It's the professional journalist's job to sort through them on the way to determining the truth. As Moyers and I wrote in May, "This is a serious matter for reporters, filmmakers and frankly, everyone else. Tough, investigative reporting without fear or favor -- already under siege by severe cutbacks and the shutdown of newspapers and other media outlets -- is vital to the public awareness and understanding essential to a democracy."

Just as dismaying about this latest ruling is the endless sinking feeling that the courts more than ever are stacked against the individual seeking redress against big business. In the 39 states where judges are elected, corporate cash has poured into judicial races -- contributions have more than doubled in recent years, prompting Sandra Day O'Connor to say, "No state can possibly benefit from having that much money injected into a political campaign." And in the federal courts, well, suppose Joe Berlinger's case were to make it all the way to the Supreme Court. A recent Fortune magazine cover proclaimed it "the most pro-business court we have ever seen," and as the Times more understatedly noted last month, "It is clear... that the Supreme Court these days is increasingly focused on business issues."

In case you missed the Times story over the holidays, it was headlined "Justices Offer Receptive Ear to Business Interests." Scholars at Northwestern University and the University of Chicago prepared a report analyzing nearly 1500 Supreme Court decisions across almost six decades. It found, "The Roberts court, which has completed five terms, ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief Justice William H. Rehnquist, who died in 2005, and 42 percent by all courts since 1953."

According to the Times' Adam Liptak, "The Roberts court's engagement with business issues has risen along with the emergence of a breed of lawyers specializing in Supreme Court advocacy, many of them veterans of the United States solicitor general's office, which represents the federal government in the court. These specialists have been extraordinarily successful, both in persuading the court to hear business cases and to rule in favor of their clients."

Many of these lawyers work for or with the US Chamber of Commerce and its National Chamber Litigation Center, which calls itself "the voice of business in the courts on issues of national concern to the business community."

The Times reported, "The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber's side. One of them was Citizens United, in which the chamber successfully urged the court to guarantee what it called 'free corporate speech' by lifting restrictions on campaign spending."

The court's independence -- and historic skepticism about the needs of corporate America -- are relics of the past. Here's what was in a 2007 edition of BusinessWeek magazine: "Robin S. Conrad, head of the Chamber of Commerce's litigation arm, notes that the judicial branch offers an alternative forum where business can seek changes it has failed to win from other branches of government. In the 1990s, the chamber and other business groups made this a vital part of their tort reform strategy on a state level, pouring money into local judicial campaigns to reshape state supreme courts and, ultimately, state laws. Now with a US Supreme Court that's not allergic to business cases, the approach is playing out on a national level..."

It was President Calvin Coolidge who in 1925 famously declared, "The chief business of the American people is business," a sentiment this Supreme Court and much of the American judicial system would stoutly embrace. But ironically -- especially for journalists and filmmakers like Joe Berlinger -- he made the remark in a speech to the American Society of Newspaper Editors. Its title: "The Press under a Free Government."

Truth and freedom, Coolidge said, "are inseparable." There is "no justification for interfering with the freedom of the press, because all freedom, though it may sometime tend toward excesses, bears within it those remedies which will finally effect a cure for its own disorders."

Invasion of the Democracy Crushers: Oil Industry Monsters Work to Destroy the Planet

Oil industry monsters from Texas are preying on California, pumping money into a campaign that would kill the Global Warming Solutions Act of 2006.
By Rebecca Solnit, Tomdispatch.com
Posted on October 25, 2010

This country is being run for the benefit of alien life forms. They’ve invaded; they’ve infiltrated; they’ve conquered; and a lot of the most powerful people on Earth do their bidding, including five out of our nine Supreme Court justices earlier this year and a whole lot of senators and other elected officials all the time. The monsters they serve demand that we ravage the planet and impoverish most human beings so that they might thrive. They’re like the dinosaurs of Jurassic Park, like the Terminators, like the pods in Invasion of the Body Snatchers, except that those were on the screen and these are in our actual world.

We call these monsters corporations, from the word corporate which means embodied. A corporation is a bunch of monetary interests bound together into a legal body that was once considered temporary and dependent on local licensing, but now may operate anywhere and everywhere on Earth, almost unchallenged, and live far longer than you.

The results are near-invincible bodies, the most gigantic of which are oil companies, larger than blue whales, larger than dinosaurs, larger than Godzilla. Last year, Shell, BP, and Exxon were three of the top four mega-corporations by sales on the Fortune Global 500 list (and Chevron came in eighth). Some of the oil companies are well over a century old, having morphed and split and merged while continuing to pump filth into the air, the water, and the bodies of the many -- and profits into the pockets of the few.

Thanks to a Supreme Court decision this January, they have the same rights as you when it comes to putting money into the political process, only they’re millions of times larger than you -- and they’re pumping millions of dollars into races nationwide. It’s like inviting a T. rex into your checkers championship -- and it doesn’t matter whether dinosaurs can play checkers, at least not once you’re being pulverized by their pointy teeth.

The amazing thing is that they don’t always win, that sometimes thousands of puny mammals -- that’s us -- do overwhelm one of them.

Gigantic, powerful, undead beings, corporations have been given ever more human rights over the past 125 years; they act on their own behalf, not mine or yours or humanity’s or, really, carbon-based life on Earth’s. We’re made out of carbon, of course, but we depend on a planet where much of the carbon is locked up in the earth. The profit margins of the oil corporations depend on putting as much as possible of that carbon into the atmosphere.

So in a lot of basic ways, we are at odds with these creations. The novelist John le Carré remarked earlier this month, “The things that are done in the name of the shareholder are, to me, as terrifying as the things that are done -- dare I say it -- in the name of God." Corporations have their jihads and crusades too, since they subscribe to a religion of maximum profit for themselves, and they’ll kill to achieve it. In an odd way, shareholders and god have merged in the weird new religion of unfettered capitalism, the one in which regulation is blasphemy and profit is sacred. Thus, the economic jihads of our age.

They Fund By Night!

In the jihad that concerns me right now, most of the monsters come from Texas; the prey is in California; and it’s called our economy and our environment. Four years ago, with state Assembly Bill 32, the Global Warming Solutions Act of 2006, we Californians decided we’d like to cultivate our environment for the benefit of all of us, human and biological, now and in the long future.

They’d like to pillage it to keep their profit margins in tip-top shape this year and next. The latest tool to do this is called Proposition 23, and it’s on our ballot on November 2nd. It is wholly destructive, cloaked in lies, and benefits no one -- no one human, that is, though it benefits the oil corporations a lot. (You could argue that it benefits their shareholders, but I’d suggest that their biological and moral nature matters more than their bank accounts do and that, as a consequence, they’re acting against their deepest interests and their humanity.)

When he signed AB 32 into law, Governor Arnold Schwartzenegger, who’s totally weird, termed out, but really good on climate stuff, said: “Some have challenged whether AB 32 is good for businesses. I say unquestionably it is good for businesses. Not only large, well-established businesses, but small businesses that will harness their entrepreneurial spirit to help us achieve our climate goals. Using market-based incentives, we will reduce carbon emissions to 1990 levels by the year 2020. That's a 25% reduction. And by 2050, we will reduce emissions to 80% below 1990 levels. We simply must do everything in our power to slow down global warming before it's too late."

With Proposition 23, two out-of-state oil corporations, Valero and Tesoro, and right-wing oil billionaires based in New York and Kansas are trying to use the California initiative process, originally intended to allow citizen intervention in the governance of this state, to countermand AB 32 and set policy for us. “According to data from the California Secretary of State's office,” Kate Sheppard recently reported in Mother Jones magazine, “more than 98% of contributions to the pro-Prop. 23 campaign are from oil companies. Eighty-nine percent of the contributions come from out of state… Valero contributed $4 million, Tesoro gave $1.5 million, and a refinery owned by the notorious Kansas-based billionaire brothers David and Charles Koch, of Koch Industries, kicked in another $1 million. Just last week, Houston-based Marathon oil contributed $500,000.”

Actually, Tesoro and Valero are headquartered out of state, but their refineries in California gave us 2.4 million pounds of toxic chemicals in our air and water last year, and they’d like to continue offering the citizens of my state these gifts that keep giving illness, death, and long-term environmental devastation without interference. The coming vote is not about protecting fancy places for upscale hikers -- the stereotype used to portray environmentalism as a white-person’s luxury movement -- it’s about air quality for inner-city people, especially those who live near refineries and harbors. This is the kind of environmental degradation that’s about childhood asthma and increased deaths from respiratory illness. In other words, Prop. 23 is part of a corporate war on the poor. A vote for Prop. 23 is a vote to turn the lungs of poor children into a snack for dinosaurs, to put it in bluntly Hollywood-ish terms.

Lies of the Living Dead

To sabotage AB 32, they’re spending lots and lots of money and telling lots and lots of lies. Start with the proposition’s name -- “The California Jobs Initiative” -- designed to make you think that this measure will create jobs. Actually, according to most reputable analyses, it will do the opposite. A green economy has made jobs, is making jobs, and will make more jobs. This stealth initiative would suspend AB 32 until unemployment in California drops below 5.5% for four consecutive quarters, which it won’t anytime soon, if ever.

The implication is that doing something about climate change is a luxury we cannot afford in this bleak economy. That’s a lie. Down the road, if we don’t retool to address a future in which there’s less petroleum (at far higher prices), we’ll truly crash and the suffering will be intense. AB 32 would prevent that crash; Prop. 23 steers us directly into it.

The more we heat up the planet, the more it costs all of us, not just in money, but in colossal famines, displacements, deaths, and species extinctions, as well as in the loss of some of the things that make this planet a blue-green jewel, including its specialized habitats from the melting Arctic to bleaching coral reefs.

Doing something about climate change makes economic sense right now. It’s good business.

It’s hardly surprising that the corporate aliens lie when it comes to the relationship between doing something about climate change and the economy. After all, oil corporations funded a lot of the disinformation campaigns which, for years, promoted the idea that human-caused climate change was a figment of the overheated imaginations of mad environmentalists, and later that there was controversy (as well as corruption) among scientists when it came to global warming. The only honest information would have been that about 97% of the world’s relevant scientists overwhelming agree that climate change couldn’t be more real and is a genuine danger to humanity and the planet -- and that the evidence is all around us in freakish weather, rising oceans, melting arctic ice and glaciers, shifting habitats, and more.

The Phantom of Democracy

The oil dinosaurs want to win so badly in my home state because what happens here matters everywhere. The nation often follows where California goes. In the 1970s, we started setting energy efficiency standards that mean we Californians now use about half the energy of the average American (with no diminishment of quality of life or pocketbook pain). In the last decade, we created cutting edge measures to curb carbon emissions.

In 2002, Los Angeles state assemblywoman Fran Pavley (now a state senator) put out AB 1493, which was to -- and will -- reduce vehicle greenhouse gas emissions. It was, unfortunately, held up for six years by the Bush administration and then transformed into a national standard by Barack Obama as one of his first acts in office. Pavley also authored the now embattled “Global Warming Solutions Act of 2006,” AB 32.

If you think oil corporations and life share an interest, you should’ve been in the Gulf of Mexico a few months ago. I was. I saw their oiled pelicans, their unemployed fishermen, and their oil-smeared marshes. I tasted and smelled the poisons I could not see, and I read their lies.

The people of the Gulf will struggle to survive the recklessness of BP for decades to come, but the petrobeasts aren’t just destructive when things go wrong; they’re that way when things go according to plan as well. If the 5.5 million barrels of oil that spilled into the Gulf, thanks to BP, had instead made it to our gas tanks, the consequences would still have been dire. They are dire. The companies funding Prop. 23 are themselves a major source of climate change and, of course, a major obstacle to coming up with solutions to it.

Like the people of the Gulf during the spill, the people of Richmond, California, in the San Francisco Bay area, live with those tastes, smells, and consequences all the time, because they’re in the shadow of Chevron’s biggest west coast refinery. (Corporate headquarters are only 25 miles away.) Sirens go off during excessive leaks of toxins like ammonia, and as if out of a horror movie, an explosion at the plant in 1999 that sent an 18,000-pound plume of sulfur dioxide fumes into the air was said to be so nasty it took the fur off squirrels.

Chevron is one of the biggest corporations on the planet. While the average income for a human being in Richmond is a little over $19,000, Chevron’s profits last year were $24 billion, meaning the corporation is more than one million times as rich as the average citizen there. Nonetheless, the humans there won a huge victory recently, preventing the corporation from expanding and retooling its refinery so that it could process even dirtier crude oil (with dirtier local emissions, in a place that already suffers huge health consequences from the monster in its backyard). It may be the world’s first victory against refinery expansion.

Chevron is both the state’s biggest single greenhouse-gas emitter and a huge financial force in Richmond elections, invariably funding campaigns against green candidates. The mostly poor, mostly nonwhite citizens of Richmond are, however, organized and motivated, so if you want to watch a monster movie in which the little guys have been winning lately, follow city politics there.

One of the cool things about the West County Toxics Coalition, the Asian Pacific Environmental Network, the Green Party mayor, and the activists working with them is that they know better than anyone how to act locally and think globally, and even sometimes how to act globally and think locally. Maybe collectively they’re not so little. They’re allied with antiwar groups, with Burmese human rights groups, with the people of Ecuador and Nigeria who have suffered petro-contamination at least as bad, if not worse than BP’s Gulf spill this spring, with groups around the world fighting the petrobeast. There’s a movement out there, and sometimes it even wins amazing victories.

Around the world this month, 350.org coordinated more than 7,000 demonstrations in favor of lowering atmospheric carbon to a sane 350 parts per million, while the climate justice movement had a global day of action on Columbus Day. Among the month's heroic efforts were direct action against mountaintop-removal coal mining in West Virginia, blockades of refineries in France and Britain and of a coal-fired power plant in Germany, protests and gas-station blockades in Canada, and a rally in the Philippines, a demonstration in Finland, a march in Ecuador, a protest in South Africa, among others. In California, activists worked steadily against Prop. 23.

Think for a minute about horror movies: in some of them, the little people rally and do heroic things and the monsters or aliens are vanquished. The forces that have come together against Prop. 23 are impressive, ranging from inner-city job coalitions and traditional environmental groups to university think tanks and business interests. Winning or losing, however, depends on what happens when California voters look at that deceptive label “California Jobs Initiative” on their ballots on November 2nd.

If your heart isn’t pounding, and you aren’t biting your fingernails and teetering at the edge of your seat, then you haven’t noticed the monsters yet. Look carefully. They’re all around us -- and they’re coming for you.

Disney, Monsanto (the devil) among Blackwater’s hidden clients

By John Byrne - Thursday, September 16th, 2010

Also on list: Royal Caribbean, Deutsche Bank, Chevron

Almost three years ago exactly -- Sept. 17, 2007 -- a cadre of guards from the security firm then known as Blackwater shot and killed 17 Iraqis at a public plaza in Baghdad.

The company, long in the public eye, has been known for brutal tactics and as a mercenary for the US State Department in countries where the US has boots on the ground. What hasn't been known, however, is that the same company was handling intelligence ops for publicly-traded US companies.

Atop the list is Monsanto (thew devil), the biotech giant, who The Nation's Jeremy Scahill revealed Wednesday accepted a proposal through a Blackwater subsidiary which "offer[ed] to provide operatives to infiltrate activist groups organizing against the multinational biotech firm."

Monsanto (the devil) doesn't stand alone. Through a network of 30 subsidiaries and shell corporations, Blackwater-linked entities provided "intelligence, training and security services" to a cache of major multinational firms, including: Monsanto (the devil), Chevron, the Walt Disney Company, Royal Caribbean Cruise Lines, Deutsche Bank and Barclays, according to documents Scahill obtained.

Blackwater's owner and founder, Erik Prince -- who has himself been linked to the CIA -- helped train companies through two other firms he controlled: Total Intelligence Solutions and the Terrorism Research Center.

Not surprisingly, no one responded to requests for comment.

Monsanto (the devil) topped the list of firms using Prince's services, Scahill writes.

"According to internal Total Intelligence communications, biotech giant Monsanto (the devil) —the world's largest supplier of genetically modified seeds—hired the firm in 2008–09," the reporter writes. "The relationship between the two companies appears to have been solidified in January 2008 when Total Intelligence chair Cofer Black traveled to Zurich to meet with... Monsanto (the devil) security manager for global issues."

"After the meeting in Zurich, Black sent an e-mail to other Blackwater executives.... saying that Wilson "understands that we can span collection from internet, to reach out, to boots on the ground on legit basis protecting the Monsanto (the devil) [brand] name.... Ahead of the curve info and insight/heads up is what he is looking for." Black added that Total Intelligence "would develop into acting as intel arm of Monsanto (the devil) ." Black also noted that Monsanto (the devil) was concerned about animal rights activists and that they discussed how Blackwater "could have our person(s) actually join [activist] group(s) legally." Black wrote that initial payments to Total Intelligence would be paid out of Monsanto's (the devil) "generous protection budget" but would eventually become a line item in the company's annual budget. He estimated the potential payments to Total Intelligence at between $100,000 and $500,000. According to documents, Monsanto (the devil) paid Total Intelligence $127,000 in 2008 and $105,000 in 2009.

....In an... e-mail to The Nation, Wilson confirmed he met Black in Zurich and that Monsanto (the devil) hired Total Intelligence in 2008 and worked with the company until early 2010. He denied that he and Black discussed infiltrating animal rights groups, stating "there was no such discussion." He claimed that Total Intelligence only provided Monsanto (the devil) "with reports about the activities of groups or individuals that could pose a risk to company personnel or operations around the world which were developed by monitoring local media reports and other publicly available information. The subject matter ranged from information regarding terrorist incidents in Asia or kidnappings in Central America to scanning the content of activist blogs and websites." Wilson asserted that Black told him Total Intelligence was "a completely separate entity from Blackwater."

Walt Disney?

The Walt Disney Company hired Total Intelligence and TRC to do a "threat assessment" for potential film shoot locations in Morocco, with former CIA officials Black and Richer reaching out to their former Moroccan intel counterparts for information. The job provided a "good chance to impress Disney," one company executive wrote. How impressed Disney was is not clear; in 2009 the company paid Total Intelligence just $24,000.

How about Deutsche Bank?

Total Intelligence and TRC also provided intelligence assessments on China to Deutsche Bank. "The Chinese technical counterintelligence threat is one of the highest in the world," a TRC analyst wrote, adding, "Many four and five star hotel rooms and restaurants are live-monitored with both audio and video" by Chinese intelligence. He also said that computers, PDAs and other electronic devices left unattended in hotel rooms could be cloned. Cellphones using the Chinese networks, the analyst wrote, could have their microphones remotely activated, meaning they could operate as permanent listening devices. He concluded that Deutsche Bank reps should "bring no electronic equipment into China." Warning of the use of female Chinese agents, the analyst wrote, "If you don't have women coming onto you all the time at home, then you should be suspicious if they start coming onto you when you arrive in China." For these and other services, the bank paid Total Intelligence $70,000 in 2009.

Prince, now the owner of Blackwater successor Xe Services, now has his eyes on another target: the Democrats.

He's now writing a book alleging that officials in the Clinton and Obama administrations "approved of his most sensitive and controversial operations," according to a report by veteran intel reporter Jeff Stein published in The Washington Post earlier this month.

The Post's Jeff Stein cited two unnamed sources who say Erik Prince, the founder of Blackwater, is hurrying to sell his company before he can go public with a book that takes aim at the Democratic Party. One of the sources told Stein that Prince and his friends "think this will destroy the Democratic Party in the elections."

The source, who is described as having a "business relationship with Xe," said Prince had "given his people three weeks to complete the sale of the company and the book will be released then," in time for the November elections.

To read about the firm's work for Barclay's, and the companies network of "black op" subsidiaries, click here to read Scahill's full report.

Chevron Drills Down 30,000 Feet to Tap Oil-Rich Gulf of Mexico (ca. 2007)

(Look at this 3 year old article I found in a WIRED magazine in a box in my closet. Tell me if it sounds familiar, but in another reality. Chevron is no different from BP in their corporate stomp on everything attitude, but it seems like their deep water well was quite a bit more successful and less damaging than BP's efforts.--jef)

***

Pumped Up
The Cajun Express has bored the deepest offshore well in Gulf history.
By Amanda Griscom Little | 08.21.07

Photo: Michael Sugrue

"Isn't this transcendent?" Paul Siegele shouts as he presses his nose to the window of a Bell 430 chopper hurtling through a sky thick with rain and pitchfork lightning. We're flying over the Gulf of Mexico, above some 3,500 oil production platforms, and Siegele is pointing them out with the verve of a birder — here a miniature oil rig known as a monopod; over there a drill ship almost as big as the Titanic; still farther out, platforms looking like huge steel chandeliers that dropped out of the storm-shaken clouds.

Siegele has reason to be giddy. He works for Chevron, and his team is sitting on several new record-breaking discoveries in the Gulf, a region that many geologists believe may have more untapped oil reserves than any other part of the world. On this trip, the 48-year-old vice president for deepwater exploration has come to a rig called the Cajun Express to oversee final preparations before drilling begins on the company's 30-square-mile Tahiti field.

Looming like an Erector set version of Hellboy — with cranes for arms, a hydraulic drill for its head, and a 200-foot derrick for a body — the rig appears at once menacing and toylike. But the real spectacle is below the surface: A drill is plunging down through 4,000 feet of ocean and more than 22,000 feet of shale and sediment — a syringe prodding Earth's innermost veins. That 5-mile shaft will soon give Chevron the deepest active offshore well in the Gulf. Some land drills have gone deeper, but extracting oil from below miles of freezing salt water and unyielding sediment creates a set of technical problems that far exceed those faced on terra firma.

Minutes after we land on the Cajun Express, Siegele gets some bad news from Ron Byrd, his weather-beaten site manager. "The junk basket is stuck way down there on some debris," says Byrd, who has captained offshore rigs for more than 30 years. The junk basket is an 8-inch hunk of iron that runs up and down the entire length of the drill hole on a piece of wire, scraping the well clean before sensitive production instruments are dropped in. It's a particularly important device when drilling offshore, because the presence of the ocean pushes debris, mud, fossils, and other muck into the hole.

Siegele, who is a lanky 6' 3" with a mild, professorial manner and a boyish mop of brown hair, winces almost imperceptibly. "Just a little bump in the road," he mutters. Technically, it's a million-dollar bump. The crew will spend 48 hours fishing the jammed tool out of the hole, halting all other activity on a rig that costs over $500,000 a day to run. But this is chump change to Siegele, who has an annual budget of more than $1 billion. "If snags like this didn't happen so frequently," Siegele says, "you'd probably let them get to you."

It's just another high-priced mishap in the world of ultradeep-sea drilling — the newest, riskiest, and most technologically extreme drilling frontier. Today, deep-sea rigs are capable of reaching down 40,000 feet, twice as deep as a decade ago: plunging their drills through 10,000 feet of water and then 30,000 more feet of seabed. One platform sits atop each so-called field, thrusting its tentacles into multiple wells dug into ancient sediment, slurping out oil, and then pumping it back to onshore refineries through underwater pipelines.

It's a business where huge sums are lost (two years ago, BP suffered a $250 million blow when a hurricane took out one of its platforms) but even more can be made. The mother lode of oil in the deepwater Gulf is so significant that Tahiti and other successful fields in this region are expected to soon produce enough crude to reverse the long-standing decline in US oil production of about 10 percent per year.

Even better, a recent discovery by Chevron has signaled that soon there may be vastly more oil gushing out of the ultradeep seabeds — more than even the optimists were predicting four years ago. In 2004, the company penetrated a 60 million-year-old geological stratum known as the "lower tertiary trend" containing a monster oil patch that holds between 3 billion and 15 billion barrels of crude. Dubbed Jack, the field lies beneath waters nearly twice as deep as those covering Tahiti, and many in the industry dismissed the discovery as too remote to exploit. But last September, Chevron used the Cajun Express to probe the Jack field, proving that petroleum could flow from the lower tertiary at hearty commercial rates — fast enough to bring billions of dollars of crude to market. It was hailed as the largest publicly reported discovery in the past decade, opening up a region that is perhaps big enough to boost national oil reserves by 50 percent. A mad rush followed, and oil companies plowed more than $5 billion into this part of the Gulf.

It was a burst of good news for the oil industry. Today, many of the world's largest fields — from Ghawar in Saudi Arabia to Prudhoe Bay in Alaska — are facing retirement, and the ultradeep frontier holds the industry's best hope for big new discoveries. But there are still big questions to be answered before Jack starts filling gas tanks: How well will oil flow from these prehistoric rocks? Can Chevron's equipment handle the increased temperatures and pressures at these depths? Can engineers successfully pump the oil back to shore?

In November, a sister rig to the Cajun Express will putter over to the Jack field, and Chevron will "spud" a preproduction well in search of answers to these questions. "There's no guarantee that the rewards in this field will outweigh the risks," says Siegele, slumping. But then he sucks in a breath of salt air and straightens up. He's got to brief a group of drilling engineers on the plans for Chevron's grand venture into Jack.

Chevron runs its offshore drilling operations out of a gleaming Houston skyscraper that recalls the nose of a double-barreled shotgun aimed skyward. Geologists work in cavernous visualization rooms with floor-to-ceiling monitors depicting digital renderings of the Gulf waters and seabed. Chevron has long bet that there's oil in these regions and has bought from the Department of the Interior almost twice as many federal leases to drill in the ultradeep waters of the Gulf as any other company.

One of Chevron's top geologists, a Jerry Garcia look-alike named Barney Issen, pulls an image of the Jack field up onto the monitors. "To you, this may looks like a dog's breakfast," he says, pointing to a multi colored morass. But the data is actually a finely detailed 3-D map of the ocean, seafloor, and sediment below. It will allow Chevron to locate promising spots to drill and then provide a guide for the engineers who operate the production process remotely.

To make this map, Issen and his team deployed ships that cruised through the Gulf, popping off air guns — underwater cannons that emit a gigantic burp into the ocean, bouncing sound waves off under water rock formations. Hydrophones (aquatic microphones) tethered to the vessels recorded the response, taking in hundreds of thousands of recordings simultaneously. These allowed the company to determine the composition and shape of the rocks below. Chevron needed to use masses of microphones to compensate for the distortions caused by a layer of salt as jagged as the Swiss Alps beneath the seafloor in the ultradeep regions of the Gulf. That mineral, unfortunately for the geologists in Houston, acts like a fun-house mirror for seismic sound waves. Issen compares sorting through the data to "peering through a thick wall of mottled glass and trying to count the freckles of someone on the other side."

Once the map was assembled, the Chevron team at the Houston office pored over the data and searched for sandy layers of sediment under domelike caps of shale. These signify the location of a potential reservoir because oil consistently rises through permeable sediment to the highest point it can go, collecting under unyielding shale mounds. Once these promising spots are found, the maps are used to chart the drill's optimal point of entry: the place where it's least likely to hit a nasty fault line or air pocket that would throw the whole well off. Finding the sweet spot is like dropping a baseball from 5 miles in the sky and hitting home plate — at night.

Then you have to hope you've found a highly porous and permeable oil bed. Most people think of oil as floating in big pools under layers of rock. But it's actually embedded in the rock, sort of like water in a sponge. "When you drive the drill down, you're going into porous rock that can be either kinda squishy or kinda rigid," Siegele says. Squishy is better, but as rock ages, it typically become tighter. That's why industry members were flabbergasted by the Jack well test that revealed high porosity. It's also what gives the Jack field, and the lower tertiary in general, the potential to reduce America's dependence on foreign oil — while earning Chevron a ton of money .

The galley of the Cajun Express is a prisonlike cafeteria of stainless steel and gray linoleum crammed with engineers in blue coveralls devouring their meals. Today the menu is bratwurst, cheese fries, and twice-baked potatoes. At first glance, it's hard to believe this is the setting for a proposed Food Network special on the high-caliber cuisine 140 miles offshore. But the grub is lip-smackingly good.
The Cajun is equipped with other perks: an Internet café, a gym, and a movie theater — but these luxuries are hardly used. Few of the men have the energy for entertainment or exercise after working a 12-hour shift on the drilling floor — hauling great vats of mud used for drill lubricant, welding broken iron casings, or repairing robotic submarines that fix problems with seafloor equipment. The living quarters, which house up to 150 workers, are the size of walk-in closets, filled with cot-sized bunk beds that fold out of the walls.

"When you're here, you're pretty much working or sleeping," says Siegele. Stout salaries make up for the extreme conditions: Entry-level tool pushers make about $60,000, and high-level geologists and engineers can earn in the mid six figures. Added bonus: a massive testosterone rush. "This is the best big-boy toy you'll ever find," says Chevron spokesperson Mickey Driver.

The first task for the men on the boat is to make sure that the rig stays in one place. In shallower areas, rigs can be anchored to the sea bottom — but it's dangerous to moor a drilling vessel in ultradeep water. The motion of the ocean and the fierceness of the currents at those depths make it too cumbersome. Plus, vessels need to be able to move to safety in the event of a hurricane. Ultradeep drilling rigs are kept "on station" by so-called thrusters — engines on each corner of the rig that are programmed to respond to a GPS system tracking both the drill's target on the seafloor and the ocean currents. The thrusters constantly push and pull, doing an extreme version of what you do if you're standing in shallow ocean water: constantly shifting your weight to stay balanced as the waves ebb and flow.

Dropping a drill down through more than 1 mile of water and 4 miles of earth isn't easy either. The drill string is composed of hundreds of 90-foot sections known as joints that are dropped into the water by an automated mechanical arm and successively screwed into each other. It took more than three days to assemble all the joints in the drill string that pierced the Jack field.

Once the rotating drill bit begins its journey down through miles of sediment and pierces the seafloor, it encounters another set of problems caused by the changing terrain. The test well for the Jack field drilled through nearly a dozen geological layers — ranging from hard bedrock to sandy sediment to empty voids. These rapid shifts from one level of pressure to another can disturb the rotations of the drill, causing it to get stuck or veer off course. Pressure is good — it's what naturally forces the liquid crude up the length of the well and into the barges and pipelines that send it back to shore. (The layer of shale over the oil-bearing sands acts like a brick on top of a water balloon — the fluid wants to surge upward.) But, at the very bottom, farther below sea level than Mount Everest is above it, there's enough pressure to implode a human head — or, more pertinently, to crack iron casings.

Moreover, the closer you get to Earth's core, the higher the temperature of the rocks. At 20,000 feet below seabed, the oil is hot enough to boil an egg. At 30,000 feet, it can reach more than 400 degrees Fahrenheit, hot enough to cook off into natural gas and carbon dioxide. Meanwhile, the water at the bottom of the deep sea is at near-freezing temperatures — between 32 and 34 degrees — creating a dangerous interaction: When the boiling-hot oil hits the freezing-cold water, it could solidify and block the flow, rupturing the pipes. The machinery on the seafloor, therefore, has to be well insulated. Engineers on the Cajun Express have been relying on a fairly primitive method — pumping the casing and substations with antifreeze — but much more sophisticated systems are in the works.

Because so many of the challenges that engineers encounter in the ultradeep can't be anticipated — or found anywhere else — the Jack test rig was populated with so-called Serial Number 001 technologies: one-of-a-kind innovations ranging from perforation guns that are triggered at well bottom inside the casing, creating holes that let the oil gush in and flow upward, to electrohydraulic systems that seal the wells in emergencies. And yet sometimes the solution is plain old creative thinking and duct tape. For example, when a tool got stuck down the hole during one well test, someone suggested just banging a giant hammer against the casing, sending vibrations down that jarred the tool loose.

As consensus grows that the world needs to shift away from fossil fuels, extracting oil from the most extreme and costly locations can seem foolishly myopic. If Chevron is going to throw billions of dollars into something untested and possibly doomed to failure, wouldn't it make more sense to invest in an inexhaustible, greener technology that's going to have political support a decade from now?
Siegele doesn't think so. He does know that geological limitations will prevent him from drilling much deeper: It's a pretty safe bet that below 40,000 feet, the extreme heat has baked off much of the deep-sea troves of crude. And there are financial limits to this frontier, too. Even as Chevron and other oil giants earn record profits, they also face record expenses. For example, the company has commissioned two new deep water rigs that will be able to drill 40,000-foot wells. But at more than $600 million each, they can't exactly be snapped up on boats.com. "The costs of developing a new oil or gas project are about 65 percent higher today than 30 months ago, and the greatest escalation of costs has been offshore," says Daniel Yergin, chair of the consulting firm Cambridge Energy Research Associates. At today's oil prices of $70 a barrel, the current exploration makes sense. But if oil drops below $40 a barrel, Yergin says, the cost of exploring this high-risk frontier will become prohibitive.

But Siegele is hardly worried. Technological breakthroughs have, decade after decade, revived the perpetually doomed oil industry. "Predicting peak oil," Siegele tells me as we tour the drilling floor of the Cajun Express, "is almost like predicting peak technology" — an exercise, in other words, that to him seems inherently small-minded. Even absurd.

Siegele takes me to the "crown" of the Cajun Express, a harrowing widow's walk suspended at the top of the drill's 200-foot derrick. The rig below looks like the loneliest place on Earth — a tiny, solitary board floating in a boundless blue sea. Then, out in the distance, I spot fleets of trawlers the size of thumbnails setting off seismic guns in search of the next big deep-sea prospect. "A decade ago, I never even dreamed we'd get here," Siegele marvels. "And a decade from now, this moonscape could be populated with rigs as far as the eye can see."

To extract oil from the Jack field, a rig will have to negotiate freezing waters, boiling oil, and seismic uncertainty. Here’s how.

1) Stable platform
Giant engines at each corner of the drilling rig keep everything stable. When the ocean pulls one way, the thrusters push the other.

2) The 6-mile Drill
The drill is made up of hundreds of interlocking 90-foot sections of iron. Buoyant sidings reduce the weight burden on the rig.

3) Point of entry
The drill needs to enter the seafloor at exactly the right point, minimizing the risk of hitting an air pocket or a fault as it goes whirring down. Boiling-hot oil emerges here and collides with freezing water, which means that the underwater pipes pumping the oil back to shore must be heavily insulated.

4) Dangerous journey
The drill must traverse numerous pressure zones, any one of which could knock it off course.

5) X marks the spot
Bedrock mounds, formed by oil pushing upward, signal promising hot spots.

6) Jackpot
The oil is trapped in squishy, porous rock.

Read More http://www.wired.com/cars/energy/magazine/15-09/mf_jackrig_drill#ixzz0uYh8tLy6

BP Takeover by Exxon And Chevron Gets Green Light From Obama Admin.

Published 07-11-2010 by Zerohedge

According to the Sunday Times, the Obama administration has given its blessing to Exxon and Chevron to consider takeover bids of the troubled BP, unimpeded. Because any deal in the current environment must first and foremost get the Obama stamp of approval, and soon equity will be trading above vendor payables in right of guarantee. The other majors can somehow handicap the outcome of the tens if not hundreds of billions in liabilities that will tie down BP in lawsuits for decades.

More from Dow Jones/WSJ, this time presumably without the Fed's preclearance:

U.S. oil major Exxon has sought clearance from Washington DC to examine a takeover bid for BP PLC (BP.LN), according to the Sunday Times.

According to oil industry sources, the Obama administration had told Exxon and one other U.S. oil company, thought to be Chevron, that it would not stand in the way of a deal that could value BP at up to GBP100 billion, the newspaper said.

The sources said there was no certainty that Exxon would make a move, but said talks with Washington indicated a renewed interest as BP came closer to plugging their oil well in the Gulf of Mexico.

"There have been talks at a high level, and Exxon has expressed a serious interest. It is too early to talk about a bid yet, but they are clearing the way," a senior oil industry source told the newspaper.

A spokesman for Exxon declined to comment, the paper said.