Do environmentalists have an interest in who controls oil resources?

Do environmentalists have an interest in who controls oil resources?

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By Mark Weisbrot

Our adversaries have always had the goal of flooding the world with cheap oil, which, of course, would greatly accelerate global warming. A higher price of oil reduces consumption.

Environmentalists seem to realize they have an interest in a fight like the Ecuador-Chevron lawsuit. In that case, which Chevron has recently moved to an international arbitration panel (1) in an attempt to avoid a fine of billions (2) issued by the Ecuadorian courts, it is a question of whether a multinational oil corporation will have to pay damages. and damages for pollution, for which it is responsible. Most environmentalists think this would be a good thing.

But what about the fights between the multinational oil giants and the governments of the oil-producing states for control of resources? Do people who care about the environment and climate change have an interest in these battles? It seems so, but most haven't noticed it yet.

In December last year, Exxon Mobil won a lawsuit against the government of Venezuela for assets that the government had nationalized in 2007. The award was actually a victory for the government of Venezuela (3): Exxon had sued for $ 12 billion , but he only made $ 908 million. After subtracting the $ 160 million the court said was owed to Venezuela, Exxon ended up with a $ 748 million judgment. The decision was made by an arbitration panel of the International Chamber of Commerce (ICC). On February 15, Venezuela paid Exxon $ 250 million (4) and announced that the case was resolved.

The case has been considered important by analysts in the oil industry, although it did not receive much attention elsewhere. Some background information: the dispute arose from the decision of the Venezuelan government to take a majority stake in oil extraction, in accordance with its legislation. In 2005, it entered into negotiations with foreign oil companies to buy a sufficient amount of their assets to achieve a majority stake. Almost all of the negotiations with dozens of companies were successful, with only Exxon and ConocoPhillips going to arbitration (Conoco is still negotiating).

Exxon adopted a strategy of trying to make an example of Venezuela, so that no government would try to mess with them. They went to European courts to freeze $ 12 billion of Venezuelan assets, but this was reversed in a matter of weeks. They also went to arbitration at the International Criminal Court and before the World Bank (ICSID) arbitration panel (the latter case is still pending). However, the Court granted them much less than the Venezuelan government allegedly offered them in the negotiations. The decision was heavily heeded by specialists in the oil industry - and was seen by governments of developing countries as a major victory for the developing world - but did not receive much media attention.

This is an important precedent, and of course there are other countries that will continue to have conflicts with the oil companies for control of resources. Why should environmentalists care? Well, for those of us who would like to reduce the build-up of greenhouse gases in the atmosphere, we would like to leave more oil in the ground. That is one reason why most environmentalists support a carbon tax, which would raise the price of carbon emissions. The main reason Venezuela insists on a majority stake in these oil projects is that it wants to control production. Venezuela is a member of OPEC, and abides by the organization's quotas. If you want to reduce climate change, then you have a great interest in whether governments that want to reduce oil production are capable of doing so.

A higher price of oil due to reduced production by oil-producing countries reduces consumption in the same way that a carbon tax would. It also encourages the development of alternatives to fossil fuels, including solar and wind technologies, which become more economically viable when there are higher oil prices. (Of course, higher prices motivate non-OPEC countries to produce more oil and OPEC members to cheat on the cartel, and a carbon tax would not have the same effect; but this would be an argument in favor of stronger and more inclusive OPEC.)

On the other hand, our adversaries have always had the goal of flooding the world with cheap oil, which, of course, would greatly accelerate global warming. The United States Department of State, in a 2002 report (5) [PDF], admitted that the United States government "provided training, institutional strengthening, and other support to individuals and organizations understanding to be actively involved. "in the military coup that overthrew the elected government of Venezuela (6) briefly that year. That same report also established that one of the main reasons for Washington's "dislike" with Chávez was "his involvement in the affairs of the Venezuelan oil company and the potential impact on oil prices."

Of course it is not politically popular for anyone to appear to be on the side of OPEC in rich, oil-consuming countries. But most environmentalists are willing to support policies, like a carbon tax, that are not necessarily going to win this year's election. They must also recognize that they have an interest in the struggle of producer states against multinational companies, for control of fossil fuels and other natural resources.

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. He is also the president of Just Foreign Policy. This article was published by The Guardian Unlimited newspaper on March 2, 2012. To view the original version in English:








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