Full Length Response to Washington Post Review
Juhasz corrects the many factual errors in journalist Steve LeVine’s November 11 review of The Tyranny of Oil published in the Washington Post.
In his November 11, 2008 Washington Post review of The Tyranny of Oil, journalist Steve LeVine juxtaposes his deep admiration (which I share) for Ida Tarbell’s classic 1904 book, The History of Standard Oil, with his equally deep contempt for my book. Ironically, it is as if LeVine has channeled the following century-old review released upon the publication of The History of Standard Oil with his review of my work:
“[Tarbell’s] book seems to have been written for the purpose of intensifying the popular hatred. The writer had either a vague conception of the nature of proof, or she is willing to black the character of Mr. John D. Rockefeller by insinuation and detraction… We need reforms badly enough, but we shall not get them until we have an electorate able to control its passions, to reserve its condemnation, to deliberate before it acts. When that time comes, a railing accusation will not be accepted as history.”
Below, I correct only the many factual errors in LeVine’s Tyranny of Oil review. The Washington Post book editor is currently considering a shorter version of this letter for publication in the November 30 issue the Washington Post Book World.
“Unfair” to the Oil Industry
LeVine’s first lament is that I am “unfair” for quoting “no one from the industry in its defense.” Although rebuffed in my efforts to interview oil company executives directly, I did interview and then quote at length John Felmy, senior economist for the American Petroleum Institute—the oil industry’s leading lobbying organization, with a board composed of the CEOs of every major oil company. I also quote at length from oil executives’ and representatives’ written speeches, congressional testimony, and statements to the press; corporate shareholder reports, tax filings with the U.S. Securities and Exchange Commission (SEC), and other financial reporting; company press releases and press conferences, advertisements, and websites; and similar reports and reporting by the American Petroleum Institute and the U.S. Chamber of Commerce.
I conducted a series of extremely unique interviews of four recent chairmen of the Federal Trade Commission (FTC), who served under Presidents Carter, Reagan, Clinton, and George W. Bush, three of whom oversaw and ultimately approved the largest mergers in U.S. oil industry history, and one of whom, Timothy Muris, is now co-chair of the antitrust practice division at O’Melveny & Myers, where his clients have included ExxonMobil (which the law firm represented in, among numerous other cases, its U.S. Supreme Court Exxon Valdez victory).
My primary industry data sources come from the companies themselves or from research arms of the U.S. government under the Bush administration—arguably, the most pro-oil-industry administration in U.S. history—including the Department of Energy’s Energy Information Administration and the FTC.
Then there are the interviews I conducted that LeVine dismisses because the subjects are “harboring grievances” and whom, he protests, are “provided a hearing throughout the book.” I can not know for sure, but I suppose that he was referring to the following original interview subjects: the assistant attorney general of California, the former California secretary for the environment (now under consideration by President-elect Obama for the office of “Climate Czar”); the mayor of Richmond, California; current and former senior staff of key congressional committees and members of congress, the president of the League of Conservation Voters, a lead oil industry researcher for the U.S. General Accounting Office, executive director of West County Toxics Coalition, energy director of Public Citizen, research director of Consumer Watchdog, a former director of the U.S. Commodity Futures Trading Commission (CFTC), and the Vice President of the American Antitrust Institute among numerous other lawyers, legal scholars, policy experts, advocates for consumer, human rights, public health, environmental, labor rights, and anti-war concerns, community activists, and concerned citizens.
LeVine argues that, “by contrast” to me, Tarbell was “a “superlatively meticulous researcher who quoted Standard insiders at length.” Tarbell did conduct a series of interviews with Standard Oil’s Henry Rogers. However, Tarbell treats Rogers’ insights with a high and appropriate level of skepticism. For, as she writes in her autobiography, she quickly realized that Rogers had ulterior motives—hoping to sway her coverage of what ultimately became a charge of conspiracy against him involving Standard’s takeover of the Vacuum Oil Works. As I do in The Tyranny of Oil, Tarbell’s sources were primarily congressional hearings, government investigations, legal proceedings, investigative journalism performed by herself and her colleagues, the minutia of oil company financial reports, and one-on-one interviews with those negatively impacted by the industry.
LeVine contends, “Juhasz bases almost the entirety of this 400-page text on the work of others. For example, she lifts colorful descriptions . . . from newspaper articles, a method that appears lazy in a book on contemporary events.”
This not-so-subtle charge of plagiarism is not only unfounded, it is silly. LeVine knows every instance in which I quote a newspaper or other article because I reference every one, either in the text or among the book’s more than 750 footnotes. Moreover, while this book is based on massive amounts of original research, I was also careful not to reinvent the wheel. Like The Bush Agenda, The Tyranny of Oil is as much a resource and reference guide as a source of new and original information and analysis. One of my goals is to make readers aware of all of the excellent work, both by individuals and organizations, available to them beyond my own writing.
“Blocking” Clean Energy Technology
LeVine’s factual errors begin with the third sentence of his review. Never do I write, as he claims, that the oil companies are working to block clean energy technology. I do find, through an original detailed investigation of their tax filings, that—contrary to their expensive PR campaigns seeking to recast themselves as “energy” (vs. merely oil) companies—ExxonMobil, Chevron, ConocoPhillips, BP, Shell and Marathon spend, on average, only about 2 percent of their annual expenditures on clean energy, while simultaneously pursuing increasingly environmentally destructive methods to produce oil, such as from the tar sands of Canada, the shale regions of the Midwest, and off the nation’s and the world’s coasts.
Wars for Oil
LeVine mischaracterizes several points in my book as inaccuracies, implying, for example, that I have argued that World War I, World War II, and Vietnam were “wars for oil.” While many fine scholars do make these points in numerous other works, they are not found in The Tyranny of Oil. LeVine writes: “World War I was not an ‘oil war’ any more than was World War II or the Vietnam War, except in the obvious sense that you need oil to win a war…” While I write, “World War I was the first large-scale oil war: oil was the source of victory and its reward.” That is all I wrote about World War I, and never do I describe World War II or Vietnam as wars for oil. Rather, I devote virtually an entire chapter to laying out the case that the war in Iraq is about oil, as is oil at the root of the threat of war against Iran, and that the Bush administration has put in place the largest realignment of the U.S. military since the end of the cold war–expanding the presence of the U.S. military around the world to those places where oil is found and transported—and that the threat of more wars, be they in the Middle East or Africa, has grown accordingly.
LeVine then contends, “The Nobel brothers and Shell did not increase Soviet oil production in the 1920s, since the oil properties of both companies had been appropriated by then.” Here is what I write: “At the end of the war… The Russians increased production, led by the Nobel Brothers and Shell.” While nationalization (the correct term is “expropriation,” not “appropriation”) of Russia’s oil holdings did take place following the Russian revolution, this did not stop the oil companies from doing business with the Russians. Among the oil companies that sold the Russians the technology used to vastly expand production following the war, bought Russia’s oil exports, and marketed them on a global stage were Shell and Standard Oil (which had bought controlling rights to half the Nobel interests in Russia in July 1920).
Levine writes, “Juhasz describes the 1991 film Terminator 2 . . . . to illustrate her overall contention that Big Oil is a restoration of Standard Oil, and so like its predecessor must be broken up. This is a mighty stretch. ExxonMobil, Chevron and ConocoPhillips are children of Standard. But Shell merely bought the motor oil department of Pennzoil after Pennzoil spun off its production and exploration divisions to Devon Energy. And refiner Valero simply bought an Exxon refinery and retail distribution chain. This is not Rockefeller’s Standard Oil, nor have the “spawn” of Standard, as Juhasz irritatingly and repeatedly refers to the companies, reconstituted anything resembling the monopoly power enjoyed by him or by Big Oil as it was until two decades ago.”
Here is what I write in the book, “It took a hundred years, but today the several pieces of Standard Oil are nearing full reunification. The political power and control exercised by today’s oil giants over our government have just one historical precedent: the heyday of Standard Oil. In 1999, government regulators allowed the two largest post breakup pieces of Standard Oil to merge and form the largest most profitable company in history: ExxonMobil. In fact, all three of the top US oil companies today are direct descendants of Standard Oil. They are, in order, ExxonMobil, Chevron and ConocoPhillips. The fifth largest U.S. oil company, Marathon, is also a direct descendant. Moreover; all five of the largest private oil companies in the world, ExxonMobil the Shell Oil Group, BP, Chevron and ConocoPhillips, are made up of former parts of Standard Oil.”
Pennzoil was the product of four baby-Standard company mergers: Eureka Pipe Line Company, South Penn Oil Company, National Transit Company, and South West Pennsylvania Pipe lines.
BP’s purchase of Amoco and Arco gave it Standard Oil of Indiana and Atlantic Refining Company (brought into the Rockefeller fold in 1874), respectively.
Finally, nowhere in The Tyranny of Oil do I argue that the US is a facing an oil monopoly. However, I do trace the depths of collusion and over-concentration within the oil industry. Since 1991 there have been more than 2600 mergers in the industry. ExxonMobil, Chevron, ConocoPhillips, BP, Shell and Valero now control almost 60 percent of the U.S. refining market—roughly twice as much as the largest companies controlled just 12 years ago. Excluding Valero, these same companies control more than 60 percent of U.S. gas stations. Thousands of independent oil refineries and gas stations have been bought up or pushed out, leaving a market dominated by a few oil giants.
It was in response to the political power of Standard Oil, nearly a century ago, that people across the United States organized against the company in a mass people’s movement, ultimately leading to the breakup of the company into 34 separate corporate parts.
I offer this description of a newspaper cartoon from the era depicting the U.S. Senate. “Towering above the seated senators, three times their individual size, stand grossly obese men representing the trusts. Each man is dressed in top hat and tails. Standard Oil, the most dominant, is the only company depicted by name among the “copper,” “iron,” “sugar,” “tin,” “coal,” and “paper bag” trusts. Above them a sign is posted: “This is a Senate of the monopolists, by the monopolists, for the monopolists!” Off in the far left corner is a small sign that reads “People’s Entrance,” below which is a bolted and barred door marked “closed.”
Today, I argue, the largest oil companies operating in the United States have employed a strategy of consolidation, concentration, and political manipulation to acquire vast and utterly unequaled economic strength—not only the largest profits in corporate history, but profits which utterly dwarf those of any other U.S. industry. These profits give the industry cash-on-hand with which to fundamentally impact policy-making in a way which those whose concerns are peace, human rights, the environment, economic justice, public health, consumer rights, labor rights, and the like, cannot hope to equal. This, in turn, allows the industry to exercise political control over the government. This economic and political strength has just one historical precedent: that of Standard Oil.
Critiquing the Industry
LeVine’s aim in reviewing my book seems to be to defend Big Oil against any criticism. It is very interesting, therefore, that LeVine reserves his desperately critical analysis of my book almost exclusively to the two chapters on history, while virtually ignoring the book’s remaining seven chapters investigating the current state of the U.S. refining and marketing sectors; the world and domestic crude oil markets; the costs associated with the production of oil from tar, shale or offshore; the development and undoing of U.S. antitrust policy; the role of the oil industry within and on the Bush administration; the industry’s influence over policy decision-making in local, state, national, and international arenas; the growing use of the U.S. military as an oil protective force; and the numerous other policy prescriptions I make in the book in addition to my call for breaking up the nation’s oil companies.
My goal in writing The Tyranny of Oil was to offer an analysis that has been sorely missing in U.S. literature since the 1975 publication of Anthony Sampson’s classic book, The Seven Sisters: an unapologetically and vitally necessary in-depth and serious critique of the current state of the U.S. oil industry which also raises the voices of those not regularly heard on nightly news programs, television commercials, and in books. It was also to make the case that, just as in the time of Standard Oil, only another people’s movement can now effectively counter this great challenge to American democracy.