Obama and BP Have Lived by The Same Sword

Even as President Obama castigates BP, he and the oil giant earned the same comeuppance as fallout from the oil spill.

As the oil spill catastrophe drags on and on the President suffers his most virulent attacks from his leftist base, including the media and the environmental movement.  These are the folks who fell for the hype and believed that Barack Obama was The One.  During the campaign they provided the money, the cheering crowds at a thousand rallies and the groveling,  slobbering TV coverage.

They believed that experience as a community organizer, which is little more than making petulant demands of the local establishment, was appropriate qualification for President.  They believed government could do anything if only that evil Bush wasn’t in charge.  Now they are disillusioned and angry.

Obama briefly fell back into community organizer mode when he demanded, petulantly, that someone “plug the damn hole.”  But he now is the establishment.  Now he is the target of the petulant demands he used to hurl at others, and because he has absolutely no relevant experience he is incompetent to respond.

We’re told that BP is representative of the free market over government.  But the truth is not really consistent with this narrative.  BP is as much or more a creature of government as of the market.

Today, politicians are in full stampede, all competing  to condemn BP in stronger terms than the others.  But before the oil spill banned it from membership, BP was a major player in the game of insider politics in Washington.  Indeed, BP was often mentioned favorably by the same politicians and activists who continuously demand ever increasing government power over the private sector.

In a speech last March, a month before the Deepwater Horizon oil rig exploded, BP CEO Tony Hayward gave a speech to some of the most influential politicians, lobbyists, and activists in Washington.  He won their respect and admiration by giving full support to cap and trade, the energy taxing and rationing scheme Obama and the Democrats in Congress have been trying to enact since early last year.  He said in part:

BP has been calling for action for more than a decade—preferably via creating a price for carbon through market mechanisms…I’d suggest there are clear signs that governments around the world are sensitive to this and are beginning to do something about it.

The process may seem somewhat disjointed—even frustrating—at times, an example being Congress’s inconclusive attempts to pass a cap-and-trade bill.

Creating a price for carbon through market mechanisms is code for a government imposed, artificial, energy shortage.  This would be accomplished by requiring energy producers to purchase government issued permission slips.

The cost of permission slips would be added to the cost of energy production, raising energy prices for all businesses and households.  The law of supply and demand would increase the price even more because  government would CAP energy production at less than is now consumed by limiting the number of permission slips.  The big winners would of course be the federal government that would rake in Billions, and politically favored companies that would get to buy permission slips directly from the government and then resell them at a higher price.

Hayward continued…

And these are more than just words. At BP we factor a carbon cost into both our investment choices and the engineering design of new projects. This is our way of ensuring that our investments are competitive not only in today’s world, but in a future where carbon has a more robust price.

Translation, BP is setting itself up to profit not so much from selling energy to customers but from a cap and trade scheme that politically favors its “investment choices.”

On April 22, two days after the explosion but before the world became aware of the uncontrollable oil belching, Senator John Kerry, principle author of the latest version of Cap and Trade announced he had the support of three major oil companies, including BP, for his bill.  This came after weeks of closed door meetings with lobbyists from the three companies.

More excerpts from Hayward’s speech reveal what BP would get in return for supporting the Kerry cap and trade bill:.

Looking at the power pathway, we believe it makes sense to use much more natural gas. Gas offers the greatest potential to achieve the largest CO2 reductions—at the lowest cost and in the shortest time…It’s easily the cleanest burning fossil fuel—around 50 percent cleaner than coal…

“Cleaner” means less CO2, the naturally occurring gas that the global warming crowd claims will cause a world-wide climate catastrophe – unless of course government oversees and controls all energy production and consumption – and pretty much everything else.  Hayward continued…

Given these facts, it seems extraordinary that the United States is still focused on building coal fired power plants…We see natural gas as a key ingredient of a secure pathway to lower-carbon power…

At BP…in our low carbon energy business [natural gas] we have invested over $4 billion to date, and we’re continuing to invest more than $1 billion a year.

So there it is.  The Kerry version of cap and trade would diverge from leftist dogma that  all fossil fuels are bad and all must be banned in order to “save the planet.”  Instead the government would, in the name of reducing carbon and global warming, force electricity producers all across the mid west to switch from one fossil fuel, coal, to a different fossil fuel, natural gas.  And BP, would just happen to be in the right place at the right time to make the most from its natural gas investment – at the expense of coal the producers who lost the game of political horse trading in Washington.

Of course BP’s investments in years of lobbying have all been washed away by the oil slicked waters of the Gulf of Mexico.  Now a pariah in Washington, BP may be forced to become a lot more free market oriented in the future – assuming it survives the current political offensive.

Obama and BP both staked their futures on their skills as manipulators of government policy.  Both are now learning how random events can bring political high fliers crashing back to hard ground.