November 5, 2003
A BuzzFlash Exclusive
A Short Sighted Energy Policy: Halliburton, Oil, and the Need for a New Energy and Jobs Strategy
BUZZFLASH GUEST COMMENTARY
Once again, the Bush Administration has chosen to mislead the American People. The latest outrage involves inflated oil prices and no-bid contracts in Iraq for Dick Cheneyís Halliburton Company, a give-a-way that leaves American taxpayers and desperate Iraqi civilians footing the bill. This Administrationís allegiance to corporate interests has distorted the direction of US policies both at home and abroad. But there is a better way, it is time for a new vision on energy policy and national security, that reinvests in American communities creates, jobs at home, and ends our dependence on foreign oil and its corrupting political influence once and for all.
What exactly is Halliburton doing? Hereís the scoop:
New information released today indicates that the Director of the Defense Energy Support Center Jeffery Jones at the Pentagon has admitted that the prices Halliburton is charging the US government could be "excessively high" and may amount to "at least twice" the price that "it should be." (1) The Bush Administrationís latest sweetheart deal with Halliburton puts the administrations conflict of interests on stark display. This secret deal is costing American taxpayers millions and hurting efforts to rebuild Iraq. Energy experts have characterized Halliburtonís pricing schemes as "highway robbery." (2) While others have said that Halliburtonís prices are "outrageously high" and that Halliburton could be guilty of "price gouging." (3)
The Department of Defense entered into a no-bid contract with Halliburton subsidiary Kellogg, Brown and Root (KBR) in March of 2003. The Defense Department failed to disclose the nature of the contract, causing members of Congress Dingell and Waxman to characterize Halliburtonís contract as "secret." (4) As part of this contract, KBR has been distributing fuel to Iraq. The Department of Defense initially claimed that KBRís contract was temporary, promising that a competitive bidding process would be instated for the awarding of contracts. However, the Department of Defense, under the leadership of the Bush Administration, has continued to extend the no-bid contract, a move that costs American tax payers millions of dollars. Since March, Halliburton has been charging the US government excessive prices. For instance, as of October 19, 2003, Halliburton had imported 61,304,091 gallons of gasoline from Kuwait into Iraq, a distance of approximately 400 miles. The US government has paid Halliburton an average price of $2.65 per gallon. (5) According to energy experts, the cost of buying and transporting fuel from Kuwait to Iraq is less than $1.00 per gallon, meaning that Halliburton is charging US taxpayers, more than double of what is fair. (6) It only costs the Iraqi oil company, SOMO, 97 cents per gallon to import oil from Kuwait to Iraq, for example. Reports released today indicate that a department within the US government can buy and transport fuel for less than half the cost that Halliburton is charging. (7)
The situation becomes even more appalling when one considers the fact that Halliburton is selling oil to Iraqis at a price between 4 to 15 cents per gallon, meaning that American tax payers are subsidizing 90% of these inflated prices. (8) At a time when millions of Americans are out of work and many working families cannot make ends meet, the American people are paying unjustifiable profits for gasoline sold in a country with the second largest oil reserve in the world.
But it isnít just the American tax payers who are footing Halliburtonís bill. According to the US Army Corps of Engineers, $600 million from the Development Fund for Iraq, the program which succeeded the UN-run Oil for Food Program to render humanitarian assistance to Iraqis, has gone to pay Halliburton for its services. (9) Thus, not only are hard working Americanís paying for Bushís sweetheart deal with Halliburton so are the vulnerable Iraqi people who are intended to be helped by the development fund.
For months, Representatives Dingell and Waxman, ranking Democrats in the US Congress have sought information about Halliburtonís pricing techniques and contract procedures. The Bush Administration has failed to respond to these multiple requests, instead, have stonewalled the publics right to know, while at the same time extending Halliburtonís no-bid sweetheart deal. The Campaign for Americaís Future in partnership with the Apollo Alliance has encouraged their supporters to send letters to the Office of Management and Budget asking OMB to provide the American people with an accounting of where tax payer dollars are going. These requests, also, were met with no response.
A Better Way: A New Energy and Jobs Strategy
Halliburton sweetheart deals are another example of why the US needs an energy policy that breaks our addiction to foreign oil. Not until our country begins to invest in domestic energy alternatives can we free ourselves from big oil special interests, environmental problems, and misdirected foreign policy. The time is right for a national commitment to energy independence on the scale of John Kennedy's Apollo Project, which put a man on the moon. A bold program to advance energy efficiency and promote renewable energy, like wind and solar power, and drive investment into cutting edge technology and smart public infrastructure, would create millions of jobs and offer needed stimulus to our flagging economy. The Apollo Alliance for Good Jobs and Energy Independence seeks to end US dependence on foreign oil by investing in sustainable energy technologies that not only bring about positive environmental results, but also embrace positive economic change, job creation, and community renewal.
Backed by 17 major international labor unions and a broad cross section of the environmental community, the Apollo Alliance calls for an investment of 300 billion dollars to jump-start America on the road to energy independence. Such an Apollo project will promote new renewable energy sources. It will convert assembly lines to put American-made advanced technology cars on the road. It will help older plants improve their environmental performance, preserving domestic manufacturing jobs. It will deploy new technology for pollution control at older power plants, and invest in research and development to create a hydrogen energy revolution.
The new Apollo project will promote high-performance "green" building and push a new generation of energy-efficient appliances to market--driving up efficiency without driving jobs overseas. It will support smart growth and mass transit, increase brownfield redevelopment and rebuild transportation and water infrastructure, relieving municipal budget pressures. And an Apollo project will strengthen, not repeal, regulatory protections for consumers, workers and the environment. The latest corporate excesses of the Bush administration remind us once again, that the time is right for an Apollo project. This effort must be bold enough to solve the problems at hand, investing in a stronger economy. It must be broad-based, sharing the benefits of investment widely across the economy and insuring that no single sector bears all the costs. And, it must be immediate, deploying proven and cost-effective technologies that exist today, not placing all our hopes on long-term R&D like the Bush plan for a hydrogen "freedom car."
Like Kennedyís Apollo Project, investing in new sustainable energy technologies is not just about dollars and cents. It is also about investing in a new way of thinking and a new way of life. We can no longer afford to chose between jobs and the environment, our nations security or our prosperity. The Apollo Alliance for Good Jobs and Energy Independence seeks to unite various aspects of the American dream -- economic wellbeing, civic participation, government accountability and concern for environmental quality -- together in a new strategic initiative bound to change the direction of failed US energy policy.
Instead of allowing our government to continue throwing money away in no-bid contracts and sweetheart deals, we should pressure them to invest in the future. The time is right. Visit www.apolloalliance.org and sign our petition calling for an investigation of Halliburtonís overcharging for services in Iraq. Join our email action list, and begin fighting for a new energy and economic future that rebuilds America and makes us all more secure.
A BUZZFLASH GUEST COMMENTARY
Bracken Hendricks serves as Executive Director of the Apollo Alliance and the Director of the New Growth Initiative at the Institute for Americaís Future.
Skye Perryman is a policy fellow at the Institute for Americaís Future.
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A letter to Lt. Gen. Robert B. Flowers from Rep. Waxman and Rep. John
November 5, 2003.
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