Colombia and Oil: Get it While You Can
COLOMBIA AND OIL: GET IT WHILE YOU CAN -- (House of Representatives - April 09, 2008)
The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Mr. Speaker, the Bush administration announced this week it will be sending to the Congress for approval the Colombia Free Trade Agreement. And the American people might ask, Colombia? Now? In 2008? What about the District of Columbia and getting gas prices lower here in our Nation's capital? Or what about more fairly priced student loans for the next generation who are attempting to improve their opportunities for the years ahead? Or what about dealing with mortgage foreclosures in the United States, which are at epidemic levels in places like Ohio and Michigan and Florida and California? No. The President sends us something to help another country. ``Colombia Free Trade,'' they call it.
Well, I would like to say to the American people tear the veneer off the agreement and look below it, and what you will find is crude. Oil. What this agreement really is about is more imported petroleum from one of the most undemocratic places in the world.
Colombia about 10 years ago was actually a net importer of oil. But today it is the fourth leading oil producer in South America. In fact, oil, rock/crude, has become Colombia's leading export product, and guess whom they send most of it to? You've got it right. The United States of America.
So what this Colombia Free Trade deal is all about is more imported oil, more dirty crude, more carbon emissions, more dependency of the people of the United States for energy, more living back in the 20th Century than embracing the 21st with energy independence here at home.
The oil picture in Colombia is clouded by rapidly declining production because of persistent attacks from people inside Colombia. What no one has mentioned, and the President didn't send it up here in his statement, is our country is already sending billions of dollars to Colombia to hold up the government. Why? To protect certain economic interests, including the rising export of petroleum.
This is a graph showing production levels of petroleum in Colombia back since the late 1980s, then up through 2000, when all of a sudden they started to decline because of unrest inside the country itself.
Now, it's no secret that there are 18 foreign oil companies in Colombia. Guess what. The majority of their headquarters is located right here in the United States. They have drilling operations in Colombia. California-based Occidental Petroleum launched an attempt to squeeze out of Colombia what oil remains with its discovery in 1983 of the Cano Limon field in the northeastern part of the country. The problem is that particular field produces less than a third of its total as recently as 4 years ago. Its production is going down.
British Petroleum, not to be outdone, has been drilling in the eastern plains in the Andes Mountains in the largest field in the country. However, that production has fallen by about two-thirds, and rather than 400,000 barrels a day, they produce about 170,000 barrels.
Faced with rapidly declining production, the Colombian Government has taken steps to improve the investment climate in Colombia and giving permission for foreign oil companies to own 100 percent stakes in oil ventures in Colombia. The Government of Colombia also established a lower sliding scale royalty fee, now at 8 percent on the smallest oil fields, and that set of actions have attracted an estimated $2 billion more in foreign investments since 2006. The oil industry is focusing heavily on this country.
Entering into the picture is the geopolitical position of Colombia because if we look at the United States having nearly half of their exports, Venezuela is number two, and we all know the difficulties with Venezuela. So there's a little strategic problem here related to the U.S. perception across Latin America. But it's important to tear the veneer off something called ``Colombia Free Trade'' and look at what is actually being traded out of Colombia.
While the United States continues to support the violent regime in Colombia, political unrest and political repression continue to cloud the discussion, and declining oil exports prove it. We can go back to 1988 when a car bomb outside of Occidental's nine-story Colombian headquarters in Bogota badly damaged that building. In October, 2000, a truck bomb nearly missed a bus filled with 40 Occidental secretaries and other company employees. And in April, 2001, rebels seized a bus filled with 100 Occidental oil workers.
Mr. Speaker, I'm going to include in the Record lots of information about Occidental Petroleum, which is just one example of what's happening in Colombia, and also some of Occidental Petroleum's political influence here in Washington, in the Congress and in the White House.
Occidental Petroleum Corporation
Occidental Petroleum Corporation is one of the largest U.S.-based oil and gas multinationals, with exploration projects in three states and nine foreign countries, including Colombia. It has operated in Colombia for more than three decades; in 1983, Occidental discovered Caño Limón, Colombia's second-largest oil field and one of only 50 billion-barrel-class fields in the world. Occidental's investment in Caño Limón paid off long ago, with its share of production yielding hundreds of millions of dollars annually. Even through years of rebel attacks and pipeline closings, Caño Limón Field continues to be a profitable venture for Occidental.
In recent years, Occidental has simplified its oil and gas operations by focusing its operations in the United States, the Middle East and Latin America. Despite drastic oil price declines in 2001, Occidental Petroleum had its second-best annual earnings ever.
Annual sales: $14 billion
Annual net income: $1.2 billion.
CEO and annual executive salary: Ray Irani, $24 million (six-year average); Forbes Magazine ranked Irani the second-worst among executives who gave shareholders the least return on their investment compared with their own pay. In 2001, Irani's compensation package included free financial planning, country club dues and a $2.6 million bonus.
Founded: 1920.
Stock: Publicly traded (OXY) on the New York Stock Exchange.
Corporate headquarters: Los Angeles.
Employees: 8,235.
Colombia operations: Occidental owns Caño Limón Field in the province of Aruaca, operates three exploration projects elsewhere in Colombia, and, in 1998, swapped its holdings in the Philippines and Malaysia for Shell Oil's interests in several producing blocks of Colombia.
Worldwide holdings: Russia, Pakistan, Saudi Arabia, Yemen, Qatar, Oman, Ecuador, the Gulf of Mexico, the United States (Texas, California and Alaska).
Worldwide reserves: 2.17 billion barrels of oil.
Worldwide annual production: 461,000 barrels of oil per day.
Colombia annual production: 34,000 barrels of oil per day in 2002, up 79 percent from the year before.
LABOR CONDITIONS
In addition to sabotaging the physical structure of Occidental's Caño Limón Pipeline, Colombia's rebel groups have attacked, kidnapped and murdered company employees. Employees also have often been caught in the crossfire between the rebels and the military. Not unlike other multinationals in Colombia, Occidental makes it clear with its employees that it will not pay ransom in the event of their kidnapping. With few exceptions, the company hires Colombians from distant cities to work in the danger areas because they are less likely to be knowledgeable about military troop locations or security measures should they fall into the hands of guerrillas. Prospective contractors are rigorously screened by Occidental's psychologists to ferret out spies; workers must show identification cards at a half-dozen security checkpoints; and palm-reading devices restrict access to executive offices. Still, Colombia's rebels have succeeded in breaching the multinational's security on a number of occasions.
Watchdog groups have ranked Occidental poorly on human rights after the company pursued a protested oil exploration project in Colombia's cloud forest, home to 5,000 members of the U'wa tribe. In 2000, three children were killed after Occidental called on the military to break up a nonviolent U'wa blockade of the road to the drill site. After years of public pressure protesting Occidental's exploration on ancestral lands, the company announced in May 2002 that it was canceling the project. The company blamed its withdrawal on technical and economic factors, but many believe Occidental caved to negative publicity.
Occidental's stand on human rights in Colombia was also tainted after a 1998 air raid of the village of Santo Domingo near the Caño Limón Pipeline. That year, three American pilots of AirScan (a Florida-based security firm that Occidental uses to protect its oil interests from rebel attacks) marked hostile targets for the Colombian military in an antiguerilla operation. The pilots' assistance mistakenly led to the killing of 18 civilians, including nine children. Survivors from the village said the aircraft (U.S.-donated) attacked them as they ran out of their homes to a nearby road with their hands in the air. The Colombian government is still investigating.
OCCIDENTAL INFLUENCE ON CAPITOL HILL NOT NEUTRAL
Between 1996 and 2000, Occidental spent more than $8.6 million lobbying the U.S. government, including for U.S. military aid to Colombia. In the 2000 election cycle, the company gave hard and soft money totaling about $551,000, with about 60 percent going to Republican candidates and political action committees. The CEO of Occidental's chemical subsidiary, J. Roger Hirl, raised more than $100,000 in support of George W. Bush's bid for the presidency.
Occidental also has maintained links to the Democratic Party for many years, primarily through former Vice President Al Gore's father, the late Al Gore Sr., who after leaving the Senate took a $500,000-a-year job with an Occidental subsidiary, then served on the company board for 28 years.
When the younger Gore joined Clinton's ticket in 1992, Occidental loaned the Presidential Inauguration Committee $100,000 to help pay for the ceremony. And after Gore took office, the company gave nearly $500,000 in soft money to Democratic committees and causes. In late 1997, the former vice president championed a $3.65 billion sale to Occidental of the government's stake in Elk Hills Oil Field (California), representing the largest privatization of federal property in U.S. history. In 1998, when his father died, Gore inherited about $500,000 worth of Occidental stock.
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