Oil and the G8 governments

Oil is the key commodity for most national economies, and the G8 countries are no exception. The importance of oil for the US economy and the links between the Bush family and oil corporations are well known.

Russia has the biggest oil reserves of all the G8 countries, and its economic growth, fuelled primarily by the boom in oil production, is dangerously dependent on energy exports. With the instability in the Middle East, many Western governments and their oil and gas companies are courting Russia again. Its oil interests in Siberia have led it into tension with China and Japan. One of the key recommendations of the World Bank's Extractive Industries Review (EIR) was a ‘phase-out of fossil fuel funding by 2008’, which, if implemented, would have been a first step in redressing the subsidies given to fossil fuel development. The Department for International Development, as the UK’s representative, argued against this recommendation.

Blair doublespeak
In 2001 the UK government announced £100 million extra funding to support the pledge that 10% of the UK’s electricity would be generated from renewable sources by 2010. Simultaneously it was giving full support to new oil and gas developments, such as BP’s Baku-Ceyhan Pipeline. This oil and gas extracted and transported will release 177 million tonnes of carbon dioxide into the atmosphere, ten times the amount saved by the renewables programme. By 2020 Britain's airline industry is forecast to be producing 12% of the UK's carbon dioxide emissions, while aircraft are globally predicted to contribute up to 15% of global warming from all human activities within 50 years. Instead of tackling the root of the problem and increasing spending on public transportation or taxing aircraft fuel, worldwide money is being put into airport expansion and improving the service routes to airports.

Renewable energy
In July 2000, the G8 leaders agreed to set up a Renewable Energy Task Force with a remit to identify actions that can be taken to promote change in the supply, distribution and use of renewable energy in developing countries. In a press release at the time, Greenpeace rightly pointed out that the barriers to mainstreaming renewable energies were political and financial, not technical, estimating that it would take an investment of $660m to make solar energy competitive – about 0.5% of the $89bn spent by oil companies on exploration and production in 1998 alone. For all the talk of technological solutions, there is no golden fuel to replace oil. The only consistent way forward is to develop technologies which do not rely on fossil fuels and which are just, sustainable, appropriate, and which do not produce hazardous or toxic waste (unlike nuclear energy). We also need to severely cut energy consumption in rich countries. Energy efficiency can produce savings of 10-50%; wind power, in combination with a full range of renewable energy technologies, such as wave and solar, could then meet electricity needs; while localising production and sustainable and efficient public transport would cut our oil dependence even further. Moving in this direction requires an end to political and financial support for the oil industry, revoking its social licence to operate, in order to begin building an oil free future. The lies of the climate sceptics and Blair's rosy-tinted 'everybody-wins' techno-fix dreams must fall along the way.

What can we expect at the G8?
There will probably be headlines saying that action on climate change will be delivered through economic growth and scientific advancement. This is another way of saying 'business as usual', with the questionable methods of carbon trading and relying on nuclear advances. This is little more than hot air from leaders who are too scared to read the writing on the wall and take the plunge to seriously reduce CO2 emissions by prioritising energy efficiency and sustainable, renewable energy; ceasing financial and political support for oil companies; and supporting a just transition to renewable and sustainable energy worldwide.

The G8 countries produce around 47% of all global CO2 emissions. Government support for the oil industry is a key characteristic of oil production worldwide. Most of the world's top twenty oil companies are based in G8 countries, and all have close links with government, both formal and informal. As far as ecological footprints go, oil companies are stomping Godzillas.

According to a report by Friends of the Earth, by 2002 ExxonMobil's emissions alone had contributed up to 5.5% of total carbon dioxide concentrations above pre-industrial levels. As a result, the company is responsible for up to 3.7% of total attributable temperature change since 1882.

G8 oil companies

France: Total (formerly TotalFinaElf)

USA: ChevronTexaco, ExxonMobil, ConocoPhilips

Russia: Lukoil, Yukos Oil (recently renationalised),7 TNK (50% owned by BP), Gazprom, Sibneft.

UK: BP

UK/Netherlands: Royal Dutch Shell

Italy: ENI (some parts of the company trade as Agip)

Canada: PetroCan

Oil developments need money as well as the security and backing of western governments and international financial institutions such as the World Bank Group (WBG) and International Monetary Fund (IMF). Since 1992 the WBG has provided $11bn of finance for fossil fuel projects around the world, including $4bn for oil projects – 82% of which were designed for export to western countries. The G8 countries exercise powerful influence on the WBG, with the USA (16.41%), Japan (7.87%), Germany (4.49%), the UK (4.31%) and France (4.31%) making up 37.39% of the shares and each electing their own executive director to sit on the 24-strong board deciding which projects receive finance.