OPEC Seeks Welfare Handouts
OPEC Tries to Act Like U.S. Corporations
by Peter Lardner
Publisher's note: We've seen this before. Corporations are quick to turn against the free market as soon as they lose a privileged position -- then they beg for handouts from taxpayers instead of working harder to meet marketplace needs. Now OPEC, the cartel of oil-producing nations, has decided to play the same game, seeking welfare payments as "compensation" if nations buy less of their oil. British Deputy Prime Minister John Prescott slammed OPEC countries on Wednesday for insisting on compensation should they sell less oil because the world successfully battles global warming.
"If they are prepared to give us money back from when (oil) was thirty dollars a barrel, I'd be very interested, but presumably they are not," Prescott told reporters at United Nations climate talks in Buenos Aires.
The sentiment was supported by British Environment Minister Michael Meacher, who said that financial assistance should be given not to oil producers but to developing nations likely to suffer the most severe consequences of global warming, such as flood-stricken Honduras.
"There is a great deal of difference between compensating someone who has had a high oil price for a very long time ... and assisting countries with rising sea levels - Bangladesh, Egypt, and island states," Meacher told a news conference.
Environment ministers and negotiators from around the world have gathered at the November 2-13 summit to chart a course for implementing the 1997 Kyoto Protocol, which would commit developed countries to rein in fossil fuel and other emissions over the next two decades.
Any resulting shrinkage in world oil demand growth, as the industrialised world introduces new energy-related taxes aimed at curbing emissions, could cut deeply into the revenues of the Organisation of the Petroleum Exporting Countries and other oil-producing nations.
OPEC itself predicts revenue losses of $30 billion per year annually by 2020.
In that light, Saudi Arabia, Kuwait, Venezuela, Qatar and other OPEC members have been determined to preserve wording in the Kyoto agreement that would allow for compensation to countries suffering adverse economic effects from actions taken by developed countries to reduce their emissions.
The text is aimed at providing assistance to developing countries that are forced to adapt to carbon-curbing measures and new technologies, and particularly to low-lying regions and island states most susceptible to climate change and accompanying rising sea levels.
Last week, OPEC said it feared the climate pact would cripple the petroleum-driven economies of its member countries.
"We are not against scientific or technological change, because this will benefit all of humanity. But we do not want to be punished unjustly and singled out," Shokri Ghanem, OPEC Director of Research, told Reuters.
"OPEC is not against measures to clean the environment, but there should be some justice," he said.
But Prescott said industrialised countries would likely oppose compensation to oil producers and that the oil cartel had raised similar complaints about the climate pact while in Kyoto.
"OPEC have their view. They feel it is a chance to make the case for compensation, and the Protocol does talk about a cost," Prescott said.
"But OPEC at Kyoto didn't want the agreement either," he said.
Prescott added that delegates at the Buenos Aires conference were determined to come away with a positive result.
"What happened in the Latin American countries, what's happening with the kind of droughts and floods and hurricanes, has made them feel they must go away from this conference with some sort of agreement," Prescott said.
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