Sunday April 1, 2001
The Observer

When George Bush was Governor of Texas, he called upon the big oil companies, such as Exxon-Mobil, to draw up a draft for the state's Clean Air Act. They came up with a Bill allowing them to regulate themselves. Just as Bush was signing it into law, in December 1988, the town of Odessa - a few miles from his birthplace - was engulfed by a black, toxic smoke so thick that drivers had to use their headlights during daytime.

The President they call 'the Toxic Texan' took office on a platform pledging to turn his gubernatorial principles into national policy - to make America a 'greater Texas'. And last week Bush began his attempt to make the world environment that of a 'greater America'. He 'declared war on the environment' - in the words of Democrat Senator Barbara Boxer, both at home and on the international stage.

Defying his European allies and many Third World countries, Bush in effect killed off the Kyoto Protocol of 1997 - by which more than 100 nations undertook to reduce emissions of 'greenhouse gases' that cause global warming - turning the US, for environmentalists, into a greedy, polluting pariah. On the domestic front, meanwhile, a series of brazen measures has provoked an outcry from even the most moderate and established of environmental groups.

Withdrawal by the US from Kyoto tolls a death knell for the treaty, because although it accounts for only 4 per cent of the world's population, it is responsible for 25 per cent of the emissions of gases that cause the greenhouse effect. Half of America's industrial might still burns fossil fuels and belches out fumes, while Americans themselves drive heavy trucks and cars further than any other people - to the mall and across the infinite landscape - and even the average household boasts 2.8 television sets and a wealth of electrical appliances.

The story behind the singular determination of Bush to fly in the face of world opinion, the sentiments of most Americans and even many in his own government reveals adherence to ideological rigour and a payment of debts to the business interests that helped him to the White House - above all, oil and coal. Oil runs through every sinew and vein of the Bush administration; rarely, if ever, has a Western government been so intimately entwined with a single industry. When Bush assumed office, however, oil and other energy industries were in the political cold after eight years of Bill Clinton's environmental record. Prompted by his keenly environmentalist deputy, Al Gore, Clinton had cautiously recommended ratification of Kyoto, but it was flatly rejected in the Senate.

Clinton nevertheless put more wilderness under federal protection than any President since Franklin Roosevelt and decreed a sweeping series of anti-pollution, clean air and clean water measures, facing down formidable constituencies such as the timber industry, sugar barons, big utility and automotive lobbies - and, above all, Big Oil and King Coal.

Determined backing for Bush was thereby assured from these quarters. According to the Centre for Responsive Politics, $10 million out of $14m in political contributions from oil and gas companies to the last election went to Republican candidates. The Bush family has roots in the oil business, and the President began his own career with a series of unsuccessful drilling ventures bailed out by bigger oil com panies. He was backed by most of the big names in oil, especially Texaco and Exxon-Mobil, in his campaigns for Governor and later President. Bush has now charged his Vice-President Dick Cheney - the pivotal power in the White House - to compile an overall energy policy document due for publication before the completion of his first 100 days in office. Cheney's connections to big oil have been close-knit and especially lucrative.

The Pentagon chief under Bush senior, Cheney used connections forged by the Gulf war to open up valuable business for the giant Halliburton Company, of which he was made chief executive in 1995, and which does 70 per cent of its $15 billion sales to Arab governments. Bush's Commerce Secretary, Don Evans, is a long-time personal friend from the President's home town of Midland, Texas, and a man raised in oil. His father was a manager for Shell and he is chairman and chief executive of the Midland-based Tom Brown oil company which, before the Eighties crash, was worth $2bn - equivalent to the Ford Corporation.

Among the less well known oil connections are those of America's ambassador to London, Doug Farish, who went into
politics as an aide to Bush senior in 1964 and is described by former First Lady Barbara Bush as 'one of the family'.

Despite his reclusive image as a rancher who sold horses to the Queen, Farish is a Texas oil magnate from a Texas oil family. His grandfather founded the Humble Oil and Refining Company, part of what is now Exxon, and later became president of Standard Oil. Farish's own dealings in the oil state have not only been in liquid gold but also gas exploration and mining. Bush's break with world opinion on Kyoto was debated and contested within the administration, with Secretary of State Colin Powell and the Treasury reportedly eager to leave a door open to join Britain and other nations in a commitment to reduce 'greenhouse gas' emissions.

But even in the State Department, big oil has its man moulding policy: Middle East guru Richard Haas who, with Powell and Cheney, has an aversion to unilateral sanctions that hurt business.

Haas hails from the Brookings think-tank, and has propelled America's preparedness to consider easing sanctions on Iraq with a document entitled 'Iraq: A Modified Approach', written by Meghan O'Sullivan, a researcher who worked under Haas at Brookings. The paper argues that embargoes are 'bad for particular businesses' - principally oil - and it emerges that much of Haas's project was funded by Conoco and Arco, with whom he has worked as a consultant. He also has a seat on the board of oil firm, Santa Fe International. With these and other connections in place, big oil was quick to move once Bush was inaugurated. The National Petrochemical Refiners Association lobbied first, for a rollback of clean-air standards for buses and big trucks decreed by Clinton.

The association's counsel, Bob Slaughter, said he hoped 'the administration would be more interested in balancing the energy supply and environmental concerns' - and it was: Bush put a moratorium on this and all similar decrees, citing a fear of fuel price rises. Bush had promised to regulate the emissions of carbon dioxide, but two weeks ago he reversed this, citing a report commissioned last year by Republican Senator David McIntosh, saying that carbon dioxide restrictions could 'boost electricity prices and hurt coal-fired utilities'. Shortly before the announcement, Washington was blitzed by the 'Coal Based Generators' group to lobby for a reversal on emissions and tax breaks for 'clean coal' utilities.

Leading the group was Irl Engelhardt, chairman of Peabody, America's largest coal enterprise, who was also a major Republican contributor and energy adviser to the Bush-Cheney transition team. The same letter that disclosed the volte-face on carbon dioxide also announced the scrapping of new Clinton regulations reducing arsenic levels in drinking water by 80 per cent. The EPA's former administrator for water, Chuck Fox, who drafted the legislation, said: 'This action will jeopardise the health of millions of Americans.' And its backer in Congress, Henry Waxman, called the ruling 'another example of payback to industries that gave millions of dollars in campaign contributions'.

Fear of continuing fuel price rises and shrinking supply then dictated the White House's reaction to the energy crisis in California - ironically caused, said the Democrats, by the very deregulation policies favoured by the administration on a national scale. Bush's language - and his catchphrase that 'national security depends on energy security' - turned the crisis into a national emergency which dovetailed into the arguments that tranches of federal land protected by Clinton - including the vast and virgin Arctic wilderness in Alaska - should be opened up for prospecting and drilling.

These announcements - as well as Kyoto - have stirred even the most mainstream groups to exasperation, with the executive director of the Sierra Club - equivalent to the National Trust - predicting 'a very major fight'. Two entwined schools of thought form the core of the Bush administration: deregulation and decentralisation. The underpinning ideology is the injection of market forces into management of the public domain, and the belief that industry should police itself. Supporters of last week's decision include David Victor, fellow of science and technology at the Council on Foreign Relations in New York. Victor argues that Kyoto cannot work, nor can unrealistic regulations on emissions reduction.

Instead he argues for 'economic incentives that, over time, will slow the build-up of carbon dioxide without the imposition of binding targets for a far-off future'. This ideology is embodied by John Graham, whom Bush picked last weekend to head his Office of Management and Budget - which oversees all regulatory agencies - an appointment which thrilled lobbyists. Graham, regarded as the guru of cost benefit analysis, has a history of eco-scepticism.

Last week's decision to kill Kyoto did not enjoy full backing of the administration - some quarters of which saw it as a
fait accompli from the White House and the National Security Council. Successive opinion polls show that the environment
is a major issue for voters, and Bush's enemies are lining up for a PR battle. Even Republican Representative Sherwood Boehlert believes Bush is 'taking a risk' by issuing 'so many controversial decisions so early'.
Mark Mellman, a Democrat pollster, said: 'Bush is creating a political disaster for himself.'