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Texas: the oil tanker with a dark past

Chevron-Texaco, the first patron of the American political life

After enriching itself with the support of General Franco during the Spanish civil war and World War II, and after having taken the best part of Saudi deposits, Chevron Texaco has become one of the 4 largest oil companies of the world. It is also the most important contributor political parties have in the United States. The company follows closely the White House’s strategic conception so that it always meets its interests. This is the reason why it sponsored studies that encouraged the invasion of Iraq before taking control of its oil fields.

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Among the men that participated in the race for oil in Spindletop, Texas in 1901, was Joseph Cullinan, a robust and tough man, who was the son of an immigrant that had escaped the great Irish famine of 1848. After having worked for 20 years for the Standard Oil/future Rockefeller’s Exxon-Mobil, he received its modest assistance to found there the Texas Fuel Company with a seed capital of 50 000 dollars. He found a partner in New Yorker Arnold Schlaet, who had worked in the leather business and was a much more clever businessman. Together, they renamed the Texas Company, which reduced to only three syllables soon became Texaco. It prospered by reselling the Spindletop oil to the Southerners sugar cane producers who saw in it a good alternative to slaves and to the Standard of the Eastern shore of the country.

In 1904, the company produced about 50% of all American oil and in the following years it succeeded in diversifying its sources of supply to avoid Rockefeller’s war of prices. Texaco was finally established in Houston, the oil capital, where it still has its headquarters, a 13-floor- building decorated with the star of Texas. While the company prospered, tensions among shareholders in Houston and speculators from New York increased. Arnold Schlaet reproached Cullinan for his autocratic character and his underestimation of financers. Cullinan, on his side, reproached Schalaet for rejecting all Texan initiatives. The breaking took place when in 1913 Schaelt sent a group of shareholders to Houston to put Cullinan in minority and it was Elgood Lufkin, an Easterner more flexible than Schaelt and graduated from the Massachusetts Institute of Technology, who became manager of the company.

Cullinan, the rustic Irish, left in Houston the memories of a solitary pioneer who, following the orders of his new company, had to fly the black flag over the Petroleum Building as a sign of “warning against privileges and oppression” [1].
However, thanks to its tankers in the seas, Texaco won a place among the “Seven Sisters” that after WWI defined the rules of the international game regarding the extraction, transportation, processing and marketing of oil.
Chevron, on its part, quickly went into the orbit of Rockefeller after its start as Pacific Coast Oil Co. near Los Angeles (California) about 1880. Actually, Standard Oil took it over during its meteoric expansion at the end of the XIX century to finally “spit” it as Standard Oil of California (SOCAL) after the federal dismantling of the Rockefeller monopoly in 1911 [2].
Nevertheless, Standard Oil remained in the orbit of the oil magnate that improved its decentralized trust system with the purpose of keeping his hegemony. But it was New Jersey’s branch, future Exxon, the one that made it the best whereas SOCAL was happy to easily subsist.

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Torkild Rieber
on the cover of Time magazine in 1936

The destinies of both companies converged for the first time in Saudi Arabia: an old protégé of Cullinan who had reached the control of Texaco, Torkild Rieber joined forces with SOCAL which had just gotten big concessions in Bahrain to establish itself in the Arab kingdom to the detriment of French, English and other American companies which were hold back due to an agreement that limited their expansion. Thus, the Arab-American company that was named Aramco in 1944 was founded and in 1948 Exxon and Mobil joined it thanks to the vastness of its deposits. Of course, they did their best not to let other companies establish themselves. They were very satisfied for they had just confirmed they had taken control of the biggest deposits in the world. It was guided by the generous offering of SOCAL and Texaco, future Chevron-Texaco, that the sovereign of Arabia open the doors of his kingdom in 1939.

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Dhahran City

The new city of Dhahran, built in the site of the first founded deposit of the country, became a symbol of sudden richness that in the twinkling of an eye allowed the transformation of the desert into a splendorous city. The Saudi state gradually bought all American parts of Aramco until it got its total control in 1980 and renamed it Saudi Arabian Oil Company or Saudi Aramco, the name it still has nowadays.
But supporting Spanish dictator Franco in 1937 was among the first political positions of the oil clan. By that time –the Spanish civil war- Rieber’s oil tankers diverted their route with destiny to Belgium to support Franco’s actions of war opposing, even, the opinion of American president Roosevelt.
Roosevelt reacted violently to this violation of the neutrality law and threatened Rieber to present charges for “conspiracy”. However, he kept sending his aid to Spain via Italy for a total amount of six million dollars of that time which were to be paid through credits after the war.

This was fundamental for Franco’s victory and the continuation of his fascist regime after the defeat of his Nazi allies. But Rieber wanted more. He made contact with the main Nazi ringleaders and gave them Colombian oil which was taken to their tankers through a pipeline of 400 kilometers he had built at all costs.
Once the war was begun, the blockade imposed on Nazi Germany forced him to dock his tankers in neutral ports and negotiate directly with Goering a non-in-cash- payment in order to maintain his shipment. Goering agreed to pay with oil tankers but apart from oil demanded his diplomatic support. Thus, the president of Texaco became then Goering’s emissary to meet with Roosevelt and present him the “peace plan” aimed actually at disarming Great Britain and forcing it to yield to Germany arguing that, after all, it was about to capitulate.

In addition, Texaco financed the Nazis’ communication with American industrialists by having talks in the United States with Dr. Gerhardt Westrick, its official lawyer though in real life, he was the person in charge of dissuading American industrialists from providing military supplies to the United Kingdom. During this time, Niko Bensmann, the representative of Texaco in Germany and a high-ranking secret agent, was in charge of giving valuable documents to the Nazis about the American military production.
But the scandal came up and ruined everything when the head of the British secret services in New York, William Stephenson, revealed it all to the New York Herald Tribune on August 12, 1940. Businesses were ended and Rieber had to retire.

He returned to business two years later as President-General Director of South Carolina Shipbuilding and Dry Docks’ shipyards to supervise the construction of warships requested by the government and valued in more than 10 million dollars [3]. By that time and with the purpose of clearing its name, Texaco decided to be “charitable” and suddenly became a great patron and financed weekly radio retransmissions of the Metropolitan Opera, an activity it still does.
After WWII, Socal-Texaco Association did wonders, especially when the ‘center of oil gravity’ was moved for the first time to the Middle East and Roosevelt described the Saudi oil as a national strategic interest and planned the construction of a pipeline of 1 600 kilometers to transfer oil to the Mediterranean, something that would considerably reduce the transportation costs of those who exploited it.
Due to huge political obstacles the government could not do anything and finally, full of difficulties and depending on the Arab-Israeli conflict, the companies were the ones to build the pipeline from the Saudi deposits, going through Syria, up to the Lebanese port of Saida where the Mediterranean oil tankers carry their cargo. At the beginning of the 70s, half of the oil produced by Socal was extracted in Saudi Arabia and it produced about 8% of the world oil. Texaco, which apart from producing too in the Middle East produced more in the United States, had about 10% of the world production.

It was then that problems for Socal and Texaco appeared for they did not foresee OPEC’s potential growth, the Western countries’ demand boom and, lastly, the crisis provoked by OPEC’s decision of no longer consider the companies’ criteria to set the prices, apart from the subsequent rise as the result of the decision made by the Arab countries.
When the masters of oil – deprived of the control they had on the Middle East deposits and forced to guarantee a cheap supply to consumers- turned massively to the North Sea and the Gulf of Mexico, Socal and Texaco had difficulties to impose themselves in this race. Perhaps, this is the reason why they later decided to wildly divest countries such as Ecuador or Nigeria of their resources in an open insult to the well-being of their peoples and environment.

Criminal Activities Abroad

Apart from having stirred the civil war up widely by financing armed factions in return for sharing agreements, the two recently merged companies named Chevron-Texaco has forced people who don’t even have money to buy a bicycle to live in a real hell.
The “Chevron-Toxico” initiative that tries to denounce these actions has presented the situation in the following terms: “Imagine that you live with a pipeline that goes through your yard and your neighbors’. Imagine that at the end of this pipe, at less of 300 meters away from your house, there is a fire. A fire that reaches some 60 meters of height during 24 hours every single day of the week. Imagine that this fire has been there for 40 years.
Imagine that your children and your neighbors’ suffer from asthma because of it. Imagine that since that fire was lit you have seen more blind people, congenital malformations, skin diseases and cancer in your community. Imagine that the rain makes a hole in your roof. Imagine a deafening and constant noise, like that of a plane, coming from the fire. Imagine the smoke, the soot, the rotten smell of sulfur and that of other chemicals. Imagine yourself trying to plant vegetables in your garden watered by acid rain or trying to fish in the polluted rivers. Imagine yourself living with no nights. Now, think that on the other side of the world there are rich men making money – a lot of money- thanks to this fire”
.

Apart form being a waste, the burning of natural gas extracted with oil is far from being harmless and its collection is not economic, not for now. Thus, 20% of gas burning in the world is made in Nigeria where 75% of the extracted gas is burned whereas in the United States only 0.05% is burned.
Popular movements have protested against the impunity of oil companies in Nigeria and they have been mostly repressed in violent ways for Chevron-Texaco has not hesitated in transporting military men in its helicopters to open fire against pacific demonstrators [4].
Last year, in addition, the Nigerian regime decided to double the price of fossil fuels for the population which then turned to the woods to get the fuel to cook, thus accelerating deforestation.

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Between 1971 and 1992, Texaco started working in Ecuador in the exploitation of oil in the Eastern zone, located in the heart of the Northern virgin forest where numerous native groups lived, and in the construction of a Transandino pipeline. During the peak moments of its operations, it dumped 15 million liters of polluted water with heavy metals due to the extraction of oil in opencast excavations, estuaries and rivers.

More than 600 of these excavations drain to the aquifer and deprive populations of drinking water, not to mention the pollution of the soils. In some places, the cancer rate is 1000 times above the normal one [5]. The merger of Chevron (former Socal) and Texaco, announced in year 2000 and finally signed in 2001, has made it the fourth oil company of the world after Exxon-Mobil, BP-Amoco and Royal Dutch/Shell.

However, we must keep in mind that this classification is based on conservative figures declared by the companies and has nothing to do with the real technical data. Besides, all these companies should declare they have, at least, doubled their reserves by annexing the Iraqi deposits and increasing their shares proportionally. It can be stated that according to their annual reports they have gotten record profits that have been achieved thanks to the rise in oil prices.

Today’s Chevron-Texaco main installation outside Nigeria is located in Kazakhstan where during the 90s an ex member of its board of directors, Condoleezza Rice, was able to negotiate concessions with president Nazarbayev, an ex KGB, to maintain a favorable environment in negotiations thanks to her knowledge about the former USSR (sic). However, the profitability of these investments has been conditioned to the ideal exploitation of the Baku-Tblissi-Ceyhan pipeline in direct competition with the Russian systems [6].

Chevron Texaco Corp is chaired by David J. O’Reilly and in its board of directors are present people like Carla Anderson Hills, Bush father’s negotiator for the international trade liberalization, as well as former Senator San Nunn who controls the destiny of the Center for Strategic & International Studies (CSIS) [[“ CSIS, the oil crusader], a think tank [a usually political center for investigation, propaganda and the spreading of ideas. Translator Note] in which vice-president Cheney has a key role and has kept defending the invasion of Iraq.
The firm is also the most important private contributor to American political parties.

[1] “The Seven Sisters”, by Anthony Sampson, Bantam Books, 1976.

[2] To read a detailed history of the Standard Oil/Exxon-Mobil, see article: “Exxon-Mobil, fournisseur officiel de l’Empire” by Arthur Lepic, Voltaire, August 26, 2004.

[3] Trading With the Enemy, An Exposé of the Nazi-American Money Plot, 1933-1949, by Charles Higham, Delacorte Press.

[4] Regarding this theme, see also: “Shell, un pétrolier apatride”, (text in French), by Arthur Lepic, Voltaire, March 18, 2004.

[5] For more information about Texaco’s activities in Ecuador, see: “Ecuadorian natives sue Texaco”, by Sergio Caceres, Voltaire, November 8, 2003.

[6] More information about the BTC in: “The secrets of the coup d’état in Georgia, a former Soviet republic”, by Paul Labarique, Voltaire, March 21, 2005 and “Azerbaijan, an advanced colonial post”, by Arthur Lepic, Voltaire, March 21, 2005.

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