The Dictator Penalty

Chevron's $30 million settlement Thursday of charges involving illegal kickbacks to Saddam Hussein's government in 2001-2002 won't be much of a ding to its bottom line. It's more a reminder of the "dictator penalty" in Big Oil's dealings with the world's worst governments. There may also be criminal charges to come against Chevron in the Iraq case, which occurred during the old Axis of Evil days.

The Iraq settlement is, however, dwarfed by Chevron's other potential liabilities, including:

Ecuador: A $6 billion lawsuit over the environmental ravages of Texaco, now part of Chevron, in the Ecuadoran Amazon.

Nigeria: The company faces a continuing lawsuit charging human rights violations against opponents in the oil-producing Niger Delta. There, a stew of oil money and corruption is to blame for widespread social disintegration and violence.

Myanmar: Chevron refuses to withdraw from its partial ownership of natural gas fields and pipelines in the former Burma. Gas money supports one of the world's harshest juntas--one that doesn't flinch at killing Buddhist monks or any other protesters (or journalists) daring to appear in the streets.

Kazakhstan: Chevron boasts of being "Kazakhstan's largest private oil producer." Political opposition leaders, suppressed and often jailed by President-since-1991 Nursultan Nazarbaev, charge that his corrupt regime is supported not just by direct oil income but by huge illegal kickbacks. In 2005, after elections in which the main opposition party was banned outright, Chevron pledged $3 billion in new investment for a fivefold boost in the nation's crude oil production.

Russia: Chevron's interest in buying the disputed assets of the Russian oil company Yukos prompted a letter of alarm by California Controller John Chiang, who found it such a risky, tainted investment that he asked the state retirement fund to monitor its large investments in Chevron.

Chevron is far from alone in cozying up to corrupt, undemocratic governments. But the settlement of the Iraq charges offers a snapshot of how oil companies in these countries end up acting against the interests of indigenous citizens and in opposition to U.S. interests. It's all to the detriment of America's place in the world.

Some may recall that Chevron also spent over $40 million on phony arguments to defeat last year's ballot initiative (Proposition 87) to fund renewable energy development in California.

As a business model, being No. 1 in Kazakhstan or king of the powder keg in Nigeria has more long-term drawbacks than the uncertainties of biofuels. Oil companies, still awash in cash, can afford to make some new mistakes in commercially developing renewables, a down payment on a future where shame doesn't come with the territory.