2020 has been a grim year for the fossil fuel industry: First a Russia-Saudi price war, then a worldwide collapse in demand due to the COVID pandemic that even briefly took the price of crude into negative territory. The industry has slashed tens of thousands of jobs, while trying to muscle its way into the federal government’s economic rescue packages.
So what does the future hold? If history is any guide, one path is clear: the biggest companies will get even bigger, a scenario with disastrous consequences for addressing the climate catastrophe.
We must create a more livable alternative. We can start by banning fracking.
While COVID has wreaked havoc on virtually every sector of the economy, the fossil fuel industry was in trouble even before the pandemic hit. Wall Street investors financed the fracking boom based on a fairy tale that oil prices would remain high, and demand would grow in perpetuity. For a short while it seemed to work; investors saw record profits in the oil and gas industry, with a massive expansion of pipelines, gas power plants, petrochemical refining and export facilities.
But the fracking industry misled investors at every step of the way, exaggerating the returns they expected to generate, and even flipping fracking leases over and over again. Their day of reckoning hit with sudden fury. While the gas industry had already created a glut, the combination of that oversupply and declining demand brought the crisis that took prices into the negative: Too much oil, nowhere to store it, and no one to buy it.
While the market may eventually “correct” itself, the future is dim; there’s no way to profit from fracking new wells when prices are this low, and Wall Street has finally turned off the credit spigot.
Some oil and gas interests are clamoring for bailouts, and Donald TrumpDonald John TrumpTrump says he will ban TikTok from operating in the US Trump’s 2019 financial disclosure reveals revenue at Mar-a-Lago, other major clubs Treasury to conduct policy review of tax-exempt status for universities after Trump tweets MORE even famously tweeted a promise to help. But the most powerful fossil fuel companies are saying publicly that they are not interested in participating in any such program. While we are still trying to unravel which companies are taking advantage of various COVID relief funds, we know what the big players have in mind — massive consolidation. The companies that can survive this bust will do as they always do: Buy up the little guys who are going under, at pennies on the dollar, to eliminate the competition.
A more tightly-controlled, politically powerful fossil fuel industry would be disastrous. These mega-corporations have manipulated the political process to their benefit, and have funded the anti-scientific climate denial movement to delay action to stop climate catastrophe.
Are there any alternatives to that outcome? As much as we need to get off fossil fuels, an abrupt collapse of this industry would be awful for working people. Over 100,000 industry fossil fuel jobs have been eliminated since March, and that number could still be pushed even higher. The industry’s abrupt decline has other effects as well; many states derive significant tax revenue from fracking for oil and gas, so now lawmakers are poised to slash spending on vital social programs right when families and communities need them more than ever.
This is a moment that requires real political leadership. Dozens of lawmakers stood together to oppose any plan to bailout the oil and gas industry in response to the pandemic. The real solution is to eliminate the source of all of this anguish by passing the Fracking Ban Act, the first federal legislation that tackles the problem head on. This landmark bill immediately halts all new permits for fracking and fracking infrastructure, and bans fracking nationwide by 2025. This gives us the time to plan a fair and just transition for fossil fuel workers, and will vastly expand the workforce in renewables and energy efficiency.
We must emerge from the COVID crisis with a bold strategy to head off the global climate catastrophe. That means stopping new sources of carbon pollution, and launching a concerted clean energy program that will create the kind of world we want to live in right now, while leaving an admirable legacy for future generations.
Representative Darren SotoDarren Michael SotoHispanic Caucus requests meeting with private detention center CEOs Florida lawmakers press Interior on offshore drilling Activists, analysts demand Congress consider immigrants in coronavirus package MORE (D-Fl.) represents Florida’s 9th District in Congress. Wenonah Hauter is the executive director of Food & Water Action, the first national group to publicly call for a ban on fracking.