Yves here. Notice that all these arguments about the primacy of the needs of fossil fuel industry needs versus, ultimately, the survival of civilization as we know it, boil down to “Because capitalism.”
By Dennis Meredith is the author of “The Climate Pandemic: How Climate Disruption Threatens Human Survival.” Originally published at Undark
ven as climate advocates call for eliminating fossil fuels, companies continue to launch major production plans. Earlier this year, for example, President Joe Biden’s administration approved the $8 billion Willow project on Alaska’s North Slope, which is expected to yield some 600 million barrels of oil over three decades. And last month, ExxonMobil announced a nearly $60 billion deal to acquire the oil producer Pioneer Natural Resources, which would allow it to more than double its production in the Permian Basin to 1.3 million barrels of oil and gas a day.
Hundreds of fossil fuel extraction projects now planned or already in production constitute so-called carbon bombs that hold the potential to emit more than a billion tons of carbon dioxide over their lifetimes, one analysis found. If these projects go forward, the researchers concluded, their emissions would be twice the limit that would keep global temperature increase to 1.5 degrees Celsius (2.7 degrees Fahrenheit). The United Nations Paris Agreement, ratified in 2015, seeks to hold the average global temperature increase to well below 2 C above preindustrial levels to minimize climate impacts, and advocates a 1.5 C increase as a major goal to avoid the most severe impacts.
Fossil fuel companies’ production levels render such temperature goals all but impossible to achieve. A report from the United Nations Environment Program and other groups concluded that in 2030, oil and gas production would total more than twice the amount projected to increase global temperatures by 1.5 C. By 2040, production would be almost three times that amount. Another study found that 40 percent of developed fossil fuel reserves must be left in the ground to give a 50-50 chance of staying below 1.5 C.
A critical component of climate advocates’ plans to limit oil and gas production is leaving in the ground, or stranding, large percentages of existing fossil fuel reserves. In 2015, A University College London study found that limiting heating to 2 C would require stranding a third of oil reserves, almost half of gas reserves, and more than 80 percent of coal reserves. In a 2021 update, a similar analysis found that meeting the Paris Agreement’s 1.5 C target would mean leaving in the ground nearly 60 percent of oil and gas and 90 percent of coal reserves by 2050.
However, these scenarios minimize or ignore the profound legal, political, and economic obstacles to such stranding.
For one thing, because such strandings would damage corporations, company directors who approved them would be left open to personal lawsuits for breaching their corporate fiduciary duty. Such duty legally requires directors to act in the best interest of the company.
Stranding resources could also be thwarted by legal claims from investors seeking compensation under international treaties. Countries offer such treaties to encourage foreign investment, and if they are violated, those investors can demand arbitration. An analysis by researchers at Boston University estimated that such arbitration could lead to government liabilities of up to $340 billion for oil and gas projects worldwide. Risks would be even greater if coal mining and fossil fuel infrastructure were included.
One group found that aggressive energy policies to limit warming to 2 C would mean that $1.4 trillion in existing projects would lose their value. The researchers traced the risk of ownership of more than 40,000 oil and gas assets. Private investors would suffer the most through their pension funds and investments, the study found.
Resource stranding would be a political disaster for any government, given the potential skyrocketing energy prices and enormous investor losses that would result. Witness how quickly and dramatically the Biden administration responded to the recent rise in gasoline prices by selling oil from the U.S. oil reserve to keep the price low.
Finally, advocates of resource stranding ignore the fact that fossil fuels are inseparably fundamental to the functioning of the world economy, and deep reductions in carbon emissions under current policies is not a realistic possibility.
Certainly, fossil fuel companies have resorted to underhanded tactics to undermine climate solutions. And certainly, they have made very large profits. However, to make significant progress toward those solutions, climate advocates must stop simplistically demonizing those companies and develop realistic strategies to overcome the legal and economic hurdles discussed here.
The strategies would include light-speed development of a renewable energy infrastructure, especially power grids that can support a massive increase in renewable production. They would include policies to produce huge growth in energy efficiency — an unfortunately unsexy solution compared to megascale wind turbines and vast solar arrays. And they would include aggressive campaigning to support politicians willing to advocate for the hellishly difficult policies — such as ending fossil fuel subsidies and levying a carbon tax — needed to meet the climate crisis.
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This seems a pretty silly article. All the concerns about the dear board members, etc. are policy matters that can be resolved with changes in the law.
A more serious concern revolves around the realities of refining. Refining a barrel of oil produces a range of products, some of which will remain essential for some time. If you try to reduce the consumption of gasoline, you will also have to reduce the use of diesel, kerosene, etc. in proportion in order to reduce the amount of oil refined. Otherwise, you’ll have to figure out what to do with excess gasoline.
Realities are crashing in on us quite rapidly. In the past couple of days, a podcast was posted of James Hansen and the team of scientists who put together a study to understand the especially rapid warming of air and water that occurred this summer. We put two things into the air with our carbon burning: CO2 which is an odorless, transparent gas; and aerosols which are particulates, often composed of sulfur. The former heats us up. The latter, working largely through cloud formation, prevents heating. Since we’ve been loading CO2 into the atmosphere, we’ve also been emitting these aerosols into the atmosphere, and these have been masking the heating potential of the CO2. Because aerosols are harmful to human health, we’ve been trying to reduce them, and now we’ve managed to significantly reduce the aerosols. Hurray for human health! The problem is that we’ve unleashed the full power of the CO2 already in the atmosphere, and things are getting hotter faster.
Hansen says 1.5 degrees C of warming is gone, out of reach. Hell, we’re going to be at 1.5 within this decade. Two degrees is approaching rapidly and could be attained only with a gargantuan effort to reduce carbon emissions to zero and remove carbon on a massive scale. He says that without a radical change we’re likely to exceed 4 degrees of warming. William Nordhaus will undoubtedly rejoice for the economy, but human extinction is a definite possibility at that level.
It’s so bad that Hansen is now advocating solar geoengineering as a temporary measure while we get carbon to zero (LOL) and crank up carbon removal efforts. Hansen approaches the latter as a cost issue when it’s really an energy issue that makes it impractical, but he sees no alternative.
With all due respect, your assertion of changes in the law doing the job are naive. If they are draconian enough to do the job, they could be (correctly!) depicted as eminent domain and the oil companies could demand being compensated for a de-facto seizure of their assets. The argument is that this would be tantamount to condemning a property. They would argue that the fact that the government did not take title was merely to shirk their duty to compensate the oil companies for the loss.
All very true. And the takings argument might take a constitutional amendment to change, but it could be changed by human beings in the normal course of politics. We can’t change, outside a very narrow range, what refining a barrel of oil produces. Nor can we change the relationship between warming and CO2 or the effects of reducing aerosols. That’s physics.
I guess that after watching the Hansen podcast, these concerns about board liabilities and governmental takings seems rather trivial to me considering the increasingly out-of-control nature of our dilemma. As you point out in the intro, this obsession with preserving capitalism and Business As Usual lies at the heart of this, and it is insanity.
To be clear, takings or eminent domain are PRECISELY about seizing private property for collective good. We could not get an Equal Rights Amendment in Peak Feminism (the 1970s). There’s enough money in the oil biz and enough blue states that like the income (jobs, construction) to be pretty sure to prevent the needed number of state ratifications.
Hold a revolution.
Shoot a few dozen billionaires, hang a few hundred politicians and you can get some drastic changes. The revolutions in France, Russia and China demonstrated this.
But once the bourgeois brakes were shot,
The coach hurtled on, towards a green Pol Pot.
And thus why my argument below makes sense. Shareholders don’t get stranded. Existing capital infrastructure doesn’t get stranded. The companies have the skill and scale to pull it off. It’s a win/win for all involved and the optics of opposing it would be dire.
I’d love to write a feature piece on it, but I have a 5-day civil jury trial coming up in two weeks. Any takers?
The charter of corporations is granted by governments, so the only solution to our current problems is for governments to, by amendments to their constitutions or by new laws, sunset the existing charters and require that corporations be recreated under new charters that require all stakeholders’ interests to be served, not merely the fiduciary interests of investors. That would mean not just obvious stakeholders like employees, customers and suppliers, but including the communities and regions that the corporations operate in, to prevent the corporate officers from externalizing harms to the environment without legal consequence.
Of course, since this will never happen while corporations in their present form own all the media, the more likely solution to the environmental problem, when it gets bad enough, will be limited nuclear war to reduce the world’s population and provide a decade or so in length cooling period as a climate reset. So sad that we’ll have to sacrifice LA, Omaha, Houston, Miami, New York, and Washington, DC.
Here’s an idea:
(1)Pay off the fossil fuel companies for the “stranded resources.”
(2) Add proviso that they don’t get the money if they continue to develop new resources.
(3) Add the proviso that the money will all be spent on renewable resource development and building out infrastructure.
(4) Problem solved.
We know today it’s all funny money anyway — we no longer accept the “balanced checkbook” sovereign currency accounting.
We can call it the “Preventing the End of Civilization As We Know It Bailout Act”
Totally open to naming suggestions though …
The “Last Ransom Act”.
The analogy would be with how slave power was bought put by the British government at abolition and they were set “free”.
But if we have have given up muscle power and fossil power, what next?
It’s been said before. Nationalize then.
Buy the stock at market value on the open market.
TINA – there is no alternative –
– as long as the economy runs on steel, concrete, plastic, and ammonia [made from air, for fertilizer] moved by fossil fueled vehicles.
A saying from Nate Hagens: You can run a civilization on renewable energy – just not this one.
Getting to the point where there ARE alternatives is a process that has begun, but the magnitude of what is required is not fully understood. Is carrying on business as usual by alternative means a real possibility? I guess in the decades to come the world will FIFA – f… around and find out.
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Exactly. Summed it up nicely, you can run a civilization on renewables, just not this one. All the greenies here, have they given up plastic for real? Or just those little plastic bags at supermarkets lol. It’s empty discourse, just that. Nobody challenged the commenter’s affirmation, if you refine a barrel of crude, you still need to produce gasoline if you want the rest.
I think that the oil companies have been stealing the ultimate eminent domain and need to compensate the inhabitants of that eminent domain called earth and it’s atmosphere that supports all life – just because one specie have decided that burning fossil fuels is more important than human life (human are consumers of oil) and that laws have been put in place that basically is set up as a protection racket – You got to pay us or you going to die type of laws – – then it’s up to humans to revise the laws and usurious economic system to benefit the domain instead of some corporations (another human invention) who practice and develop legal frameworks to keep the protection racket afloat
It’s the logic of addiction — even though the drug habit is wrecking our lives, hurting our loved ones, driving us into ecological bankruptcy, threatening our future — we can’t give up shooting dope because the withdrawal symptoms will be so unbearably painful! Plus, we need to consider the drug pushers and their pals in government — of course, we can’t let them go belly up! Like us, they’re just victims of the system, trapped by its inexorable mechanisms. And, after all, their product makes the world go ’round and feels SO good — even if it’s killing us and the planet’s living things. And just forget about cutting down — boh-ringgg! — remember the hippie “back-to-the-land” movement? How’d that work out? Nobody’s gonna go for that Malthusian “degrowth” talk, anymore…. So no, we’re not going to do anything about our looming ecological catastrophe. As the 12-Step groups say, the addict’s got to hit bottom before he’ll change. Only then, can we recognize that your lives have become unmanageable.
So, to follow Yves’ relegation of the problem to the courts, the recovered addicts’ solution could be to follow model of opiates in the courts, and sue the oil companies for the destruction of the planet. It’s well-known the companies’ own scientists have known with modern day precision that that they were on a curse to rapidly destroy the planet.
How long can the US Supreme Court exploit the loophole that climate change was never once mentioned by the Founding Fathers?
Great idea. Let’s do the MICC too!
Wasn’t there just a lawsuit from a group of younger people based on this idea? I recall it was thrown out of court…
No action will be taken until catastrophe strikes and then only reluctantly and likely not even then: Because inertia. Because profits.
The property rights of corporations or any other entity will matter little when it becomes a matter of survival.
It’s just not that. People especially in the West like their comfy lifestyle. What have you, for example, given up? Do you drive a car, take a plane on vacations, get food delivery, use plastic like nuts, have a bloody oil-based roof on your head, and all that insulation in your home, everything made of chemicals AKA oil? Be honest here, I don’t see you Thoreau-ing in a forest…
Sure, oil and (nat) gas producers have an interest in perpetuating the status quo, but I don’t think that is the whole story. We have indeed built a system tailored to fossil fuels and it is very hard to get out of. The article mentions grids and power production, but not how to credibly decarbonise transport. So long as transport requires gas or diesel, fossil fuel production is needed. We have just taken a look across the EV and hybrid market and concluded that ranges are very flexible concepts, especially if you need to drive long distances in winter (we hardly do short distance/city trips by car). So we’ll probably end up with a hybrid, also due to numerous discussions here on NC on the most efficient use of batteries, h/t all round.
Btw, the first “E” in the first word (“Even”) is missing. Looking at the lay out of the original I totally see why..
Mass public transport is the only answer IMO but most Americans won’t want to give up their cars and ride a bus or a train.
Because our cities are not built for that, and it requires enormous amounts of money to do that. It also requires a change in lifestyle, you will need to live closer to the job, jobs will need tohe more spread out and not concentrated like they are now, etc. It’s stupid to just blame people for not wanting to change. For starters, let’s stop siphoning money to foreign lands and build up that infrastructure here. I for one live in a major big city that has absolutely no public transport. You’re dead if you don’t own a car here. And I own a small sedan, but all my greenie friends own a big SUV or a truck lol. Go figure huh, the hypocrisy.
My diesel work van fuel pump, injector pumps etc sh*t the bed. Spendy repair. Talk about a stranded asset, or an asset going from 65 to zero in five sad seconds?!
Anyway, my work requires a reliable car, and I will never be in a position to retire. And my work will not see telecommuting as a viable option in my lifetime.
I am truly in a form of existential stall… the morality of my Next Car.
No car at all— ideal, but my debt and taxes and non extravagant life still demand a baseline predicated on a vehicle-centric income.
Hybrid or e-car… second-best, but realistically a non-starter in the rural west.
So a fuel efficient I C E vehicle, used, hopefully reliable… think Toyota or Honda.
And my plight is just an example of that of the teeming masses of the 8 Billions. Look at the complex systems a modern human life demands… whether in Moscow, Dubai, Bozeman, LA, Miami, Rio, Hong Kong….
Just observing late Friday PM activity at any major intersection in any town anywhere…I cannot come up with any other conclusion that we are well and truly phuct as a species– it will be a long slow painful fraught denouement. And it goes way beyond transportation- we eat oil.
We are so vulnerable and have not made any significant acknowledgement of that fact, nor any collective vision of what a sustainable alternative looks like. It would be colossal, and would entail many in power and of wealth to share and strand… potentially everything.
Covid gave us a moment to examine what it’s all about, hearing bird-song, seeing clean air, not hearing vehicle noise for a few precious weeks… re-orienting economies, work, remuneration, debt service, determining what is esential and sharing that— it was our Come to Jesus moment, Woke Up!! and we seemed to say, We Need To Return To Normal!
Great article, I have to head to my second job so I can afford my added car payment.
Trying to refuse to go Nihilist.
Unfortunately, nihilism is a stage that you have to go through. Only after you have sat with the nihilist tendency will you have the “blank slate” in order to build a new vision upon.
A large psychological problem I repeatedly encounter is that people cannot fathom that we are committing species suicide. They fight against putting on the They Live glasses. Only after seeing our truly hopeless state with wide eyes will we have the gall to fight for something different.
In a logical world, the price of oil should be gradually rising to create pressure to change how we use it and what we can replace it with. In fact, the higher prices could be used to do research on new technology and funding the shift for ordinary people by modifying their homes to be vastly more efficient. Oil derivatives like plastics should be radically cut back on until we are at the same level of usage that we had back in the 50s. You reckon that we can’t afford to do this? Brother, wait till you see the bill if we do nothing which to a large extent is just what we are doing. Politicians love low oil prices to make themselves popular and get re-elected. The one time there was a US Prez that tried to level with the people about this, he was quickly replaced with a guy that promised “It’s morning again in America.”
Increasingly the only outcome appears to be genocidal resource wars of extinction.
I don’t want to be around for that.
“For one thing, because such standings would damage corporations, company directors who approved them would be left open to personal lawsuits for breaching their corporate fiduciary duty. Such duty legally requires directors to act in the best interest of the company.”
It seems to me that the best interests of a company, of all companies, would lie in the survival of our species on this planet. How can anyone argue that the “best interests of a company” are achieved by cutting off the branch that we’re all sitting on?
Of course, the laws and arguments based on them are not a joke but they certainly exist primarily to maintain the status quo for a wealthy elite. Unfortunately, I would say that the status quo they want to maintain is suicide for humanity as a whole. Are such legal arguments not based on hot air? Does it make any difference if they are? I would argue that it is an insane contradiction.
I see another reason nations are unlikely to voluntarily leave fossil fuels in the ground: War.
A military run off of fossil fuels seems to me to have some decent advantages over one run off of renewables. And all else being equal, industry run off of fossil fuels will, at least at present, produce goods at a lower cost than industry powered by renewables. And even in situations where fossil fuel reserves belong to a government and not corpirations and the government can see what the exploitation of those reserves would contribute to global greenhouse gas emissions we still have the same issue: Namely that the benefits of using fossil fuels are local while the costs are shared globally.
Any society which successfully transitioned away from fossil fuels would set themselves up to lose the “great game” and ultimately have their policies dictated from abroad. Granted, this is what every empire has imposed on its subjects but the fact that it is happening and had happened before doesn’t make it a desirable outcome for any player.
I admit, in spite of the uncertainties and downsides inherent in geoengineering I don’t see a better option. As other commenters have mentioned we are addicted to fossil fuels and I find it hard to imagine us stopping before our stash runs out or we hit rock bottom.
At this point I am simply hoping that when we do start to run out of fossil fuels we can geoengineer enough to prevent extinction. Wishful thinking, perhaps. Or perhaps I underestimate the capacity of my fellow humans to voluntarily abstain from dinosaur juice. Still, refusing to geoengineer because it will enable the bad guys and cause untold changes to our earth seems like an idealistic indulgence we might not be able to afford.
Yeah i think a major driver for adopting oil for fuel was the Royal Navy doing so between the world wars.
China and India certainly won’t ignore it.
None of this will matter in the least when the Time of No Food is upon us.
This time is rapidly approaching, and will surprise the hell out of everyone. I live in Canada, where the effects of climate change appear before anywhere south of the U.S. border. The drought this summer across the entire northern tier of the planet caused more and worse fires than ever seen before. There is no grass for the cattle, very little grain for feed. Water restrictions were so severe that the town near me had to let $3,000,000 worth of urban trees die, as reported by city council. British Columbia and Quebec will burn to the ground. No two-by-fours for you, NAFTA or no NAFTA.
The restrictions on our rural river-based water system were so onerous because of low flow that five of our neighbours had wells drilled this summer so they could have water for their homes, animals, pastures and haylands. Imagine what that is doing to our aquifer. Another couple of years of this and there won’t be any water, river or well, that will be able to support our rural area. No one will truck water to us, and it would be too expensive anyway. Two years ago the fires came within 10km of our house. We had to wear masks all summer long, even to go outside with the dog. Next year? Who knows? If we had a fire here that somehow missed the house, the steep foothills behind the house would be bare, and the first rain would cause a landslide that would take out all fifteen houses that sit in a row at the bottom.
The end is in sight. Try to enjoy the time you have left. I’m 75 years old and I’m sure I’ll live to see it all come tumbling down.
Ohh . . . I don’t know . . . . I think we have already had some climachange effects here south of the border.
Bigger better fires all over the West, new and improved droughts in various parts of various agri-belts, Harvey-quality raindump waterbomb events, etc.
Lack of the traditional winter frosts allowing the Asian Tiger Termite to survive the winter in-around New Orleans and vicinity, slowly killing the iconic live oaks one big limb at a time . . .
On the other hand, those resources would be stranded, as the food supply chain suffers, and potentially collapses from changes in climate that are already occurring. A world wide economic crash may perhaps be the only way to avoid the “capitalism” jeopardy.
Geo-engineering, with all its attendant risks, is the only way out. Even if the U.S. miraculously found a political solution and curbed fossil fuels, the chances of this happening in Asia are less than zero. Moreover, Americans love high-tech magic, so we will end up tinkering with the atmosphere to cool the planet. Plan on buying arctic gear for your grandchildren.
Freezing because tinkering goes wrong? The entertainment industry seems to have already inoculated a mass audience with the idea back in 1994.
https://variety.com/2022/tv/features/dinosaurs-ending-explained-1235354087/
We do not have to accept such a narrow minded view of “best interests”.
Nobody profits from vandalism. Not the vandals nor the victims.
The obvious perfectly legal way to create stranding is pigovian taxes on fossil fuels. The “problem” of excess gasoline is not a problem; because chemical research can easily use an extremely low-entropy substance like gasoline as an alternative to natural gas as a feedstock for plastic monomers.
Plastic is one of the problems, not a solution.
I always have always found that “simplistically demonizing” large multinational corporations is a pretty useful heuristic…