Oil Industry promoters want to pay Americans not to complain about global warming

Photo of oil derricks, Long Beach CA in 1937
Oil derricks, Long Beach CA in 1937. Image: Lib. Of Congress

Every national government in the world knows that burning fossil fuels is a practice that’s killing us. All 197 UNFCCC member countries have either signed or acceded to the Paris Agreement dealing with greenhouse gas emissions. Yet the production of oil and gas continues unabated. The following table shows the production from the largest producers: the U.S., Russia, and Saudi Arabia. The U.S. alone has increased its production by about 55% since 2008

U.S. EIA chart showing oil and gas production

Global warming is the disease. Stopping fossil fuel production is the cure. Reducing production might at least help the patient survive. So why haven’t the producers acted? Because no legislation exists anywhere to force them to act. Nor is such legislation likely to appear anytime soon; politicians the world over dance to the tune of the fossil fuel industry. In the few countries where setting a price on carbon emissions is being tried, the taxes are set too low for the effects to work back to the producers of the fuel.

The fossil fuel industry’s business model is similar to the one used by the drug trade: push the product; saturate the market; keep the users hooked. Direct or indirect political involvement is a given. The equivalent of the drug kingpins are the guys running or controlling the world’s Oil and Gas companies: Exxon, Gazprom, BP, Aramco, Shell, to name a few. The pushers are all the entities that stand to gain from the industry’s continued existence. They range from nation states and oil companies down to the industry’s bottom feeders: bought politicians; co-opted scientists; paid lobbyists; etc. A formidable array.

American Fossil fuel pushers are easy to spot because their statements are obviously pro industry. Sometimes their ideas sound reasonable at first reading. The Climate Leadership Council (CLC) is an example. Its proposal — called the Baker-Shultz Carbon Dividends Plan (aka: the Climate Consensus Solution) — is presented as a sort of prospectus in its 6 page website. The plan is heavy on promotion, light on specifics. Change a few words in it and the thing could pass as a sales pitch, complete with big-name endorsements, for Florida investment property.

According to its website, the CLC is “an international policy institute founded . . . to promote a carbon dividends framework as the most cost-effective, equitable and politically-viable climate solution.” Its plan, the website says, is backed by “3500+ economists, 27 Nobel laureates, all 4 former Fed Chairs, and 15 former Chairs of the Council of Economic Advisers.” 3500+ economists? That’s what it says. The following image identifies the CLC’s founding members.

Photo list of Climate Leadership Council founding members
Climate Leadership Council founding members. Image from CLC website

The CLC plan proposes that polluting industries pay a carbon tax on CO2 emissions, the money to be collected and given back to the American people in the form of dividend cheques. In exchange, the American people would have to agree to: the elimination of certain EPA emissions regulations; repeal of the clean power rule; and the introduction of a new law that would prohibit lawsuits of the sort that are currently plaguing fossil fuel producers. In other words, while the emitters of CO2 (all industries that burn fossil fuel) would pay a carbon tax, the producers of oil and gas, who refine but don’t burn much of the stuff themselves, would not have to pay much of the carbon tax. Instead, they would get to stick around producing more fossil fuel without having to worry about being sued for causing global warming.

Here’s how the creators of this ‘believe it or not’ scheme sum it all up:

“A sensible carbon tax might begin at $40 a ton and increase steadily over time, sending a powerful signal to businesses and consumers, while generating revenue to reward Americans for decreasing their collective carbon footprint.”

Let’s see how that might work: (1) Industry pays carbon taxes. (2) The tax money is collected and distributed to all Americans as a reward (for agreeing not to sue Oil and Gas companies?) (3) Industry raises its prices to recover the tax cost. (4) Americans use their reward money to cover the extra cost of the stuff they buy from industry. At what point in that Mobius Loop does a reduction in fossil fuel use take place? It doesn’t. The thing is a fantasy. But wait. Isn’t it true that carbon taxes work over time to limit the use of fossil fuels? Yes, but not when the taxing system is designed by fossil fuel pushers as is the case with this CLC plan. This plan is about convincing Americans to shut up about global warming so that the oil and gas companies can get on with the business of making money while the planet burns.

Among the CLC founding members shown in the image above, the five oil and gas companies are doubtless fully supportive of the CLC plan. As for the rest, who knows. My guess is that most of them don’t know exactly what they’ve lent their names to. The CLC pitch is misleading. The website prospectus mentions ‘carbon dividends’ 11 times and ‘climate solution’ 8 times. A dividend-generating Climate Solution sounds good. On the other hand, the words, oil, gas, fossil, or fuel, appear only once or not at all in the prospectus. Those are words that remind people of what causes global warming in the first place.

The Climate Leadership Council is headquartered in Washington DC at 1250 Connecticut Ave. NW.

1250 Connecticut Ave. NW, Washington DC
1250 Connecticut Ave. NW, Washington DC

New York v. ExxonMobil — the climate fraud case

Global warming — the rise in the atmosphere’s average temperature since pre-industrial times — forms the background to the State of New York v. the ExxonMobil Corporation lawsuit.

Chart of ice core data showing CO2 levels from year 1000 to1990’s
Ice core data showing CO2 levels from year 1000 to 1990’s. Image: CSIRO

Before 1800, the concentration of CO2 in the atmosphere fluctuated around 280 ppm (see chart above). The level of CO2 began its steep rise around 1800 due to the heavy use of coal during the industrial revolution. By the 1990’s, the continued burning of fossil fuels had  raised the CO2 level to 350 ppm. Today the level exceeds 411 ppm (NOAA-ESRL, March 2019).

CO2 in the atmosphere traps heat from the sun, a result of the greenhouse effect. As the level of CO2 increases, so does the atmospheric temperature. The Paris Climate Agreement set a goal of “holding the increase in the global average temperature to well below 2°C (3.6°F) above pre-industrial levels.” As of this date (March 2019), the average increase has already exceeded 1°C.

ExxonMobil does not deny that global warming is occurring. Nor does it deny that burning fossil fuels is the major cause of it. It is also fully aware of the various government actions being taken worldwide to limit the burning of fossil fuels. What the company is supposed to do is incorporate that knowledge into its financial statements so that investors can judge for themselves whether or not to risk their money. This requires that the company anticipate future government actions, such as, for example, the imposition of carbon taxes, and calculate their financial effects. What the lawsuit alleges is that the company lied to its investors about the potential impact of such actions. In other words, it deliberately underestimated the risks.

The New York Attorney General in her filing of October 24, 2018, against the company puts it more strongly. Exxon, the filing says, perpetrated a “longstanding fraudulent scheme … to deceive investors and the investment community … concerning the company’s management of the risks posed to its business by climate change.” Considering that the AG’s office spent three years investigating Exxon before charging it with fraud, you can bet that whatever the company is accused of doing, it won’t be easy to explain or prove in court.

Which of the parties involved in this lawsuit deserves support or sympathy? None of them. Not the investors. Not the Attorney General’s office. Certainly not ExxonMobil. Whether or not Exxon is found guilty of fraud, we know that it is guilty of pushing its product onto the market by any means it can get away with including: heavy lobbying of government; ladling out election financing to friendly politicians; feeding money to pro-industry organizations (propaganda outlets).

The internet provides investors with the same global warming information available to the Exxon Corporation. The risks of investing in the fossil fuel industry are plain to see. Signs of the industry’s slow but inevitable decline are already evident. Just how slow is anybody’s guess. Spreadsheets from corporate accountants will not aid in the guessing. The risk-free option is not to invest in the industry.

According to Bloomberg News (Oct. 24/18), the State of New York holds about $1.5 billion worth of Exxon stock. The investment includes “the state’s common retirement fund, with more than 1 million employees and retirees, and the New York State Teachers Retirement System, with nearly half a million members.” Considering that New York is a member of the U.S. Climate Alliance, and therefore supposedly committed to upholding the objectives of the 2015 Paris Agreement on limiting global warming, it strikes me as odd, hypocritical even, that the state retains its investment in a fossil fuel company, particularly one that’s being sued by its own Attorney General.

Some people say that the Trump administration’s opposition to the Paris Climate Accord, and its total support of the fossil fuel industry, should make it unnecessary for business, or the courts, or investors, to take global warming seriously. Those people are wrong. Dealing with the Trump Administration is like dealing with a monkey in a dining room leaping about spilling drinks, snatching food off plates, shitting on the table cloth. The prudent diner will wait until the monkey is removed before ordering a meal.

Gatehouse entrance to ExxonMobil headquarters, Irving TX
Gatehouse entrance to ExxonMobil headquarters, Irving TX. Image: Google

How to quit using fossil fuels the Hawaiian way

Just three days after President Trump announced his June 3, 2017 decision to withdraw from the Paris Climate Accord, Hawaii Governor David Ige signed a bill committing his state to the goals of the international agreement. On signing the document, Governor Ige said:

“We are the testing grounds. As an island state, we are especially aware of the limits of our natural environment. Tides are getting higher, biodiversity is shrinking, coral is bleaching, coastlines are eroding, weather is becoming more extreme. We must acknowledge these realities at home. That is why Hawaii is united in its political leadership on tackling climate change.”

Hawaii Governor David Ige
Hawaii Governor David Ige. Image: Twitter.com – @GovDavidIge

A year later, Governor Ige signed another environmental bill, this time committing his state to achieving carbon neutrality by 2045. According to the new law, by that year, 100% of the state’s electricity must be produced from renewables — photovoltaics, wind, geothermal, biofuels — completely displacing fossil fuels in the process.

The following figure provides a measure of the task ahead. Prior to 2008, less than 4% of the state’s electricity was generated from renewables. By 2017, that had grown to about 26%. Today, the percentage is around 30%.

Figure from Rhodium Group, April 19, 2019 report
Image from Rhodium Group, April 19, 2018 report

Some might think that the environmental actions of a small, isolated state (pop 1.4 mil) is of little account in the grand scheme of things. They’d be wrong. The work involves more than simply replacing old technology with PV panels and wind mills. Hawaii has six power grids, one for each of its larger islands. The current mix of renewable energy sources includes at least 60 utility-scale plants and 150,000+ residential rooftop solar systems, all with outputs that fluctuate depending on time of day, weather conditions, and other factors. How to integrate such diverse systems in a way that maintains grid stability (no overloads, brownouts, shutdowns) — that’s the real challenge. And the project is being watched closely by other states keen on cutting  their dependence on fossil fuels.

The key to success will depend on energy storage — batteries that can store energy when the systems are producing an excess, and return it when they are not producing enough. Judging by the rapid pace of solar development now taking place in Hawaii, that should not be a problem.

A Jan 3, 2019 news release from the utility Hawaiian Electric, says it has submitted contract proposals to the state’s Public Utilities Commission for seven grid-scale, solar-plus-storage projects on three islands. “The projects – three on Oahu, two on Maui and two on Hawaii Island – will add approximately 262 megawatts (MW) of solar energy with 1,048 megawatt-hours (MWh) of storage. The energy storage can provide four hours of electricity that can further reduce fossil fuel use during peak demand in the evening or at other times when the sun isn’t shining.”

Solar array, Poipu, Hawaii
Solar array, Poipu, Hawaii. Photo from Scientific American. Credit: Getty Images

The National Renewable Energy Laboratory (NREL) has been helping the Hawaiian Electric Companies respond to their grid stability issues. Commenting on the work (NREL News, April 24, 2018) Martha Symko-Davies, program manager for NREL’s Energy Systems Integration Facility said, “We’ve helped Hawaii integrate not just solar, but also storage, electric vehicle infrastructure, and more. If this can be done in Hawaii, it can be replicated anywhere else—the question is not ‘if’ we can do it, it’s ‘how’ we can do it. How do we apply the solutions we’ve helped implement in Hawaii and translate those solutions into ones that can work in other, mainland states?”

Map of Hawaiian Islanda
Hawaiian Islands – Image: Google Maps