Oil had itself a day on Tuesday. Prices went negative as oil producers looked to pay people to take oil off their hands owing to an ongoing overproduction crisis.
But folks, U.S. President Donald Trump is on it. The president tweeted today that he’s putting the secretaries of the Energy Department and Treasury Department on a mission to “formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future.”
This is the purest form of malarkey. The oil and gas industry does not have a role “long into the future” in our climate-constrained world. And regardless, any funds to bail out the industry now”particularly the debt-riddled fracking industry”are nothing more than palliative care than a real plan. Now isn’t the time to bail out the oil and gas industry in the traditional, crony capitalist way. It’s the time to use public money in a way that benefits, well, the public and the planet (which, it should be noted, would benefit the public also by dint of continuing to exist).
I need to be clear that negative oil prices are bad in many regards. Bad for workers who will lose their jobs. Bad for the service economy in oil and gas towns that depend on said jobs. Bad for the planet since some folks”particularly the chongus in the White House”will see it as a signal to buy more oil since it’s cheap and commit money to prop the industry up. Not good!
A wise bailout shouldn’t focus on what was, which was a broken-arse system jerry-rigged together by hundreds of billions in loans and subsidies. All of this was undergird by the promise of future profitability that was a mirage even before negative oil prices.
Don’t take my word for it, though. Even some oil CEOs have come out saying what a terrible investment their companies have become. We should take them at face value, ignore the industry front groups, and not give a cent to oil and gas companies that want to return to business as usual.
We should also take all the signs that a new world is possible at face value. When stonks did their record plunge in March, it was the albeit with some caveats). Now, oil prices have kicked it wide open and busted it off the hinges.
Workers are likely to be hit hardest by the industry’s precipitous decline, and we know how that turns out without strong government intervention. Coal companies screwed workers once they started to go belly up. They’re trying to use the pandemic to weasel out of paying a tax meant to help miners with black lung while simultaneously hoovering up stimulus funds by hiring former administration officials to lobby for them (welcome back, scandal boy Scott Pruitt!).
Clearly this is not the road we want to go down. Data for Progress polling published on Tuesday shows broad support for a recovery agenda that puts people first (additional polling it published on Tuesday also shows 39 per cent of poll respondents support for nationalizing the fossil fuel industry). A recent report from the Next System and Oil Change International calls for a worker-first approach to any oil and gas bailout and lays out how to make it happen. The report also argues any bailout should actually be part of a plan to nationalise the industry, which again, look at how the coal industry has handled its decline if you need any other reason to consider it.
In addition to protecting workers’ livelihoods, there is also no shortage of oil and gas projects that don’t require digging it up fossil fuels. Canada, for example, has committed $US1.7 ($3) billion to help clean up orphan wells in Alberta, which has seen a similar huge decline in the price of tar sands-derived oil.
Putting aside how to help fossil fuel companies begin their managed declined, now is also the time to put money up for renewable energy. The industry has also been hit hard by the coronavirus pandemic even if it hasn’t been the subject of a presidential tweet and negative value. Also unlike oil and gas, it’s very much the future. A number of wise plans have been put out for how to keep it from stalling out in the face of the coronavirus.
The recently passed $US2 ($3) trillion stimulus, which includes minimal oversight measures the Trump administration is flaunting anyways, should be a warning of what could come with any oil and gas bailout. As the Next System and Oil Change International notes, a “no strings attached [bailout] would return our economy to a precarious status quo.” We know where that road leads, and it’s why we need to turn away from it now.