Orisun: TomDispatch.com
Gẹgẹ bi Donald Trump fun ni si awọn eletan that the transition process to the Biden years officially begin, the administration and its fossil-fuel allies doubled down on their efforts to implement destructive environmental policies that President Biden might try to reverse. Those initiatives have included a campaign to fo-bẹrẹ oil drilling in the pristine Arctic National Wildlife Refuge; the alakosile by the U.S. Army Corps of Engineers of the long-delayed Enbridge Line 3 tar sands pipeline in Minnesota; and a push by utility companies to obtain funding and permits for the construction of 235 gas-fired power plants, each with a 30-year life expectancy.
In response, horrified progressives have sought to titẹ the president-elect to appoint officials committed to blocking these and other similar projects. But the strategy of pressuring leading Democrats hasn’t worked particularly well for environmentalists in the past and doesn’t seem to be working now. Despite the movement’s full-court press for a real environmentalist presence in the administration, Biden designated Congressman Cedric Richmond as his “liaison” with that very movement. Richmond dibo ni ojurere of the Keystone XL pipeline and, among Democrats in the House, he was the fifth-largest recipient of fossil-fuel cash.
Fortunately, a more promising strategy for defeating new fossil-fuel projects has been quietly bearing fruit, even in the Trump era. Climate and Indigenous organizers have been attacking Big Energy companies and their investors, using economic pressure, boycotts, lawsuits, and disruptive direct-action tactics to impede drilling, interrupt the transportation of oil and gas, and choke off the flow of financing to, and insurance for, such projects. This multipronged strategy has been so surprisingly successful that the companies themselves — especially their sources of funding — have begun divesting from fossil-fuel extraction and infrastructure. As our desperately overheated planet continues setting records, understanding the largely unnoticed success of recent resistance movements is crucial if we hope to prevent total ecological collapse.
Why the Fossil-Fuel Industry Is Vulnerable, But the End of Fossil Fuels Isn’t Inevitable
The fossil-fuel industry and its champions in Congress laipe rojọ that financial institutions were “discriminating against America’s energy sector.” Specifically, banks were “folding to activist environmental groups’ pressure” by adopting “policies against investing in new oil and gas operations.” Trump’s Office of the Comptroller of the Currency (OCC) responded by trying to agbara Wall Street to fund drilling in the Arctic Refuge and undertake other new fossil-fuel initiatives.
Why have the banks suddenly become so unwilling to invest in a longtime favorite sector of theirs? One reason is that easy-to-access fossil fuels are getting scarcer. Ninu eyi era of “extreme” energy, companies have found themselves investing striking amounts of Wall Street capital (and wreaking environmental devastation) to find, extract, and transport hydrocarbon deposits from deep oceans, the Arctic, oil sands, and shale. At a time when oil prices were reliably above $80 per barrel, such projects were enormously profitable. But the fracking boom of the Obama years burst that bubble, with oil prices dropping as low as $40 per barrel by 2015 and remaining well under $80 during the first three years of the Trump administration. Meanwhile, renewable energy sources (especially wind) were growing cheaper by the month and siphoning off investment capital, further reducing the demand for carbon-based power.
The global spread of Covid-19 tanked energy demand, turning the drop in oil prices into a nosedive. The pandemic itself, the economic lockdowns, the lack of travel that went with them, and a Saudi-Russian price war drove oil to a calamitous low of $19 fun agba in April 2020. The result was widespread awọn onigbese among shale producers and weakening viability among major banks saddled with $ 300 bilionu in shaky hydrocarbon loans. To prevent further losses, those banks started to withhold funding for new projects, while oil companies kọ si isalẹ the value of their reserves, implicitly acknowledging that many of them may never be extracted. A number of experts are now asọtẹlẹ that the “fracking revolution” has entered a period of terminal decline.
This potentially dire situation helps explain the latest Trump initiatives. In order to lock in the next generation of major fossil-fuel projects, the industry’s partisans must convince the pataki epo ilé to borrow and invest the many billions of dollars needed to complete them. They must also convince or coerce increasingly reluctant bèbe to fund the projects and induce awọn alamọra to underwrite ventures that are enormously risky.
This is a daunting but not impossible undertaking. The history of capitalism is strewn with the carcasses of major industries that fell into terminal crisis and were overtaken by new competitors. When it came to manufacturing, water power was replaced by electric power, just as fossil-fueled transportation replaced horses. But history is also littered with industries that somehow survived the challenge of apparently superior substitutes. The nuclear power industry, for instance, has survived despite its monumental costs, poor performance, and the environmental catastrophes associated with it. The reason: the U.S. government invested vast resources in it, forced other institutions to do the same, and tẹmọlẹ political and economic resistance to it.
The same thing could happen with fossil fuels. The major carbon corporations wield so much power and remain so deeply embedded in the U.S. economy that they can call on governments for subsidies to keep them afloat, no matter the economic (let alone environmental) irrationality of continued fossil-fuel production. Trump’s gambit in the Arctic Refuge, like his entire energy policy, has been anchored by attempts to increase such subsidies and so prolong the fossil-fuel era. The industry giants are also using the current crisis to acquire bankrupt competitors at low prices and consolidate production into a ruling oligopoly. The survivors could emerge even more powerful and so potentially even more capable of demanding handouts from the public.
Why Fossil Fuels Might Be Defeated
Ironically, the Trump administration’s latest initiatives on behalf of fossil fuels also reveal how the industry can be defeated. Because investors are increasingly reluctant to fund troubled extraction and infrastructure projects, the industry has enlisted the U.S. government to force them to do so. The Arctic Refuge, a pristine wilderness area in Alaska where the Trump administration’s OCC and the industry have, absurdly enough, invoked anti-discrimination law (alleging discrimination against both fossil-fuel producers and Indigenous Alaskans) to try to compel the banks to invest, is the most obvious case of this.
Their desperation reflects just how effective the resistance to fossil-fuel projects has been in recent years. All across the U.S. and Canada, climate and Indigenous organizers have successfully raised the level of risk attached to such investments. The industry is highly vulnerable to delays in both drilling and the construction of the transportation infrastructure necessary to deliver oil and gas. Delays raise production costs, while creating long-term uncertainty about the competitiveness of fossil fuels. Green resistance movements have created a credible threat of chronic delays to and interruptions of such projects, leading major lenders to begin shifting from reluctance-to-invest to outright refusal.
The OCC’s efforts to strong-arm lenders are based on its recent finding “that some of the nation’s largest banks had duro doing business altogether with one or more major energy industry categories.” As Alaskan lawmakers put it grimly, the banks were increasingly “folding to activist environmental groups’ pressure.”
Why has that pressure worked? By obstructing drilling and the construction of infrastructure (especially pipelines and power plants), the green movement has added to the industry’s operating costs in increasingly bad times, while leaving investors fearing the risks now associated with those projects. In this way, it’s won victories, even in a moment when the Trump administration was aggressively promoting fossil fuels, when a far-right majority controlled the Supreme Court, and when most congressional Democrats were sitting on their hands.
The movement has applied four mutually reinforcing strategies that, together, have often succeeded in blocking or at least delaying such projects and, in doing so, have rendered them ever less viable.
First, resistance groups mounted disruptive protests at extraction sites and along the routes of proposed oil and natural gas pipelines. Actions against the Keystone XL and Dakota Access (DAPL) pipelines, led by Indigenous communities seeking to protect their lands from devastation, have been the most visible examples of this. In addition to forcing months of delays in construction, these on-site protests inspired a broader movement against fossil fuels and gave added impetus to demands for regulators, judges, and politicians to intervene.
Second, the movement targeted regulators in an effort to prevent or postpone the issuing of permits for the projects. Even during the Obama era, federal regulators had mostly acted as “rubber stamps” fun titun fosaili idana ise agbese. But the Standing Rock Sioux campaign against DAPL successfully pressured the Army Corps of Engineers to announce a new environmental review of the pipeline, delaying it until Trump took office.
Third, the movement has ẹsun ejo based on industry violations of the 1969 National Environmental Policy Act (NEPA) and other laws. Such suits often challenged the validity of permits already issued, which slowed down industry operations and provided the movement with an alternative choke point when regulators and politicians proved unresponsive.
Finally, it targeted the “money pipeline,” pressuring bèbe, awọn alamọra, and other large institutions to divest lati fossil fuels. Initially, this strategy was largely symbolic, but no longer. It’s now adding to the financial difficulties of Big Energy. Shell Oil Company, for instance, recently labeled the divestment movement a “material risk.” In the case of the Arctic Refuge, the movement’s pressure on Wall Street has made big loans harder to obtain and also led investment firms to put pressure on insurance companies to steer clear of projects there.
This four-pronged strategy has yielded many victories and now poses a credible threat to future fossil-fuel projects. In July 2020, for instance, the business media announced a cascade of ominous news affecting four important pipelines:
- A federal judge ruled that the DAPL permit was in violation of NEPA and ordered a time-consuming full environmental review. Though the pipeline had been successfully built in North Dakota despite much resistance, it is now at risk of being titilai titilai lonakona.
- An Indigenous landowners’ lawsuit arguing that a second North Dakota pipeline, Marathon Oil’s Tesoro High Plains line, illegally ti ṣẹ on their territory led the Bureau of Indian Affairs to order its closing after 67 years of operation.
- Ile-ẹjọ giga ti AMẸRIKA ṣe atilẹyin idajọ kan by a Montana district court judge that had stopped construction of the Keystone XL pipeline.
- Dominion Energy and Duke Energy pawonre their Atlantic Coast pipeline project “after years of delays and ballooning costs.”
In response to that last cancellation, Secretary of Energy Dan Brouillette rojọ that “the obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline.” His attitude reflected a growing exasperation among industry leaders who have recently pinnu the “rising tide of protests, litigation, and vandalism” against pipelines and warned that the movement is reaching a new “level of intensity” with “more opponents” who are “better organized.”
Indeed, the resistance has increased pessimism among industry executives and their investors. According to Bloomberg News, typically a gauge of Wall Street sentiments, the core big energy companies are ever more often concluding that “the mega-projects of the past are no longer feasible in the face of unprecedented opposition to fossil fuels and the infrastructure that supports them.”
A Tipping Point?
The July decisions on the two North Dakota pipelines were especially significant since they threatened already operating projects. As one former pipeline executive fi sii, this meant that even projects that successfully weathered a storm of protests and secured the necessary permits to operate remained vulnerable and might be shuttered long before repaying their immense debts. With that prospect, “I think it’s going to be incredibly difficult for anybody to invest in any kind of [fossil-fuel] infrastructure.” Echoing his view, North Dakota Governor Doug Burgum kilo that the DAPL ruling might be “a tipping point, which actually could really cripple production in North Dakota.”
Even if the industry ultimately wins some of its current battles, it might not be able to keep investors on board. The prospect that some future judicial decision could imperil their existing investments deprives them of “certainty from the government,” as one industry lobbying group kilo in March. This threat is compounded by the prospect that, in the Biden years to come, other parts of the government may finally begin taking action to stop climate destruction, which could leave fossil-fuel assets “ti idaamu. "
If the green movement can continue to disrupt the certainty that investing in oil fields and pipelines will return big profits, count on this: capitalists will begin to desert fossil fuels big time. Billionaire investment strategist Jeremy Grantham predicts a tipping point in the near future. He expects that investors will respond to the mounting threats to the fossil-fuel industry “very slowly” for a while and then “gbogbo ẹẹkan.” The point of resistance, then, is to increase the delays, closures, and disruptions that make fossil fuels a risky investment, therefore ensuring that the “all at once” tipping point arrives before humanity crosses the threshold of irreversible catastrophe.
What does all this mean for the current movement to win a Green New Deal? Electing pro-GND candidates has helped place it on the legislative agenda, but the movement must avoid the trap of investing all its energy and resources in electoral campaigns and lobbying. The Democratic Party leadership, including President-elect Biden, has ṣe yẹyẹ the Green New Deal and ṣe itself instead to a dangerous “all of the above” energy policy that includes plenty of oil, gas, and nuclear power. Even if Democrats were to win a Senate majority from the two January run-off elections in Georgia, Green New Deal legislation would remain a hard lift at best.
The environmental movement can, however, still move this country closer to a Green New Deal through the very same strategy that brought it victories during the Obama and Trump eras. By obstructing fossil-fuel projects at every turn, it can deprive the industry of the Wall Street investments it needs and lead private investors to view renewables, ever cheaper to produce, as a safer option. The government itself will be forced to invest in renewables in order to meet society’s energy needs and provide jobs to replace those lost when fossil-fuel projects are blocked, as the climate movement has long demanded. Direct resistance to fossil fuels is the shortest and surest path to a renewable energy transition. When you make the building of more pipelines and gas-powered plants so much harder, you also make the Green New Deal and a livable planet so much more possible.
Richard Lachmann is professor of sociology at the State University of New York, Albany, and author of First-Class Passengers on a Sinking Ship: Elite Politics and the Decline of Great Powers (Ẹya, 2020).
Michael Schwartz is distinguished teaching professor of sociology (emeritus) at the State University of New York, Stony Brook.
Kevin Young is associate professor of history at the University of Massachusetts, Amherst. Schwartz and Young are the co-authors, with Tarun Banerjee, of Awọn Levers ti Agbara: Bawo ni Awọn ofin 1% ati Kini 99% Le Ṣe Nipa Rẹ (Ẹya, 2020).
Nkan yii kọkọ farahan lori TomDispatch.com, oju opo wẹẹbu kan ti Institute Nation, eyiti o funni ni ṣiṣan duro ti awọn orisun omiiran, awọn iroyin, ati imọran lati ọdọ Tom Engelhardt, olootu igba pipẹ ni titẹjade, alabaṣiṣẹpọ-oludasile ti Project Empire Amẹrika, onkọwe ti Ipari Asa Iṣẹgun, gẹgẹ bi ti aramada, Awọn Ọjọ Ikẹhin ti Titẹjade. Iwe tuntun rẹ jẹ A Nation Unmade By War (Awọn iwe Haymarket).
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