This text was tailored from Power Weekly, a free e-newsletter concerning the clear vitality transition.
You may need seen fuel costs are type of excessive. What do you suppose we must always do about that?
One might broadly divide the varsity of ideas on what to do about excessive fuel costs into two camps: those who consider we must always cut back our demand for fossil fuels; and those who consider we must always shore up our provide.
In fact, it’s a spectrum, and plenty of recommend the answer is a stability between the 2. However the latter philosophy, the push to additional entrench the financial system in fossil fuels as an answer, is a head scratcher. At greatest, it’s kicking the can of the vitality transition down the street. At worst, it’s a strategic and calculated narrative honed by the oil trade to make sure earnings on the expense of geopolitical stability and a protected local weather future.
What is evident is that this second can be a catalyst for change. What that change seems like is dependent upon how a lot we let the oil trade form the narrative.
The fuel value blame recreation
Inevitably there can be finger pointing as to who we are able to hate, boycott or vote out of workplace due to excessive fuel costs. For instance, the rise of fuel costs is intently correlated to presidential job disapproval, regardless of the actual fact the president doesn’t have a lot or any management over the value of fuel.
So permit me to recommend a extra helpful focus of your ire: the oil trade. It is value remembering that as costs go up, it passes that value onto customers. Whereas persons are paying a report quantity, it is pulling in report earnings.
The oil trade can be on the forefront of initiatives and insurance policies to additional lock the financial system into fossil fuels. It is behind the push advocating for extra fossil gasoline infrastructure (which is able to take years) as an answer to a problem as we speak. The trade can be benefiting from larger costs, making bumper earnings for traders and pressuring the federal government to assist extra drilling.
If the oil trade weren’t actually killing us, I might should respect its ingenuity. The trade received billions in bailout cash initially of the pandemic, then made billions in earnings by maintaining manufacturing low and doling out dividends to shareholders.
All of that is making U.S. oil and fuel firms really feel superb about themselves. As one New York Occasions reporter put it, “The vibe [from the industry is], ‘You thought you had been accomplished with us, however as current occasions have proven, we’re nonetheless fairly vital.”
Don’t belief the oil trade mouthpieces
GOP leaders, who’re backed by oil pursuits and have lengthy supported the enlargement of oil and fuel, are utilizing this second to their benefit. They’re calling for Biden to reverse the cancellation of the Keystone XL pipeline, elevate limits on oil and fuel leasing on public lands and are pushing to export extra liquified pure fuel. “Drill Child Drill” swag is making its manner again to Capitol Hill.
We are able to’t let the long run be formed by companies profiteering from the crises from which we need to escape.
However the options involving additional funding into fossil gasoline infrastructure would do nothing to alleviate as we speak’s problem. And it will lock us into belongings that will require extra oil and fuel manufacturing and burning to be worthwhile.
It’s additionally unclear these measures would even work. After the Seventies vitality disaster, America spent a long time investing in oil and fuel extractions to insulate ourselves from the geopolitics of worldwide vitality. But as an alternative of liberating us, it has made oil and fuel firms earnings as they export sources to different markets.
As a clear vitality evangelist, I dream of a future the place nations aren’t beholden to the volatility of oil costs. However as we speak, the financial system continues to be very intertwined with the price of oil. Doubling down on that dependence to avert future crises is a stopgap measure that delays true vitality safety. It’s additionally at odds with a protected local weather future.
Bear in mind local weather change?
Is that this not simply my very own affirmation bias at play?
Let me put my playing cards on the desk. I do have a bias. A bias in the direction of the scientific consensus concerning the risks of local weather change. Whereas a measly petrostate autocrat can derail the geopolitical panorama, that won’t sluggish the unflinchingly inflexible bodily penalties of failing to decarbonize.
That’s to say, local weather change is not going to look forward to the battle to be over. Certainly, because the preventing intensifies, scientists sounding the local weather alarm are operating out of superlatives to sign the urgency of the state of affairs. The Intergovernmental Panel on Local weather Change launched a new report warning the disaster is accelerating sooner than we thought and humanity is nearing local weather adaptation limits.
If there’s a silver lining to the warfare in Ukraine, it could be its potential to spur ahead renewables globally. However to get that proper, we are able to’t let that future be formed by companies profiteering from the crises from which we need to escape.