This week marks the one year anniversary of the worst oil spill in U.S. history. On April 20, 2010, a blow-out at BP’s Macondo well killed eleven workers on Transocean’s Deepwater Horizon and led to months of uninterrupted oil flowing into the Gulf of Mexico, damaging ecosystems and livelihoods in ways we still don’t understand. Our friend and colleague Antonia Juhasz has a new book on the Gulf oil spill that just came out, Black Tide: The Devastating Impact of the Gulf Oil Spill, and you can hear her talk about it recently on Democracy Now.
With the anniversary upon us, and in the middle of the season when oil companies convene shareholders for their annual meetings, it seems like a good time to take stock of corporate obstacles to sustainable energy policy.
It is now clear that climate change is real and man-made (or, at least, man-accelerated), and that it will produce drastic and severe consequences for our future on the planet. Meanwhile, fossil fuel sources are running out and extraction of non-renewable resources is getting more dangerous. Deep-water drilling (still no technologies available to prevent blow-outs like BP’s), drilling in the arctic, hydro-fracking (massive injection of toxic chemicals and greenhouse gas releases), tar sands (possibly the most destructive energy extraction process)… the list of bad energy options the oil and gas industry presents goes on and on.
Aside: Check out these “Terribly Beautiful” aerial photographs of the by-products of non-renewable extractive industries.
Of course, even non-carbon energy alternatives have significant risks. Major dams like the planned Monte Belo in Brazil and the Xayaburi across the lower Mekong River in Laos will destroy vital ecosystems and impact the livelihoods and food security of millions of those living downstream. A study released by the Mekong River Commission late last year found that if a series of proposed dams were built on the Mekong mainstream, they would “fundamentally undermine the abundance, productivity and diversity of the Mekong fish resources,” affecting millions of people, and jeopardize farming operations, further threatening food supplies. And the world need not be reminded about the dangers of nuclear power, as the disaster in Japan continues to tragically unfold.
But given the alternatives, what choice is there? We must move from a fossil fuel, carbon-dependent energy base to a sustainable means of production, but the transition will take time and huge, coordinated investments from both the public and private sector, and in both developed and developing economies.
One major obstacle to a sensible energy policy is the consolidated power of corporations, which not only dictates counter-productive policies like farm subsidies for agro-business, tax credits for non-renewable energy projects, and skewed investment treaties, but also undermines basic democratic processes. Privileged corporate access to the policy arena short-circuits the voicing of a multitude of stakeholders’ opinions – the very process that, according to democratic theory, leads to the best outcomes for the greatest number. This top-down, corporatized polity, particularly in the energy industry, has dire consequences for people and the planet.
Companies’ incentives are by and large incompatible with the transformative energy policy we need. Stockholders demand quarterly gains, and executive compensation is tied to annual returns; investment in clean energy, by contrast, requires a long-term perspective. The oil companies have access to billions in profits from oil and gas right now, and have gone all-in on investment in highly polluting technologies. Why would a company like Chevron invest at high levels in less certain and less profitable clean technologies, risking a shareholder revolt and the replacement of its board and executives with new directors who understand the imperative of “drill baby, drill”? In fact, Chevron’s CEO John Watson argued recently that oil and gas were the future of American energy production and consumption, and Americans better get used to it. Thanks for the advice, John.
Energy companies pressure policy-makers to allow and reward them for destructive methods of energy production. They ensure that regulators don’t and can’t look too closely at practices like fracking and deep-water drilling, and dictate policy to those employed for their purposes in Congress like those designed to strip the Environmental Protection Agency of the power to regulate greenhouse gases.
Of course, sustainable energy can be a tough sell for the politicians and the public, too. In times when budgets are being slashed for education, elder care, and programs for the needy, how can we expect politicians, who famously prioritize holding on to their jobs (and answering to their wealthy donors), to advocate for investment in a sector for which benefits may not be seen until many years down the road? And, when gas costs four dollars a gallon and heating homes costs a fortune, the public is often focused on short-term fixes.
I believe the only way to achieve a sustainable energy transformation is through international coordination, combining market-based incentives and strict rules to force investments away from carbon-based sources of energy and into renewables. This must include substantial tax incentives and funding for investments in truly renewable, sustainable technologies, and massive taxes on carbon-based energy sources phased in over a realistic number of years to incentivize aggressive investments in what will be more profitable technologies in the long run, for companies and the planet. This investment must be more than marginal; we need a comprehensive, energy Marshall Plan that puts the full force of governments and industry behind the effort.
It’s time to force the energy industry to change their ways. They are simply not going to do it on their own, because it’s just not in their short-term financial interest. We need political leadership – not just in Washington, but in Brasilia, Delhi, Beijing, and Accra – that starts with voters and consumers demanding change and holding their elected officials accountable when they choose to answer to their highest donors instead of their constituents.