During the financial crisis in 2008, the federal government protected the economy by bailing out companies it considered “too big to fail.” Normally, the government protects the economy from companies that are too big to exist. Companies that prevent competition by dominating an industry are called monopolies. The Justice Department or Federal Trade Commission use federal anti-trust laws to break them up.
But what should the government do about companies that use deception to dominate a market to the detriment of the economy and the long-term welfare of the American people? What should it do when an industry repeatedly violates the public trust?
In other words, what shall we do about the oil industry? By covering up its knowledge that its products are destabilizing the climate, funding a denial campaign and pressuring Congress not to address global warming, big oil should have lost its social license to operate long ago.
Instead, it has used its influence and cash to sustain billions of dollars in annual taxpayer subsidies (nearly $6 trillion for fossil fuels in 2020) and cut-rate permits to extract oil and gas from public lands. For years, these practices suppressed the ability of clean substitutes like solar and wind energy to compete. More recently, the industry has opposed carbon pricing, which would correct market signals by better reflecting the actual social and environmental costs of carbon fuels.
The American people also underwrite the industry by sacrificing their health to air pollution, suffering through economic recessions triggered by spikes in oil prices and losing the services of degraded or destroyed ecosystems. Those “subsidies” cost more than $635 billion annually, according to the International Monetary Fund (IMF).
To discourage Congress from supporting President Biden’s climate-action agenda, the six biggest oil and gas companies spent nearly $120 million on 746 lobbyists last year, according to Taxpayers for Common Sense. As of April, they spent almost $50 million on campaign contributions to candidates in this year’s elections. To burnish their image despite, oil companies spent $10 million on Facebook ads in 2020. The five largest companies spent $36 billion to promote themselves from 1986 to 2015, peaking when Congress nearly passed a carbon-pricing bill in 2010.
The International Energy Agency says the world’s path to net-zero carbon by 2050 includes no new oil and gas fields or coal mines beyond those already committed last year. Nevertheless, the industry reportedly plans scores of new oil and gas projects that would push global carbon emissions beyond the limits of the Paris climate accord.
Clear and present damage
The U.S. Energy Information Administration says if current energy policies continue, fossil fuels will still dominate America’s energy mix in 2050, crude oil production will set records, and natural gas exports will drive the production of that fuel. The nation’s cost would be $2 trillion a year by 2100, according to the White House Office of Management and Budget (OMB). Climate-related weather disasters in the U.S. have already cost $765…
Read More: Why we must nationalize Big Oil