OP-ED: Tax pollution, reduce emissions, help our energy veterans
Recently climate advocates had a very big day and oil companies had a very bad day. Dubbed “Black Wednesday,” in 24 hours, oil companies were given a healthy dose of reality from shareholders and a court of law.
According to the climate news organization Bloomberg Green: “Fresh from striking a hammer blow in the boardrooms of the world’s biggest oil companies, the climate movement has a clear message: the energy transition is happening and there’s no turning back. Just five years ago, environmental activists were limited to waving placards outside of annual meetings and to the odd shareholder proposal, inevitably rebuffed by the boards and management teams. On Wednesday by contrast, stock investors ousted two Exxon Mobil Corp. directors seen as insufficiently attuned to the threat of climate change, while Chevron Corp. shareholders voted for a proposal to compel the company to reduce pollution by its customers. Royal Dutch Shell was ordered to slash emissions harder and faster than planned by a Dutch court.”
Not only are oil companies being forced to reduce their emissions and become active in the fight against climate change, but they are also losing their biggest customers to electrification.
Recently General Motors announced they will no longer sell gas- and diesel-powered vehicles after 2035, joining at least six other car brands so far, including Volvo, Cadillac and Jaguar. The country’s biggest auto market, California, also announced they will no longer allow the sales of internal combustion engine vehicles after 2035.
According to the U.S. Energy Information Administration, 66% of petroleum consumed in the U.S. in 2020 went toward transportation. With America’s transportation fleet moving toward electrification, that’s a big chunk of change to lose for oil companies who are paying more and more to access harder-to-find new sources of oil.
If you think things are bad for the oil companies, the future of coal companies is even more dire. Last month, United Mine Workers of America President Cecil Roberts laid out an even bleaker picture of the coal industry. His industry went from employing 92,000 people in 2011 to just 44,100 by December of 2020. The rise of natural gas and renewables and mechanization, along with COVID-19, severely hamstrung jobs in the coal industry. Since 2012, more than 60 coal companies have filed for either Chapter 11 reorganization bankruptcy or Chapter 7 liquidation.
“The rise of renewable energy — windmills, solar panels, geothermal energy — is transforming the energy marketplace and the jobs that go with it,” said Roberts.
Even natural gas isn’t immune to the energy transition as the rise of renewables with battery storage threatens this industry.
From the Wall Street Journal: “Vistra Corp. owns 36 natural-gas power plants, one of America’s largest fleets. It doesn’t plan to buy or build any more. Instead, Vistra intends to invest more than $1 billion in solar farms and battery storage units in Texas and California as it tries to transform its business to survive in an electricity industry being reshaped by new technology. ‘I’m hellbent on not becoming the next Blockbuster Video,’ said Vistra Chief Executive Curt Morgan. ‘I’m not going to sit back and watch this legacy business dwindle and not participate.’”
The energy transition is happening fast, and that’s a good thing for our climate and for jobs in a rapidly growing sector of our economy. The fossil fuels industry is hurting, but we still need energy to fuel our electric vehicles, homes and manufacturing, and that means putting people to work.
But we shouldn’t lose sight of the people and communities who got us to this point. We need to help our energy veterans in the fossil fuels industry as they lose their livelihoods. As fossil fuel companies go bankrupt, communities lose important tax revenue that supports critical services like public schools and health services.
There is a way to help these energy veterans and their communities and reduce carbon emissions causing the planet to warm. Congress could put a steadily rising tax on fossil fuels at the source (the mine, wellhead or port of entry). That revenue could be used to help transition workers out of the fossil fuels industry. Workers could receive training and priority employment opportunities for clean energy jobs. Pensions and health benefits could be preserved.
Carbon pollution is negatively affecting people in many ways. Poor air quality is responsible for the deaths of as many as one person in 10 in this country. Coastal communities are now having to deal with the problem of sea level rise. Similarly, revenue could be used to help these frontline communities affected by carbon pollution and climate change. Revenue should also cover those who can least afford rising fossil fuel energy costs from a carbon tax by returning some of the revenue back to consumers in the form of a regular dividend check.
The fossil fuel industry faces the same challenge much of life on earth does with climate change, adapt or die. Change is coming whether we seek it or not, both in our planetary systems and our energy markets. Congress can take action to minimize disruption in both if they act swiftly and smartly.
— Jon Clark is Appalachia Regional Coordinator for Citizens’ Climate Lobby.