Published on August 17th, 2020 | by George Harvey0
Fossil Fuels Are So, So Screwed
August 17th, 2020 by George Harvey
After CleanTechnica posted the article, “The End Of Oil & Gas: A Different View,” a reader asked me a couple of questions: When did I think the end I described would come? Also, what did I think would happen before then?
A quick glance at the current political situation in the United States would seem to give the fossil fuels sector a possibility of a clear path to the future, as there is a chance that the current regime will stay in power. But that may be a delusion, with or without a political change.
In early 2015, Reuters reported an announcement by Freedom Partners that it would put $889 million into the election of 2016. I understood this organization to have about 300 very rich members, many of whom are heavily invested in fossil fuels. It seems the intention was for its chosen few to take control of both chambers of Congress and the White House. Its attempt to take over the government of the United States was clearly successful, at least for a time.
What we see in Washington today is the result. We have a president who is far more interested in the state of his own image than the state of the nation. The Senate is dominated by people who are more interested in toeing the party line than in upholding the Constitution. In a time when the biggest threats arguably are the real-world physical crises of Climate Change and COVID-19, science is being rejected in favor of the Gospel of Me-First with undue deference to Donald Trump’s pouting neediness.
The far right has been promoting both states’ rights and an unregulated market for years. But now, as the far right takes action, it is intentionally trying to override states’ rights and choose winners and losers in the market. Why? Because controlling the White House and Congress was still not sufficient to achieve their goals. And why is that? Because there is more going on than what happens among Washington’s elite.
There is another side of the story, and it will be heard in the end.
Fossil Fuels Are Going Down Hard
Imagine how leaders in fossil fuels see things. People who own businesses like them to grow. Flat sales are really bad. Reduced sales are anathema. But with climate change, the companies in the fossil fuel sector are being asked by environmentalists either to come up with new business plans or to accept permanent depression for the sector, leading to inevitable business failure.
Suppose you were a fossil fuel leader, and half the states in the US pass laws that you will have to reduce sales, in many cases to nothing, in the next thirty years. You will lose half your national sales, guaranteed.
Now, suppose that the counties, cities, and towns of half of the rest of the country tell you the same thing. You will lose half of the remaining sales. Your sales are going down 75%.
Now suppose new technology comes along that can do what you do better and cheaper. You start losing customers even in areas where you still have a free market. In some cases, longstanding big customers become new and important competition. Your sales are going down even more.
All that would mean a business decline of well over 6% per year, in a state of constant grinding depression, for thirty years. But it is not the end.
Consider science. The reality of climate change is more obvious every year, adding to your woes. And somehow, people become aware of the fact that medical bills will go down with less fossil fuel use, and farms will produce better without pollution. Ordinary people want you to fail.
And now suppose that Pope Francis, Patriarch Bartholomew, Archbishop Thabo Makgoba, Rabbi Arthur Waskow, the Dalai Lama, the International Islamic Climate Change Symposium, and a great passel of other religious leaders (including probably every shaman in North America) say that your business stinks.
When you have science, the market, and religion all against you, a purchased government is just one more stranded asset.
How much worse can it get? Now, just imagine that the Attorney General of New York, with help from a bunch AGs of other states, starts going through sixty years worth of your dirty laundry. And on top of that, there are rumblings that you might be guilty of crimes against humanity.
Time To Bail
The disruption to the fossil fuels industries is already well under way. Twelve years ago, we might have wondered when coal would be on its way out. The Dow Jones Coal Index hit its high of over 740 in 2008. Today, it is down 99.3%, to about 5! Trump did it no good. (Heh!)
The Dow Jones Oil & Gas Index rose to 846 in 2014, after six years with President Obama in the White House. Today, after Trump has spent over three years trying to undo Obama’s environmental work, it is at 315, down 62.8% from its high. (Again, heh!)
The oaf in the Oval Office is not doing his cronies any good. (Maybe that’s the reason Freedom Partners dissolved last year.)
So, all things considered, I think we can see two ways this country could go, depending on the outcome of the election.
If Joe Biden and Kamala Harris are elected, then maybe some sanity will be restored. Those fossil fuels companies that decide to go with the flow will be free to find new business plans, and with luck they will do it fast enough to position themselves to make a lot of money in only a very few years. Some are already looking at hydrogen, as Tina Casey pointed out in a recent CleanTechnica article. Heck, we might even start recovering from our losses in Trump’s trade war on China.
On the other hand, if Trump is re-elected and we continue with our burn, pillage, and rape approach to the environment, our losses will mount ever faster. With Trump’s indiscriminate destruction, businesses in all sectors would risk going down the tubes fast – unless they have invested in behind-the-meter solar and storage systems, and that includes fossil fuels. And it looks like some of them know it.
But then I don’t think Trump will win. He says he wants to defund the Post Office to prevent a fraudulent mail-in vote. And he is pushing his followers to ignore Covid-19 precautions. Interesting combination.
When Will Fossil Fuels Fail?
Three years after it was published, Steve Hanley’s CleanTechnica article on Tony Seba’s predictions is still worth reading. Seba believed the industry would decline rather rapidly after hitting a peak in 2020. And it looks like he might have been pretty close to correct, despite things that he could not have predicted.
Though my reasoning is a little different from his (and certainly not as deep), my view is very like Seba’s: Fossil fuels businesses are in a hopeless position, unless they undergo metamorphosis. I expect it will be a bumpy ride for a while, but I see nothing that could drive a recovery and all the things I have mentioned will continue to cause decline.
I think the terminal condition of fossil fuels is already in sight, and it will be clearly in sight for all but the most deluded within five years. I expect a final collapse will be under way within another five. Take that as before the end of 2030 and possibly well before that.
My only big worry (aside from Trump’s threat to the American democracy) is that the longer we take to get to dealing with the environment, the worse things will get.
Disclosure: I voted pretty much straight Republican from 1968 until 2004, when I realized that the Republican Party leadership was on paid leave of absence from rational thinking on science. I don’t disagree with the old Republican Party I once knew, just with the small minority that took it over and subverted it entirely to achieve its own un-American activities. I continue to support the environmental goals of people like Theodore Roosevelt, and Richard Nixon – including protecting federal land and supporting the E.P.A.
Photo: Lakeview No. 1 gusher. Unknown author, 1910. Public Domain. Wikimedia Commons.
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