Writing on the Wall for Big Oil

2015 will be known as a watershed for the movement to advance beyond oil. With the world's leaders gathered in Paris in an unprecedented show of commitment to combat dangerous climate change, it is worth reviewing the many signs that the oil industry's self-generated myth—that we are stuck with its pollution—is crumbling.

Big Oil faces a growing coalition of forces—politicians, economics, and the public—aligning behind the recognition that the future must be driven by clean energy. We can no longer afford to go to the ends of the earth to extract every drop of oil and instead must accelerate the transition to clean energy that is already underway. Climate disruption is striking home, but so are the solutions, generating urgency for action as well as hope. Solar is no longer a future promise, our neighbors and schools are installing them at record place. Hybrid and electric vehicles are not science fiction, they're at the corner lot.

And it's clear as day that the only ones with a vested interest in holding back the progress we need are the fossil fuel giants whose business model depends on keeping the myth alive that fossil fuels must reign forever. It's an untenable position for the fate of our planet, and it's also one that is eroding at record pace.

The Myth of Perpetual Reliance

Big Oil needs the public and policymakers to accept its myth of perpetual reliance as fact.

That's why companies such as Exxon generously estimate that fossil fuels will still provide almost 80 percent of the United States' energy needs in 2040, ignoring that the International Energy Agency's scenario in which we hold average global warming below 2°C sees us meeting 40 percent of our energy needs with cleaner sources. It's why they continue to push for dangerous expansions of their reserves and infrastructure, in an attempt to expand their asset base while locking in future production far beyond what the science says we can sustain in order to avoid the worst impacts of climate change.

And it's the reason why Exxon and certain tar-sands moguls have spent tens of millions of dollars to cast doubt on the certainty of climate change.

But, as Charles Koch admitted last month, they're failing.

Changing Economics

Simply put, it is no longer tenable to base a business model on climate failure. And who should know better than the financial services sector whose job it is to project future economics and assess risk?

Banks have unanimously expressed concern about the impacts climate change will have on their profit and many have acted or pledged to help shepherd us towards a clean energy economy. CITI released a report in August in which they concluded that the global gross domestic product would lose $44 trillion if we don't act on climate change. The Governor of the Bank of England, who also serves as the Chair of the multinational and authoritative Financial Stability Board, said in a September speech that, "in the fullness of time, climate change will threaten financial resilience and longer-term prosperity," and "financing the de-carbonisation of our economy is a major opportunity for insurers as long-term investors." Further, several banks and other financial services institutions are phasing out fiscal support for the coal industry in recognition of the need to keep fossil fuels in the ground and the risk of stranded assets.

Clean Energy on the Rise

We've also proven that smart policies can turn the tide.

After decades of increasing, gasoline consumption has decreased 8 percent and the average efficiency of new U.S. automobiles is up 25 percent since 2005. We're going to double the gas mileage of the cars we drive between now and 2025 as a result of efficiency standards that have helped spur American ingenuity. And by continuing to advance efficiency and implement new transportation policies designed to reduce driving and accelerate electric vehicle sales, by 2035 the U.S. would save quantities of oil every year equivalent to what the Department of Interior estimates could ever be extracted from the Atlantic Outer Continental Shelf. Wind and solar projects supplied 57 percent of all new power generation capacity in the first part of 2015, and that proportion will continue to grow each year, making the clean transportation revolution more complete.

Bill Hughes/Flickr

People Power

The public continues to make clear its demand for clean energy by demonstrating against the expansion of oil projects destructive to the lands they touch and the global climate. Activists' uprisings, like the Kayaktivist movement, have spurred a growing wave of political action that will work to protect the resources endangered by Big Oil. It showed that we will eagerly contest new oil projects, wherever they are, for the sake of our planet.

Momentum began building in the Arctic this summer when Royal Dutch Shell announced that it would abandon its $7 billion dollar investment in the region "for the foreseeable future," fulfilling a multi-year public outcry at the grave risks to our climate and last pristine ocean from any Arctic drilling. The Obama administration then took the opportunity to refuse the renewal of existing leases in the Beaufort and Chukchi Seas and cancel lease sales planned through the end of the president's term.

Keeping our eyes to the north—our neighbors unambiguously rejected the Big Oil-bought policy platform of Canada's Conservative Party in a sweeping election. Not long after, the newly elected Prime Minister Trudeau made good on his promise of reform by effectively ending Enbridge's campaign to build the Northern Gate tar sands pipeline with a ban on crude oil tankers in British Columbia's north coast. Shortly thereafter, Canada embraced a strong climate policy with the announcement by tar sands producing province Alberta that it would place an emissions cap on tar sands production, phase out coal, entirely, by 2030, and institute a carbon tax—all evidence of the immense ripple effect caused by the Keystone rejection.

And then there was Keystone. The proposed pipeline would have profited Big Oil at the expense of landowners' property rights, the security of our country's precious soil and water resources, and a climate safe future. It was supposed to be rubber stamped. The climate community rallied. And earlier this month President Obama rejected it saying it "would not serve the national interest of the United States," and, "we're going to have to keep some fossil fuels in the ground."

Signs of the Times

Obama's call for fossil fuels to be left in the ground joined a chorus of political pioneers saying the same. Among them, Washington's Senator Merkley proposed a bill with Senators Barbara Boxer (D-CA), Ben Cardin (D-MD), Kirstin Gillibrand (D-NY), Patrick Leahy (D-VT), Bernie Sanders (I-VT), and Elizabeth Warren (D-MA) to stop the expansion of fossil fuel extraction on all federal lands and waters by ending new leasing and renewals of non-producing leases for oil, coal, and gas.

We are moving beyond oil. The public sees clean energy solutions work on a daily basis and know that it is the future. That reliance on oil is not a fact, but a myth constructed by the corporations that peddle it. This doesn't mean the fight is over. Big Oil and its clients will continue to spread misinformation and do everything in the power to lock-in more oil burning infrastructure and stymie political action. There Congressional allies will continue to launch efforts to stop progress and pass even more fossil fuel friendly legislation. Yet, the writing is on the wall and the path to a cleaner future is clear.

The question is whether our political leaders will muster the will to stay on that path and act quickly enough to avoid climate chaos.

About the Authors

Franz Matzner

Director of Federal Affairs, Center for Policy Advocacy

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