With commuters staying at home, businesses shut down, and airplanes grounded, the coronavirus lockdown is catalyzing the biggest decline of energy demand in history. As the dire impact of the oil glut produced by the pandemic on the fossil fuel industry has become increasingly clear, elites have begun to worry that the gathering crisis of fossil capitalism is likely to seriously destabilize the global financial system. They are responding with demands for public bailouts that benefit Big Oil. Yet while periods of crisis have often led to paroxysms of disaster capitalism in the past, opportunities are opening in this present moment of disastrous capitalism for movements fighting to dismantle the fossil fuel industry and thereby prevent planetary ecocide. With the value of fossil fuel companies gutted, now is the perfect time for what I am calling a movement for People’s Power to take ownership of the collapsing industry in order to shut it down in a way that’s fair to workers and communities, and in parallel to build out the kind of democratically controlled renewable energy system we need to avoid catastrophic climate change.
“We haven’t seen a demand event like this in history,” Saad Rahim, chief economist at oil trading giant Trafigura Group, recently said. Coming in tandem with a price war between Saudi Arabia and Russia that has seen oil prices plummet to $20 a barrel, the massive oversupply of fossil fuels spurred by the vertiginous drop in energy demand is generating an industry-transforming rout. Particularly imperiled is the US fracking industry, which now represents roughly 70 percent of US oil and gas production. Heavily indebted corporations like Chesapeake Energy and Whiting Petroleum are likely to declare bankruptcy in the coming weeks and months. As energy analyst Clark Williams-Derry put it, “It’s a financial blood bath.” Even the plan to purchase 77 million barrels of oil for the Strategic Petroleum Reserve that Republicans tried to insert in the $2 trillion stimulus package in late March is only a drop in the bucket given the scale of the collapse. The deal reached by OPEC+ to cut roughly 10 percent of global oil production is historic but not nearly enough given the size of the drop-off in demand. The situation is so dire that some drillers are lobbying the Texas state government to ration the production of oil, a measure not in place since the Great Depression.
From an environmental perspective, crashing consumption of fossil fuels is undeniably a good thing. After all, we must leave the majority of known fossil fuel reserves in the ground in order to avoid catastrophic levels of global warming. Since it is responsible for the preponderance of contemporary carbon emissions, shutting down fossil capitalism must be the paramount goal of climate activists.
But the crisis of the oil industry is no cause for unalloyed celebration. The coming wave of bankruptcies may be a boon to mayor oil companies, who, as Adam Hanieh suggests, will be able to snap up smaller competitors at rock-bottom prices, intensifying monopoly tendencies within the industry. In addition, plummeting demand for energy is already destroying the value of the renewable energy industry. With oil prices so low, the pressure to invest in alternative fuels is off. Once quarantines are lifted, cheap oil and gas prices may bring energy consumption roaring back while leaving renewable energy crippled. And with a revival of its economic fortunes, Big Oil is also likely to return to its longstanding policy of obstructing the transition to a zero-carbon economy.
Moreover, if the pandemic lockdown is slashing fossil fuel consumption, it is doing so by unleashing an economic tsunami that will destroy tens of thousands of jobs in the US. While Big Oil CEOs and stockholders pressure their political minions for lucrative bail outs, the obliteration of many fracking companies is likely to have devastating consequences for workers and communities whose livelihood is tied to fossil fuels.
And it’s not just oil workers who face an increasingly precarious future: as Hanieh suggests, the wave of oil industry defaults could destabilize other parts of the financial system, including the many pension funds, insurance companies, and banks that hold huge quantities of energy debt. The crisis of fossil capital comes on top of a surging wave of mass bankruptcies as the broader corporate debt bubble bursts. Add to this the seizing up of the consumption-based US economy, which now has over 22 million officially unemployed workers. We are looking at a truly epic capitalist crisis.
How we emerge from the present crisis of fossil capitalism will depend on the power of the stories we tell about alternative political possibilities, as well as the creativity and tenacity of social movement organizing. Coronavirus has laid bare the crumbling state of public infrastructure in the world’s advanced economies, and is shining a harsh spotlight on the savage inequalities that have resulted from decades of public asset-stripping by elites. Campaigns for People’s Power can take advantage of rising public anger at what has been called the American death cult of neoliberal capitalism.
In recent months energy democracy activists have successfully fought the profit-seeking imperatives of investor-owned utilities, private corporations that have the power to determine who lives and who dies under today’s lockdown conditions. In the best of times, these utilities – which provide electricity to 72 percent of Americans - behave in a totally unscrupulous manner: for example, Con Ed, the main power provider in New York City, makes over $1 billion in profits annually and yet has shut off electricity to an average of 80,000 customers each year over the last decade. Last summer, Con Ed turned power off in heat-vulnerable, primarily Black and brown neighborhoods in southeast Brooklyn in the middle of a life-threatening heat wave. Now, with masses of people out of work and forced to shelter at home under the coronavirus lockdown, power shut offs would be a death sentence for many as the weather warms up.
Such resistance draws strength from the campaigns for People’s Power that have been building around the US in recent years. In California, for example, the negligence of the large investor-owned utility PG&E led in 2018 to the deadliest wildfire in the state’s history, a disaster that claimed nearly 100 lives, caused $16.5 billion dollars in damage, and led to the bankruptcy of the utility. Activists responded by launching the “Let’s Own PG&E” campaign, a mobilization driven by the argument that “PG&E is a profitable disaster. California deserves a utility run for the people, not profit. The solution is to take it out of the hands of investors and put it in the hands of the public and PG&E’s workers.” Similar campaigns are unfolding in other cities around the US, from Chicago, to Providence, to New York City. The ultimate goal of this wave of People’s Power campaigns is to democratize, decommodify, decarbonize, and decolonize the grid.
The present catastrophic conjuncture offers these campaigns the opportunity to expand their demands for People’s Power from the municipal and state level to the national scale. As the crisis of fossil capital intensifies, demands for a People’s Bailout that involves a rapid and just energy transition can build on and alongside campaigns for People’s Power that have emerged in Britain and the United States in recent years. In the UK, for example, Labour for a Green New Deal has laid out bold plans for a speedy phase out of all fossil fuels and large-scale investment in renewable energy. Radical think tanks in the US like the Democracy Collaborative have also sketched complementary plans for promoting energy democracy through a Green New Deal.
Evidence is emerging of a potential Big Oil bailout through a provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed in late March. But bailing out Big Oil this way would be a classic example of disaster capitalism, in which billionaires benefit from a crisis by plundering the public purse, abandoning exploited communities, and entrenching the climate-destroying power of fossil capitalism. In place of such socialism for billionaires, energy democracy activist Johanna Bozuwa recently made a forceful case for a public takeover of the fossil fuel industry.
Public ownership could be achieved through a variety of measures, Bozuwa argues. The most obvious – and perhaps politically palatable – measure within the current context is to condition all fossil fuel industry bailouts and stimulus funds on government acquisition of a controlling equity stake in corporations receiving public aid, a stake that includes full voting rights. To avoid the moral hazard that government control of Big Oil might imply, such measures would have to be supplemented by an additional condition that the government exercise its new authority to wind down companies’ extraction operations, retool them towards renewable energy generation, remediate companies’ contamination of vulnerable communities and landscapes in the US and abroad, and fully fund transition programs for workers.
But such transitional bail outs are not the only path to public control. Bozuwa also advocates placing bankrupt companies in government receivership, as well as more aggressive measures such as a Congressional ban on private ownership of fossil fuel companies, and government use of eminent domain to seize privately held fossil fuel companies and their assets. With the value of fossil fuel companies crashing and their oil and gas assets stranded by the need for a speedy energy transition, compensation for such a public takeover should cost a relative pittance.
As we fight for public control and a rapid dismantling of fossil capitalism, we must ensure that People’s Power lives up to its name. The capitalist state is not and has never been a neutral vehicle of redistribution, as it is sometimes represented by liberals and even some social democrats. After all, it could be said that taxpayers already own the most economically shaky sectors of the fossil fuel industry. The US government forks over roughly $20 billion in direct subsidies to prop up the fossil fuel industry each year. Fracking itself might have been abandoned to the dustbin of history during the Great Recession of 2008 had banks like Goldman Sachs not taken the tax payer money doled out to them by the Federal Reserve through the Troubled Asset Relief Program (TARP) and plowed it straight into fracking. The Fed’s low interest rates, intended to help the housing market rebound, propped up fracking further by allowing fracking companies to borrow trillions of dollars from banks at negligible interest rates.
To win public support for the cause of energy transition, People’s Power campaigns need to develop radical new forms of energy democracy, ones that involve equitable popular access and governance directed to the needs of those who have borne the toxic brunt of fossil capitalism. Toward that end, Bozuwa’s manifesto for public ownership calls for the establishment of a Federal Just Transition Agency that would manage fossil fuel assets with the express goal of a phase-out grounded in just transition principles such as those articulated by the Climate Justice Alliance. A Just Transition authority must ensure accountability to frontline communities and labor unions domestically, and must also ensure that domestic energy transition does not become the vehicle for new forms of green colonialism on an international plane.
Winning People’s Power and Just Transition is the fight of the 21st century. It is also an intersectional struggle since it involves electrifying and decarbonizing everything, including transportation and the heating and cooling of houses. The forces arrayed against People’s Power are undeniably prodigious. The political establishment is currently representing fossil fuels as a key strategic sector of the US economy. Trump and the Republican Party have made it clear that they will do whatever they can to jack oil prices back up and to resuscitate fossil capitalism more broadly. Meanwhile, Trump’s now-confirmed antagonist in the upcoming presidential election, Joe Biden, has promised to preserve the fracking industry and has stacked his campaign staff with shills of the oil and gas industry. Moreover, climate activists must be clear that we are still perilously far away from a real energy transition despite the fact that pro-market pundits have been celebrating the rapid growth of renewables for years. Renewables like wind and solar in fact currently constitute only 10% of total final energy consumption in the US according to the Center for Climate and Energy Solutions (hydroelectric power, although usually considered a “modern renewable,” is a major source of carbon emissions because of the methane emissions from decomposing matter in dam reservoirs). The statistics are even more dire on a global level, where renewables only make up 2% of final energy consumption.
Yet the coronavirus pandemic has brought us an inadvertent crash decarbonization program. Now is the time to make the best of this brief opportunity for a rapid and just transition. Swift dismantling of the fossil fuel industry must be paired with the kind of job-creating build-out of renewable energy infrastructure called for in recent proposals for a Green Stimulus to transform the grid after decades of neglect, divestment now compounded by the coronavirus crisis. The current collapse of the fossil fuel industry may be our best – and perhaps our last – chance to make the just transition signified by People’s Power.
The author wishes to thank the following generous people for generative conversations that informed his writing: Johanna Bozuwa, Jeremy Gilbert, Alexander Kaufman, Chris Saltmarsh, and David Wearing.
Ashley Dawson is Professor of Postcolonial Studies in the English Department at the Graduate Center / City University of New York and the College of Staten Island. He is the author of numerous books, including the forthcoming People’s Power: Reclaiming the Energy Commons (O/R, 2020), as well as Extreme Cities: The Peril and Promise of Urban Life in the Age of Climate Change (Verso, 2017) and Extinction: A Radical History (O/R, 2016). A member of the Social Text Collective and the founder of the CUNY Climate Action Lab, he is a long-time climate justice activist.
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