Stop Oil and Gas Production
We need to stop burning fossil fuels. This is the fundamental change we need to make to halt increased climate disruption. The fossil-fuel industry tries to distract and deflect from this basic truth by offering unworkable work-arounds: invent a machine that cheaply and efficiently pulls CO2 from the air; spray sulfur compounds into the air to reflect sunlight back into space; stop eating meat and stop flying; plant millions of acres of trees; capture CO2 as it’s emitted from coal-fired electricity plants and inject it into the ground, etc. None of these have been shown to be viable at a scale that will come anywhere close to solving the climate crisis.
Large-scale reforestation and widespread changes in agricultural and forestry practices will help reduce greenhouse-gas (GHG) emissions, but, again, won’t scale up enough to solve the problem. They will probably just reduce GHG emissions to a point where we can keep extracting and burning a small fraction of the coal, gas, and oil we’re burning today.
The problem is urgent. Global average temperature has increased 1.3˚C from pre-industrial times, causing a significant increase in wildfires, droughts, species loss, and extreme weather events. Experts say we’re on a path toward 3˚C or 4˚C of warming, which will cause impacts several times worse than those we’re seeing now.
California policy, Executive Order B-55-18, signed by Governor Brown in 2018, mandates carbon neutrality by 2045. Complying with this policy will require that we phase out the burning of fossil fuels. The biggest changes will be in electricity production, where we’ll have to rely on renewables and an enhanced grid with electricity storage to ensure reliability; the transportation sector, where we’ll switch over completely to electric vehicles; and the elimination of natural gas infrastructure and use in homes and industry. California’s policy is in line with policies enacted by dozens of countries aiming for net-zero emissions by around mid-century. These countries include the European Union, which mandates climate neutrality by 2050, and China, which is aiming for climate neutrality by 2060.
Time to stop producing coal, oil, and gas in California
If we stop burning fossil fuels, we should stop producing them as well. We need a California Climate Law now, specifying how we will ramp down our production of oil and gas to zero by 2045. It should immediately halt the issuance of permits for new oil and gas drilling and exploration, and then require that existing wells be systematically closed down and cleaned up by 2045. The Climate Law must provide help for oil and gas workers whose jobs are eliminated, and for cities and regions that are economically dependent on oil and gas revenue.
Each year, the United Nations Environmental Program, in conjunction with the Swedish Environmental Institute, produces a Production Gap Report, highlighting the difference between the limited amount of fossil fuels we can burn if we are to keep global heating below 1.5˚C or 2˚C and the much larger amounts listed in oil and gas production plans by countries around the world. The latest Production Gap Report, issued in December, 2021, shows a huge gap between most countries’ Paris-accord commitments to reduce their GHG emissions and their plans for oil and gas production. The world is planning to produce more than twice the amount of fossil fuels by 2030 than would be consistent with limiting global warming to 1.5˚C and 50% more than would be consistent with 2˚C of warming.
These gaps signal to the business community that governments are not serious about effectively attacking climate change. If they were serious, they would make plans to ensure the planet ramps down its burning of fossil fuels to zero or near-zero by 2050, and concomitantly ramps down its production of fossil fuels. Enacting such plans into law would discourage businesses from building new infrastructure, such as gas-fired power plants and natural-gas pipelines, that will become stranded and useless by 2050. It would increase the urgency for auto manufacturers to develop new and better electric vehicles, and would encourage gas stations to switch to refueling with electric power instead of gasoline. It would force a faster upgrade of our electric grids so they can deal with the intermittency of renewable energy. It would make the business community realize that California plans in earnest to stop burning fossil fuels.
Phasing out oil and gas production would have significant co-benefits. Production pollutes the soil, water and air. California has thousands of wells located near to where people live and work. They are concentrated in disadvantaged communities and communities of color. They damage the health of those nearby, causing headaches, upper respiratory illness, nausea, nosebleeds, and possibly increased cancer risk. Methane leaks from oil and gas production are major contributors to the climate crisis. And many oil and gas wells in California are fracked, threatening water supplies with contamination from toxic fracking fluids. These problems would be mitigated somewhat with the 3,200’ setbacks that most Californian environmentalists are pushing for, but phasing out oil and gas operations would be much more effective in the long run.
California should take the lead on banning oil and gas production. Unlike France, which recently banned oil and gas production as of 2040, California produces a significant amount of oil and gas, so a ban in California would not just be symbolic. But oil and gas production accounts for less than 2% of California jobs, so phasing out those activities over a 25-year period would not cripple our economy. California has a history of leadership on environmental reform, and we should assume the leadership on this very important issue. Doing so could encourage other states and countries, including the federal government, to follow suit, and thus push the world toward the tipping point for climate action.
Actions to curtail fossil-fuel supply
An excellent article by Rutgers economists Mark Paul and Lina Moe, entitled “An Economist’s Case for Restrictive Supply Side policies: Ten Policies to Manage the Fossil Fuel Transition,” suggest 10 policies that we should adopt to phase out the production of fossil fuels. It’s focused on the US, but the policies could easily be adapted for other countries:
End Fossil Fuel subsidies
Ban new leases and permits on federal lands
Reject all new fossil fuel infrastructure
Build local fossil-free zones
Tad windfall profits
Enact a Carbon Cap and Dividend
Disclose climate-related financial risk
Monitor, fix, and enforce methane leaks
Ban fossil fuel exports
Nationalize the fossil fuel industry
Most of these suggestions are clear, but more explanation of each is available in the article. But I’d like to discuss the last one a bit more, as it’s a somewhat radical suggestion.
Why we should nationalize the fossil-fuel industry
A History of Nationalization in the United States, by Thomas Hanna, shows that the US has nationalized industries vital for the national interest many times in the past, especially during the two world wars. It has been done by Presidential executive order, and by Congress, but in Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952), the U.S. Supreme Court held that, in the circumstances applying in that case, the President did not have the legal authority to nationalize the steel mills during the Korean War. So Congress would probably need to authorize any such nationalization, which would be politically difficult to achieve right now, given current political realities in the US.
In past nationalizations, the government sometimes took ownership of the corporations being nationalized, and sometimes just took control of them, leaving ownership to existing stockholders. It would make more sense for the US to take ownership of the oil majors, like Exxon, than to try to control them without obtaining ownership. Exxon’s current market capitalization is about 1.5% of the current national debt, so the federal government could afford to reimburse current stockholders for the taking.
The idea would be for the government, once it controls the oil, gas, and coal majors, to wind down operations gradually, so that there are no more fossil fuels being produced in the US by 2050. The government would start out making a profit on its investment, since the industry is currently quite profitable. This revenue could be used to retrain industry workers as they’re laid off, and transition them to new jobs in renewable energy. The nationalized corporations would stop building pipelines and other fossil infrastructure. They would also stop exploring for new sources of oil and gas. They would need no further subsidies from the government. And they would stop promoting the idea that they can transition into the carbon-removal business. The oil majors have spent big, trying to persuade the public to allow them to continue business as usual. Nationalizing them would stop this flow of disinformation.
In my view, the climate emergency is much direr than the conditions that got us into the two world wars. We should be on a war footing, worldwide. Nationalizing the fossil-fuel companies in this country would show that the US is serious about, and taking the lead on, climate. It would not, in itself, guarantee that the US would become net-zero by 2050, so we would eventually have to prohibit the burning of fossil fuels, except in rare circumstances. But it would be a big step in the right direction.