Big Oil is cheap: Should the government take it over?
When the price of oil cratered because of the coronavirus crisis and a price war between Russia and Saudi Arabia, the Trump administration proposed spending $3 billion to fill up the U.S.’s strategic oil reserve and save the oil industry—a line item that didn’t make it in the Senate’s final stimulus bill, but that the administration plans to continue to pursue. Some environmentalists have a different suggestion: With the price of oil so low, the value of fossil fuel companies has also cratered, so the government could just take ownership of the reeling fossil fuel industry, dismantle it in a way that’s fair to workers and states, and help speed the necessary transition to a zero-carbon economy.
“The most effective course of action right now would be a public takeover of the major fossil fuel companies, with a plan to wind down their operations and create new ventures that would create millions of good green jobs and help combat the climate crisis,” Mitch Jones, the policy director of the nonprofit Food & Water Action, wrote in a statement on Wednesday.
The timing makes sense, says Carla Santos Skandier, the co-manager of the energy and climate program at the Democracy Collaborative, both because of the necessity of rapid climate action and the state of the industry. “Right now, it’s actually very cheap to buy them out,” she says. When the group ran the numbers in 2015, it would have cost more than $1.1 trillion to buy 25 coal, oil, and gas companies. Now, to buy out the entire sector would cost around $700 billion, she says. That’s for 100% ownership; the government could also spend less to take a 51% ownership and gain control.