How to bail out the oil industry without destroying the planet
For a brief spell on Monday, one of the most watched metrics for crude oil prices went negative. Oil producers were literally willing to pay people almost $40 a barrel at one point to take their product. It was the first time in history that had happened.
Trading has recovered since then, but crude oil prices remain crushingly low, and are now a genuine existential threat to the U.S. oil and energy sector. That’s inspired demands for a federal bailout of the industry, including from President Trump himself — along with a chorus of opponents saying the industry isn’t worth saving. But depending on what we mean by “bailout,” this could be a moment of historic opportunity for the climate change movement.
Here’s the thing, though: The problem with the oil industry is that it’s run by people who don’t want it to die. But what if it was run by people who did recognize the need to ultimately dismantle fossil fuel production? If the federal government just straight-up nationalized the industry in the near future, it would have almost three decades to transition its workers and physical capital into green sectors, wind down oil production to zero, and figure out what to do about plastics and petrochemicals. Among progressive climate activists, there are burgeoning proposals to do just that. And right now, thanks to the coronavirus crisis, the oil industry has never been a cheaper bargain. Haliburton’s stock is down by two-thirds. ExxonMobil’s is down by 38 percent. Every energy company on the S&P 500 could be bought out for a grand total of about $700 billion — or roughly one-third of what the U.S. government just spent on the CARES Act.