Nationalizing the Power Industry Isn’t Radical
Kate Aronoff discusses Thomas Hanna’s work on nationalization in the context of the increasing urgency for public ownership of power utilities.
Far from a radical socialist sledgehammer, nationalization and its variants have been used by both Democratic and Republican administrations, sometimes to wide acclaim. The fuel and utilities industries, which Sanders’s platform focuses on, present a particularly good case for some kind of government intervention.
Thanks to oil and gas companies who’ve ridden high on cheap debt since the last recession, energy carries the largest corporate debt burden of any sector. In the past month, the coronavirus has suppressed demand for oil, bringing prices bellow $50 a barrel, flirting close to the break-even price for producers in the American Southwest’s prolific Permian Basin. As the Wall Street Journal has reported, $137 billion worth of oil and gas debts will mature between 2020 and 2022, much of that from companies with negative cashflows; amidst a recession, that could spell disaster. Presidential candidates have yet to present a plan for what happens if these companies—which meet a significant portion of the world’s oil demand, and produce a sizable chunk of its emissions—go bust, leaving the workers and communities who depend on them stranded. Nationalizing these companies as their valuations plummet, some progressive economic advocates argue, could provide a pathway for such communities and the country as a whole to transition quickly toward a low-carbon economy, rather than suffering larger disruptions as CEOs and investors walk away with whatever’s left; coal miners have seen the latter all too often.