The Real Horror of Climate Change
After reading Kitanya Harrison’s October 16th article, “Trapped in the Horror Movie that is Climate Change”, I felt compelled do more than leave a cursory note in the comments section. As someone who has worked in the oil and gas industry for thirteen years, I feel I have the experience to do so. If you’re tempted to stop reading because you think this is going to be a propaganda article for the industry, you’re wrong. Like many other people in the oil and gas industry, I believe climate change is a real and growing problem. The demonization of the oil industry for its role in climate change concerns me not because I think the industry is innocent (it isn’t), but because it shifts the blame in a way that is counter-productive.
Climate change is fundamentally an economic, not a scientific problem. Anyone who looks at the data objectively can see that. The reason so many people still refuse to acknowledge the reality of climate change is that data, no matter how irrefutable, doesn’t change opinions. Emotions change opinions and climate change is scary as hell. Harrison’s haunted house analogy is spot on in that regard.
What about the people who acknowledge the validity of climate change (either openly or not) but refuse to do anything about it? Are they just acting on greedy impulses? Not necessarily. One of the fundamentals of economics is that people respond to incentives. There simply aren’t enough incentives to curb climate change. The political and economic systems we have in place tend to reward short-term thinking and climate change is definitely a long-term problem.
An increasing number of companies are choosing to act responsibly and sustainably, even in the energy sector. I have BP solar panels on my roof, for example. But these moves have to make financial sense. Any publicly traded company has a financial responsibility to its shareholders. Businesses exist to make money. Period. Any company that tells you it’s trying to save the environment is doing so because it hopes that by appealing to your sensibilities, it will sell you more stuff. Do the people at companies like Patagonia ardently believe in their cause? Yes. But if they can’t sell you stuff, they will cease to exist.
In order for climate-friendly initiatives to make good financial sense, regulations must be put in place to even the playing field. Everyone has to bear the burden of fighting climate change which means those costs will eventually be borne by the consumer. A lot of consumers, even in a wealthy country such as the United States, either can’t afford the increases or don’t want to pay it.
Harrison referenced a list of the 100 corporate entities that are contributing to 71% of global emissions according to an article by The Guardian. The first four — China (coal), Saudi Aramco, Gazprom, and the National Iranian Oil Company — are all state-controlled entities. That means the money generated goes back into state coffers to fund things infrastructure, security, education, and yes, probably to line the pockets of some very corrupt people.
None of these countries deserve an A+ for their support of human rights. However, if you want to know what happens when you take away oil and gas revenue, look no further than Venezuela. Right now, Venezuelan oil production is at a fifty-year low and the country is facing an economic crisis (1). Prior to the collapse of oil prices in 2014, petroleum products accounted for 95% of the country’s exports (2). Since then the country has suffered hyperinflation and shortages of food and medicine. That’s not greed. That’s a system reliant on cheap, plentiful energy, and it can’t be disassembled overnight without catastrophic ramifications. Not all countries are as dependant on oil and gas revenue as Venezuela, but plenty are.
The next culprit on the list is ExxonMobil. I admit, even I don’t feel any love for Exxon or any of the other supermajors, but I don’t want to see them fail, either. ExxonMobil is a ridiculously huge company. If you sold it today, you could give every man, woman and child in the United States over $1,000 with the proceeds (3). It’s exactly the kind of low risk, large-cap, dividend-producing company that institutional investors swoon over which is why they own a majority ownership in it. That means it has a direct impact on pension and mutual funds.
It’s easy to vilify Big Oil, and there is certainly a historical basis to do so, but take caution. Big Oil is us. It is your teacher’s and state employee unions. It is the people in Venezuela struggling to find food. Harrison was right. Climate Change is like being stuck on a spaceship with a big scary alien expect we’re the alien.
The reason we like to blame Big Oil for climate change isn’t that it’s guiltier than the rest of us for the problem. We like to blame Big Oil because it’s easier, and it absolves us of any responsibility.
Here’s a helpful analogy for why that doesn’t work. Imagine you’re the DEA and you want to take down a drug cartel. The cartel is shaped like a pyramid with one evil kingpin at the top, distributors below him, and drug consumers at the bottom (being the most numerous). As a DEA agent, you have a limited budget, and it seems more efficient to go after the one guy at the top rather than the thousands of consumers at the bottom. But we all know what happens. If you remove the kingpin, another one will rise up in his place. As long as there is demand for the product, someone will produce it. It’s the same with climate change. If you attack the producers of fossil fuels, someone will just rise up to fill the gap, and the new guy might be even worse. In that sense, fighting climate change is more like Scarface than Alien.
The solution has to come from the bottom of the pyramid. The responsibility and the blame rest with the consumers which is a more difficult problem to solve. In any good horror movie, the monster symbolizes something inside ourselves which is so ugly and terrifying, we can’t face it. We externalize it instead, and it becomes the creature that stalks us in the night. The fact that we did this to ourselves, is the real horror of climate change.
