As the coronavirus pandemic threatens health and safety on an unprecedented scale, people around the world are uniting in novel ways to flatten the curve, support those on the frontlines of the crisis, and assist members of their community. But meanwhile, others are capitalizing on the crisis to line their pockets.
The biggest offender? The oil, gas, and plastic industry. These companies are some of the hardest hit by the current crisis. (As a matter of fact, leading oil and gas companies have lost an average 45% of their value since the start of 2020. That’s huge.)
And now they’re lobbying hard for governments worldwide to provide massive bailouts, exempt them from rules designed to protect health and safety, stop enforcing critical environmental regulations, rollback critical victories, and criminalize protest.
CIEL’s new report — Pandemic Crisis, Systemic Decline — reveals that the oil and gas industry was in dire straits long before the COVID-19 crisis. That means government support for fossil fuel companies will only delay the inevitable transition to a green-energy economy, while in the short term, they will be siphoning away limited resources that are essential to protecting people’s health and well-being.
The pandemic has revealed deep cracks in the foundation of the system in which we live. And now more than ever, we should be rebuilding the future we want to see — not pouring money into industries that harm people and the planet. It’s a critical moment to push back against the industry’s ongoing grip on our political system.
Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries (April 2020)
Amidst a global pandemic caused by the novel coronavirus, the oil, gas, and plastic industries are exploiting the crisis by aggressively lobbying for massive bailouts and special privileges in a desperate attempt to revive an oil and gas industry already in decline.
Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries documents how long-term systemic declines in the oil and gas industry had been accumulating long before the coronavirus pandemic emerged. Compounded by the impacts of the pandemic and related economic crisis, the industry’s collapse has accelerated, with leading companies losing an average of 45% of their value since the start of 2020.
While the current crises have exacerbated the industry’s collapse, its underlying risks remain unchanged. Ultimately, government bailouts and regulatory rollbacks will not reverse the inevitable decline of the oil, gas, and plastic industries.
Recommendations:
- Public Officials taking policy action to respond to COVID-19 and the economic collapse should not waste limited response and recovery resources on bailouts, debt relief, or similar supports for oil, gas, and petrochemical companies.
- Institutional Investors and Asset Managers should recognize the overwhelming evidence that the risks of continued investment in fossil fuels now substantially outweigh the benefits, and they should rebalance their portfolios to eliminate their exposure to volatile and declining oil and gas assets.
- Frontier Countries considering whether to open their lands, waters, and democracies to new oil and gas extraction should urgently reassess their prospects in light of the collapse in oil prices and demand, demonstrated severe risks of economic dependence on volatile oil markets, ongoing long-term decline of the sector, and its fundamental incompatibility with climate action.
- Local Communities and Decisionmakers should reject demands from the oil, gas, and petrochemical sectors for public subsidies, tax abatements, lax environmental enforcement, or other special concessions. They should interrogate industry promises of long-term sustainable employment actively and skeptically, and they should require evidence to support those claims that goes beyond simplistic assumptions of market growth. In the rare circumstances where these burdens are met, affected communities should require project proponents to irreversibly commit the funds required to restore communities and the environment when the project reaches the end of its economic life.
