Economist Robert Pollin says nationalization isn’t a panacea but it would eliminate the obstacles that Big Oil places in the way of public financing for clean energy investments.
(Piqsels)
By Jessica Corbett
Common Dreams
In the wake of a United Nations report that activists said showed the “bleak and brutal truth” about the climate emergency, a leading economist on Friday highlighted a step that supporters argue could be incredibly effective at combating the global crisis: nationalizing the U.S. fossil fuel industry.
Writing for The American Prospect, Robert Pollin, an economics professor and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst, noted the Intergovernmental Panel on Climate Change (IPCC) and high gas prices exacerbated by Russia’s war on Ukraine.
“If we are finally going to start taking the IPCC’s findings seriously,” Pollin wrote,
“it follows that we must begin advancing far more aggressive climate stabilization solutions than anything that has been undertaken thus far, both within the U.S. and globally. Within the U.S., such measures should include at least putting on the table the idea of nationalizing the U.S. fossil fuel industry.”
Asserting that “at least in the U.S., the private oil companies stand as the single greatest obstacle to successfully implementing” a viable climate stabilization program, Pollin made the case that fossil fuel giants should not make any more money from wrecking the planet, nationalization would not be an unprecedented move in the United States, and doing so could help build clean energy infrastructure at the pace that scientists warn is necessary.
The expert proposed starting with “the federal government purchasing controlling ownership of at least the three dominant U.S. oil and gas corporations: ExxonMobil, Chevron, and ConocoPhillips.”
“They are far larger and more powerful than all the U.S. coal companies combined, as well as all of the smaller U.S. oil and gas companies,” he wrote. “The cost to the government to purchase majority ownership of these three oil giants would be about $420 billion at current stock market prices.”
Emphasizing that the aim of private firms “is precisely to make profits from selling oil, coal, and natural gas, no matter the consequences for the planet and regardless of how the companies may present themselves in various high-gloss, soft-focus PR campaigns,” Pollin posited that “with at least ExxonMobil, Chevron, and ConocoPhillips under public control, the necessary phaseout of fossil fuels as an energy source could advance in an orderly fashion.”
Managing the Transition
“The government could determine fossil fuel energy production levels and prices to reflect both the needs of consumers and the requirements of the clean-energy transition,” he explained. “This transition could also be structured to provide maximum support for the workers and communities that are presently dependent on fossil fuel companies for their well-being.”
Pollin pointed out that some members of Congress are pushing for a windfall profits tax on Big Oil companies using various global crises — from Russia’s war on Ukraine to the ongoing Covid-19 pandemic — to price gouge working people at the gas pump.
The proposal, he wrote, raises a more basic question:
“Should the fossil fuel companies be permitted to profit at all through selling products that we know are destroying the planet? The logical answer has to be no. That is exactly why nationalizing at least the largest U.S. oil companies is the most appropriate action we can take now, in light of the climate emergency.”
Robert Pollin in April 2017. (Wikimedia Commons, CC BY-SA 4.0)
The economist highlighted the long history of nationalizing in the United States, pointing out that “it was only 13 years ago, in the depths of the 2007–09 financial crisis and Great Recession, that the Obama administration nationalized two of the three U.S. auto companies.”
In addition to enabling the government to put the nationalized firms’ profits toward a just transition to renewables, Pollin wrote, “with nationalization, the political obstacles that fossil fuel companies now throw up against public financing for clean energy investments would be eliminated.”
Nationalization “is not a panacea,” Pollin acknowledged. Noting that “publicly owned companies already control approximately 90 percent of the world’s fossil fuel reserves,” he cautioned against assuming such a move in the U.S. “will provide favorable conditions for fighting climate change, any more than public ownership has done so already in Russia, Saudi Arabia, China, or Iran,” without an administration dedicated to tackling the global crisis.
Pollin is far from alone in proposing nationalization. Writing for Jacobin last month, People’s Policy Project founder Matt Bruenig argued that “an industry that is absolutely essential to maintain in the short term and absolutely essential to eliminate in the long term is an industry that really should be managed publicly.”
“Private owners and investors are not in the business of temporarily propping up dying industries, which means that they will either work to keep the industry from dying, which is bad for the climate, or that they will refuse to temporarily prop it up, which will cause economic chaos,” he wrote. “A public owner is best positioned to pursue managed decline in a responsible way.”
In a piece for The New Republic published in the early stage of the pandemic a few years ago, climate journalist Kate Aronoff — like Pollin on Friday — pointed out that nationalization “has a long and proud tradition of navigating America through times of crisis, from World War II to 9/11.”
As Aronoff — who interviewed New College of Florida economist Mark Paul —reported in March 2020:
“In a way, nationalization would merely involve the government correcting for nearly a century of its own market intervention. All manner of government hands on the scales have kept money flowing into fossil fuels, including the roughly $26 billion worth of state and federal subsidies handed out to them each year. A holistic transition toward a low-carbon economy would reorient that array of market signals away from failing sectors and toward growing ones that can put millions to work right away retrofitting existing buildings to be energy efficient and building out a fleet of electric vehicles, for instance, including in the places that might otherwise be worst impacted by a fossil fuel bust and recession. Renewables have taken a serious hit amid the Covid-19 slowdown, too, as factories shut down in China. So besides direct government investments in green technology, additional policy directives from the federal level, Paul added, would be key to providing certainty for investors that renewables are worth their while: for example, low-hanging fruit like the extension of the renewable tax credits, now on track to be phased out by 2022.”
While Pollin, Bruenig, and Aronoff’s writing focused on the United States, campaigners are also making similar cases around the world.
In a June 2021 opinion piece for The Guardian, Johanna Bozuwa, co-manager of the Climate & Energy Program at the Democracy Collaborative, and Georgetown University philosophy professor Olúf??mi O Táíwò took aim at Royal Dutch Shell on the heels of a historic court ruling, declaring that “like all private oil companies, Shell should not exist.”
“Governments like the Netherlands could better follow through on mandates to reduce emissions if they held control over oil companies themselves,” the pair added. “It is time to nationalize Big Oil.”
Jessica Corbett is a staff writer for Common Dreams.
This article is from Common Dreams.
The views expressed are solely those of the author and may or may not reflect those of Consortium News.
I was astonished that American Big Oil could or would not push for an alliance between our government and the Canadians by agreeing to issue an emergency construction plan that sends tar sand oil via pipeline straight out to the Pacific coast. From there over the top of the world into Europe.
As I’ve indicated in my commentaries elsewhere, if corporate entities cannot assume their social responsibilities, like they did prior to 1975 (transnational obligations to friendly nations, employee retirement funds, medical insurance and so on, then nationalization might very well be the answer.
Since the Can’t Do-ers seem to have sway these days, there is an alternative route and plan. Finland, Iceland, Norway, and Denmark are combining their technical know how to extract Arctic natural gas, then export it to Central Europe. A trillion cubic feet of natural gas is just sitting under Iceland. The story goes… that when a huge meteor hit the earth millions of years ago, the Iceland landmass was formed and that impact included almost incomprehensible temperatures and pressures resulting in the creation of natural gas from elementary carbon containing rock present in the crust. Granted, this enormous gas pocket runs deep and is well below the surface. There are obvious technical challenges here, so what’s new? Point being, I’m not aware of any combined effort by Mobil/Exxon and Shell (among others) to get that gas to the EU. Did our government and corporate America have the foresight or cunning to direct financing and technical expertise towards the Nordic area gas fields ? NO they instead preferred to run pipelines over pristine farming lands in the USA. Perhaps it all came down to simple greed ..something along the lines of US Big Oil control over every aspect of R&D, extraction and distribution, aka no regard for our European political alliances, military or cultural links. Think!, had this research been in place, the Russians would have not used military force in the Ukraine. Their song today would have had a true capitalist ring to it. Example; we will undercut the price of Nordic gas if you (enter any number of options or deals here) or, please allow us to provide 10% of your gas, sweetened with a long term contract that cannot be withdrawn or better still!, Russia’s plea to stop that research you all are doing between the USA and the Nordic’s to supply Central Europe with gas. If you do, Mother Russia pledges to sell weaponry to third world nations (only) leaving the US and it’s western allies to make convulsion and trouble south of Europe’s borders, pouncing on our armaments buyers….well is it a deal?
In the name of Climate Change I read that Davos called for a moratorium on new investment in fossil fuel (Shell had a “Banner” year I also read recently, I even saw Greta in the news promoting it). The cross-country pipeline and NS2 were/are existential threats to the Energy sector with Trillions (with a T) of investment in LGN. It’s not far fetched to wonder if current affairs are to save the energy investors: “to be or not to be …” In either case half or more of the world’s people are to suffer.
I can compose a much more powerful and convincing set of arguments for nationalization than that posted by this author and those she has cited. Can’t be done as a comment and wouldn’t want to test this community’s patience that way. However, it is a pointless argument after all as it would have to be done ligslatively and the frigging energy companies OWN the legislature – oil companies have owned the Senate for over 100 years. Remember how the other party smeared Obama as a socialist (what a joke)? Any proposal like this would go over like a lead balloon.
It’s not like the government will be any more environmentally responsible than the oil companies. If you think they will be then I’ve got a bridge to sell you. The US military is one of the biggest polluters out there.
Have we not targeted countries for nationalizing their resources? Iran, Cuba, Venezuela comes to mind but there are more.
This is not really a proposal for nationalisation, but for the government paying again to buy an industry that only has survived on a steady stream of government subisdies and that has left the world with an incredible heritage of pollution and co2 emmissions. Why would workers / taxpayers have to pay AGAIN to get these companies in public ownership? These companies should be expropiated with compensation only given for those with proven needs, like small shareholders that put their savings in these companies.
To Ronald Portier from elmerfudzie. I concur with your commentary. Both the D.C. beltway and major Western Occident corporate entities have kept hidden from public view, that fact that following WW II our so-called capitalist system was in reality is a command economy set in place long after war’s end.. a fiscal policy that sustains the MICC by income taxes and non competitive bidding. Scads of fighter aircraft from the early 1950’s on wards remain parked, perfectly preserved, in endless rows underneath the dry, southwestern desert sun. These aircraft symbolize an intellectual and financial waste of public resources. The actual price tag includes an ever growing number of austerity programs, depriving generations of Americans a proper education, medicare, economic opportunity, stable family life (ask any army brat). A withering of the quality of life, all for the sake of military superiority. How many lives went bust in order to tweak small “improvements” to fighter jets and capabilities? . The losses are too subtle, difficult to itemize. A silent suffering endured by children who’s parents were in uniform bouncing from once AFB to another.
This dystopian and nihilistic lunacy has got to STOP. It’s an “infection” so prevalent that potential adversaries see some merit in keeping up the arms race along with the West.
We’ve heard the adage before, monkey see monkey do… to the point of bankrupting governments such as the CCCP for example leaving the citizenry they’ve sworn to protect-in utter destitution and America is soon to follow… Consortiumnews readers may recall that following the collapse of the Soviet Union, their citizens were left to wander about in many cities, foraging for food in garbage cans (gee that sounds familiar for some reason). At that moment in time, it was a perfect opportunity to extend a helping hand to Moscow but instead, London and Wall Street sent carpetbaggers to mercilessly plunder state owned enterprises, buying them up for (colloquially) pennies on the dollar. How many of his tears did Boris Yeltsin mingle into that morning sip of vodka? – we will never know. This latest humiliation (endless and extraordinary sanctions) may in the end, exact an unbearable cost for everyone living on planet earth. Recently a U.S. Congressmen made a public pronouncement regarding his support of Zelensky’s armaments appeal. I’m paraphrasing it as follows; If we fight them (Russians) there we won’t have to fight them here. What the Congressman fails to comprehend is that any nuclear exchange will contaminate the globe. Fallout comes to both victor and vanquished. An atmospheric phenomena called nuclear winter will ensue within weeks and fission products from A-bomb explosions get randomly deposited across the wilderness as well as farming soils (hot spots), inhaled particulates into innocent lungs, held in some mother’s arms. The horror doesn’t stop there, Chernobyl proved just how thorough the environmental penetration will be, then- global starvation enters the picture. I reference here, a publication titled: Chernobyl authored by Alexey V. Yablokov and V. Nesterenko et al. After reading it I was amazed to discover that Ukrainian top soil (in the northern quadrant) was a prized export item, this- following the reactor disaster! A incredible and persistent lack of basic scientific principles regarding soil contamination, ionizing radiation and associated bio-hazards not to mention, wheat exports! worse than GMO’s and certainly not worth fighting over, ugh…
The missile exchange scenario suggested here, wouldn’t require a number above thirty or so (single warhead rockets) from either side. Reason being that atomic bursts over cities release as much as a third cubic mile of intensely radioactive dust-for each detonation. It enters the stratosphere following a ~250 KT A bomb over densely populated cities. The dust just floats back down to earth, randomly distributed by air turbulence. This pattern of radioactivity is totally unpredictable and defies any mathematical modeling …think twice! Will Cheney’s ilk ever come to their senses?
In reality, the for-profit fossil fuel companies are at the heart of the climate crisis that is affecting everyone, everywhere. Biden’s election was supposed to be an “all hands on deck” moment for the US to demonstrate its ability to take the lead in tackling climate change mitigation. Well, that did not happen, at all, and it seems now that it was never the plan. Mr. Biden apparently had more important things to do especially since his State department had the Ukraine project burning a hole in their pocket when they arrived on the scene. So Biden is either a fraud or incompetent. Whereas the Ukraine crisis is man-made, climate change is under nature’s control and there is no stopping it and precious little time to do anything about it. Biden was supposed to be the adult in the room, especially after Trump. He’s not. Trump is a narcissistic incompetent. Biden, using Ukrainian lives and putting the world at risk simply to maintain America’s untenable uni-polar position has proven to be just plain evil.
So long as the oil companies are determined to put their own short-term profit ahead of the welfare of the entire world, nationalizing the fossil fuel industries is the minimum that should be done and it should have been done 2 years ago. At this point, Biden has done orders of magnitude less than nothing on the most important issue facing humanity in its entire history. And, he wants to continue in the same vein.
I don’t see where nationalizing big oil would be of advantage…when government(s) too are out to make a buck at any cost, regardless who/what is hurt. But…why not nationalize the fracking industry too? Just as damaging.
Welcome to the real fight. See hxxps://brucelesnick.substack.com/p/to-beat-climate-change-we-must-nationalize for an argument for nationalization made in 2015. This piece also distinguishes between bureaucratic nationalization and nationalization under workers’ control. Only the latter form can break the present logjam.
Big Oil has to be nationalized in the public interest.
I love the idea! I think we should do it.
This leads me to a question. Presumably, like everything else we do, there would be extensive debate before it can happen. Would a period of debate in which it appears that it may happen cause the stock prices to drop as investors begin to worry that it might happen so they start to get out? And, as the stock prices fall and the deed becomes more affordable for the government, would that make the stock prices fall even more with more investors bailing?
Maybe it would be a thing where it could be helpful even to put it on the table and discuss it. It certainly makes sense. Something has to give somewhere to end the death spiral and that seems like an excellent place to start.
Nationalize the billionaires.