In April of this year, something happened that no one saw coming. The pandemic was picking up steam, global economies were plunging, jobs were either lost or relocated… And we thought we were in this thing for a month, maybe a month and a half.
So maybe the news of what happened in late April didn’t hit quite as hard as it should have. Because it defied the soundest financial advice of the world’s richest billionaires, standard retirement account allocations, and one of the surest ways to build up generational wealth…
In late April, the price of oil dropped to zero. Then, it went negative.
For those whose fiscal worth was deeply entrenched in market behavior, this was a catastrophe. Never before had anything like this happened. Oil was the safest bet you could make – everyone needs it to do anything, go anywhere!
Nixon severed the dollar from gold in 1971. But what you might not know is that the dollar didn’t float aimlessly in space after that. Through a deal arranged with Saudi Arabia, the U.S. dollar became the currency tied to oil prices in order to standardize them.
For quite some time, the value of the dollar has been inextricably linked to the value of petrol.
When people couldn’t go anywhere in their cars, subways were shut down, and air travel was halted, we didn’t need oil anymore. And the price reflected that.
A lot of questions were raised about the continued viability of oil as a means of both gaining and representing wealth.
Reports came from left and right detailing the fall-out…
Pandemic + Oil Industry = Green Deal?
Oil rigs left bobbing on coast lines because inland repositories were full. Giant oil magnates began reconsidering contracts and laying off employees. The Energy Information Administration released a report showing that because of the shelter-in-place orders, renewable energy is poised to surpass coal electricity in 2020 for the first time ever. Every major bank in America, except the Bank of America, will no longer fund oil drilling in the Arctic.
The UN even published a report detailing how and why the recovery from the pandemic – in terms of infrastructure, employment, healthcare, and global policy – ought to be green.
Yes, the renewable energy sector lost 106,000 employees in March as they filed for unemployment (double the number of total people working the coal industry, by the way.)
But we’ve also learned that renewable energy is becoming more available and less expensive to the average citizen. Solar and wind energy has cleaved its way to the masses as onshore wind prices dropped 50% during the last decade.
All this to say –
The major resistance to going green so far has been that we need oil, and everyone is so invested in it that we can’t pull ourselves out of oil without bankrupting everyone.
But it turns out…
That’s not really the case.
Oil went negative. Green energy is rising in popularity and dropping in cost. The clean energy sector is gaining momentum, while the fossil fuel industry requires near-constant CPR (recently, upwards of $5 billion) in the form of federal aid programs like the CARES Act and the Payment Protection Program.
Pipeline Programs: A Tale of Woe
In the past decade or so, indigenous protesters have made major news headlines fighting the construction of various crude oil pipelines, most notably the Dakota Access Pipeline.
It’s been constructed bit by bit, but largely it’s languished in bureaucratic limbo while some agencies approve of moving forward, and others demand more thorough environmental reviews.
In the beginning of June, President Trump signed executive legislation allowing corporations to bypass certain environmental considerations, as long as they were considered impediments to economic progress by the corporations in question.
Things weren’t looking great.
Indigenous people didn’t stop protesting, activists and lobbyists didn’t let up, and even amid protests against police brutality and protests against lockdown orders, people found the space to protest the pipelines.
But then, a federal judge on the U.S. District Court for Washington D.C. ruled that the DAPL’s approval violated the National Environmental Policy Act. Just one day after Duke and Dominion took the construction of the Atlantic Coast Pipeline off the table, the DAPL ruling required that the 1,172 mile crude oil pipeline be drained of oil and inoperative in 30 days. The day after that, the Keystone XL pipeline’s permit rejection was upheld by the Supreme Court.
And speculators believe that this decision heralds similar fates for the Trans Mountain Pipeline, the Mountain Valley Pipeline, Enbridge’s Line 5 and Line 3 Projects, and the Jordan Cove Liquid Natural Gas Terminal.
Maybe the pandemic finally showed the world fossil fuels are a losing bet, and it’s time to invest even an ounce of the capital and protection corporations and politicians award to oil to renewable energy instead.
Stay tuned for advice on how to break up with fossil fuels in your civilian life!