As a starting premise is this article title, “The world is on lockdown. So where are all the carbon emissions coming from?” We are flying less, driving less, and yet emissions have barely come down to the point they need to stay at to possibly meet the inadequate Paris targets.
Massive oil and gas bankruptcies were already predicted before Covid-19. This piece back in December, 2019, said a “bankruptcy boom has hit the oil and gas industry, and it’s just getting started.” Then, earlier this month there was an oil price war resulting in an international agreement from a number of OPEC and key oil producing states to cut production. And now, as of April 22nd, there are oil tankers (ships) holding 22 million barrels of stranded crude oil parked all over the world..
So what will become of the oil and gas industry, and what will become of us? Even with all this oil stranded we have not cut emissions enough. Of course governments are tempted to prop them up, and there have been some bail outs already, but they should not do more, they should let them go bankrupt.
People will argue that they shouldn’t because if they do then the government/taxpayer will have to clean up all those abandoned oil wells and toxic sites, but the truth is, they will anyway, as proof – the federal government just committed $1.7 billion to clean up orphan wells.
People will argue that there are too many jobs at stake. But the above orphan well clean up is good job creation, as is renewable energy. There are lots of better ways to create jobs.
People will argue that we still need oil and gas to run many aspects of the economy. This is true. But government can do that to a degree, where industry does not, as we have seen them do with both the TMX purchase, and their management of covid-19.
If oil and gas companies are allowed to fall the assets will still exist (wells, trucks, machinery, etc.) – the crown may as well pick up the positive with the negative (orphan wells / contaminated properties), and anything that doesn’t escheat to them they can buy for a song. Then they can operate it only as long as necessary, and shut it down when the time is right (as soon as possible).
People will argue that there is a danger the government will operate it for too long, and cling to it out of ideology rather than need. This is the biggest danger with such an approach. But is it really that different from the government buying any project they feel is “in the public interest,” like TMX?
Also, letting them die sends a signal to the world – that it’s time to embrace the new.
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