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Annals of a Warming Planet
What Comes After Fossil Fuels?
March 12, 2020
The need for well remediation could provide ongoing work for precisely the workers who drilled them, allowing them an easier transition to the future.Photograph by Etienne Laurent / EPA-EFE / Shutterstock
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he fossil-fuel industry is slowly dying. It’s not just because of the transitory effect of the coronavirus
, which has temporarily cut demand; it’s secular, as the economists say. Just last week, Bloomberg reported
that even natural-gas utilities are feeling the scorn of investors, who want to put their money in renewable electricity. The key question, of course, is how
slowly the industry is dying—we badly need to speed up the current trajectory to catch up with the physics of climate change.
But it’s not too early to start asking what the industry will leave behind, beyond a badly overheated planet. And one answer, apparently, is a huge number of holes in the ground, not to mention a huge number of holes in government budgets. It turns out that, in jurisdictions around the planet, oil and gas companies have been failing to reclaim, or even plug, old wells that are no longer producing in commercial quantities. These unfunded liabilities are truly enormous.
Take Alberta, Canada, for example: the Alberta Energy Regulator has publicly estimated that the province faces $18.5 billion in costs for oil and gas wells that need to be decommissioned. But the A.E.R.’s internal review shows that the estimated cost could be up to forty billion to seventy billion. It has a hundred and seven thousand wells that are depleted past the point of profitability
. Another ninety-three thousand wells are inactive, and seventy-seven thousand have been plugged but are awaiting the more expensive part of cleaning up the site. Many of those are “orphaned”—the companies that owned them have gone bankrupt—and some, in addition to leaving scars in the landscape, are still leaking greenhouse gases, such as methane, into the atmosphere, making life hard for the farmers who must work around them. The Alberta authorities have on hand about two hundred and twenty-six million dollars “in security deposits to pay for cleanup if companies declare bankruptcy.”
The picture looks much the same around the world. The Carbon Tracker Initiative, a London-based think tank, published a paper
last month pointing out that “asset retirement obligations,” the term for what oil companies will have to pay to decommission their old wells, are significant, though hard to quantify, since “companies are not required to disclose the relevant information and rarely do.” But, in Europe, for instance, in 2006, these environmental liabilities amount to half of the companies’ reported debt obligations. The working assumption has always been that the costs would be paid by the proceeds from future operations: drill a new well, and part of the profit will go to pay for capping the last one. But that assumption no longer makes sense: since climate change is forcing us to keep oil and gas in the ground, the revenue stream for that cleanup is likely to disappear.
“The risk that the taxpayers will be left holding the bag is becoming increasingly difficult to ignore,” the report concludes. “Moreover, industry’s argument calls into question why you would allow the oil and gas activity in the first place, if the project cannot pay for its eventual retirement.” A good point, and one that will be a drag on the already lagging fossil-fuel sector, as investors begin to ask more probing questions. Mark Olalde and Ryan Menezes, in the Los Angeles Times
, provided a really powerful closeup
of one city last week: Los Angeles, it turns out, has nearly a thousand abandoned wells. “If not plugged and cleaned up, many of these orphaned wells will continue to expose people to toxic gases, complicate redevelopment and pose rare but serious threats of explosions. If the state were to tackle the cleanup, it would cost tens of millions of dollars.” Oh, and the city’s fire department has just one full-time well inspector.
If there’s a bright spot in all of this, it’s that the need to clean up these wells could provide ongoing work for precisely the workers who drilled them, allowing them an easier transition to the future. Two Canadian activists—Regan Boychuk, a founder of Reclaim Alberta and the Alberta Liabilities Disclosure Project, and Avi Lewis, the co-founder and strategic director of the Leap—outlined
in the Toronto Star
what they call an “epic opportunity.” A government “serious about sparking the next boom in the oil patch,” they write, would force the companies that have extracted hundreds of billions in profits from Canada’s prairies to use the revenues from their mature and declining wells to underwrite the cleanup, creating “decades of full employment” in Alberta. That would be the closest thing to a happy ending the oil industry can still provide the planet.
Passing the Mic
This week, I interviewed Vann R. Newkirk, II, a staff writer at The Atlantic
, about his new podcast series “Floodlines
,” which débuts this week. It’s an eight-part look at the legacy of Hurricane Katrina, which means, of course, that it’s also a look at the moment when both climate change and inequality emerged as concerns for many Americans.
Katrina felt revelatory—about climate change but also about who counts and who doesn’t in our country. I think a fair number of Americans were shocked to discover that lots of their fellow-citizens didn’t have cars, so they couldn’t simply flee. Was it a significant moment in the wider discovery of inequality in America?
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I think Katrina and the levees breaking were a moment comparable to, say, the Dust Bowl, in terms of reorienting people to the shape of inequality in America. Some of the critiques of white supremacy (and environmental racism) that we consider almost standard today were considered fringe or conspiratorial before Katrina.
The United Nations estimates that we could see a billion climate refugees this century. Given the lessons of the Katrina diaspora, what should we be thinking about when we read numbers like that?
The lesson of Katrina is that we already are seeing mass movements of people within the United States at the leading edges of climate disasters. Hurricane Maria, in 2017, reiterated that point, and state leaders should already be planning for large, permanent population shifts—both due to sudden disasters and to long-term attrition. Lots of people will be rethinking what “home” means. But another thing that Katrina should teach us is that maybe it’s time to also rethink the “refugee” framework. The American obligation to victims of climate change shouldn’t be motivated solely by altruism or charity. Rather, those victims have a claim against the rest of us—against U.S. government policy, against those who might profit off their displacement, and against those of us who warm and degrade the world—that we are morally bound to settle. This was the case during Katrina, and it will be for every climate-linked catastrophe down the road.
I’ve stood under that new levee wall in New Orleans’s Lower Ninth Ward at commemorations of the disaster and felt a welter of different emotions, from sadness and anger at the history behind it to a fear that it was, at best, a stopgap against a still-rising tide. What do you feel when you’re there, and what do you think longtime residents of that neighborhood feel?
I’ve spent a lot of time in the past year around the Lower Ninth Ward and with people who have roots there, and in my mind it’s become something like a Black Atlantis. The depths of pride and nostalgia people have for it feel, somehow, even more powerful than most folks’ memory of home. It’s a place defined by precariousness but also by the pride of building something of your own, for a community that hasn’t often been allowed to have things of their own. Standing by the wall, thinking about the power of their memory and the depths of loss, I’ve been overwhelmed at times.
An ominous new report helps us understand the basic math of climate change. Scientists who, for the past thirty years, have studied three hundred thousand trees in tropical rain forests, in the Democratic Republic of the Congo and the Amazon, report
that the trees’ ability to soak up carbon from the atmosphere is, apparently, flagging. “We’ve found that one of the most worrying impacts of climate change has already begun,” Simon Lewis, a professor in the school of geography at the University of Leeds, in England, and one of the senior authors of the research, told the Guardian
. “This is decades ahead of even the most pessimistic climate models.”
along the same lines but more hopeful: Can large-scale plantings of a South African shrub help soak up lots of carbon dioxide? “Because of spekboom’s remarkable growth rate, its rate of carbon capture can rival that of tropical forests,” a scientist who has studied the plant for years told the BBC.
It’s hard to call this a win or a loss, but it’s certainly wild: Saudi Arabia announced
that it would open the spigots and cut its oil prices by nearly ten per cent. The news—part of a fight with the Russians for market share amid falling demand—led to the most dramatic single-day decline in world crude prices in at least three decades. For motorists, it may mean paying two dollars or less for a gallon of gas, but for people worried about the climate it cuts two ways. Cheap oil means we’ll use more: expect the already robust
demand for S.U.V.s to continue. On the other hand, the lower price makes it hard for many producers to drill new wells—in particular, high-cost producers,
such as those in Canada’s tar sands.
The Ivies have been the last redoubt for the oil industry, as they fight against the divestment movement—but last week Brown University announced
the league’s first total divestment from funds that focus on fossil fuels. “People know that this sector is dying . . . and it’s just not a good long-term investment,” Brown’s president, Christina Paxson, told the student newspaper. “It carries too much risk for the endowment.” The announcement was followed a few days later by a similar pledge from Wesleyan—but, whereas Brown is already in the process of selling ninety per cent of its stock, Wesleyan said that the process could take until 2030, drawing a mixed
reaction from student activists who point out that the climate crisis is now.
For those keeping track of efforts to stop the financing of fossil fuels, an increasingly common note was struck by the Swiss bank UBS, which said that it was joining other institutions no longer interested in financing thermal coal, tar sands, or Arctic offshore oil projects—notably Trump Administration plans to open up the Arctic National Wildlife Refuge. An increasingly fascinating question: Exactly who will
be willing to underwrite drilling in what’s been called
Two pieces of music I’ve had on repeat lately: Dreams to Be Born
, by Rebecca Foon, and Legacies,
by Jesse Paris Smith. Both are meditative, absorbing, masterly; and they come from a pair of musical activists whose Pathway to Paris
concert series has turned into an adroit nonprofit that spurs worldwide climate action.
is a founder of the grassroots climate campaign 350.org and a contributing writer to The New Yorker. He writes The Climate Crisis
, The New Yorker’s newsletter on the environment.
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