In his first year in office, President Joe Biden has made it absolutely clear that he wants to make the oil and natural gas industries disappear. While even a progressive like Biden knows that it would be economically (and, one would hope, politically) disastrous to destroy those industries during his brief term, nonetheless Biden is setting things into motion in which the regulatory and law enforcement apparatus of the central government are quietly but effectively declaring war on what has been one of the most productive industries in US history.
The Biden administration and its allies are looking at a multipronged approach, with the first being efforts at trying to starve the industry of capital. As Biden appointees take over the Securities and Exchange Commission (SEC), they are turning what once was an agency that regulated capital markets into an environmental regulator:
Under the Biden administration, the Securities and Exchange Commission (SEC) will require public companies to disclose how operations contribute to climate change and what is being done to comply with greenhouse gas emission guidelines.
Former Acting SEC Chair Allison Herren Lee released a statement in July that laid out the update to disclosure requirements. The SEC will evaluate how companies follow climate change guidelines from 2010, discuss the climate-related disclosures with companies, then examine the impact of climate risks on the stock market. The commission will then update the guidelines, most likely resulting in an expansion of disclosure from companies on how their business affects the environment. (emphasis mine)
While some have called this “regulatory overreach,” there is nothing surprising or shocking about this. The Biden administration response to anything it can tie to “climate change” is going to be heavy-handed and expansive, especially since regulators now believe they have been near-divinely appointed to bring better weather to planet Earth.
(For numerous reasons, I am not going into the actual scientific claims regarding climate change, except to say that given the history of governmental initiative failures, I am not optimistic that the Biden administration through heavy-handed edicts can reduce hurricanes, floods, and other natural disasters that the ancients once called “acts of God.” Furthermore, no logical person can make a direct connection between Biden’s “Build Back Better” program and better weather.)
One only can imagine how far the SEC will take these so-called disclosure requirements. The idea is to mandate actions that appear to make firms look as though they are “fighting climate change.” For example, Amazon has been advertising that it will engage in corporate “responsibility” by making its delivery fleet all electric in the coming year. Likewise, Ford Motor Company has announced plans to spend billions of dollars on new plants that will make batteries and electric vehicles.
Whether these are “wise” business decisions is another matter. Certainly, they are politically wise in that Ford and Amazon will receive praise from the usual progressive suspects for their investment decisions, although I doubt that the progressive ruling class will let up on either company. Amazon’s so-called commitment to “fighting climate change” still is not going to keep the company from being accused of monopolistic behavior and union busting, along with the usual hysterical attacks that emanate from both the New York Times and the New Republic on the left and the American Conservative on the right, and one can be sure that sooner or later, the US Department of Justice and/or the Federal Trade Commission will be filing lawsuits against Amazon.
But investments must have a certain return in order to be worth undertaking, and given the current state of the US electric grids and the reach of present (and near-future) technology, it is doubtful that this multibillion-dollar turn toward going electric is going to have a return on investment that would come close to buying and building conventional gas- and diesel-powered vehicles. One doubts seriously that if the political climate were not so hostile to oil and gas, Ford and Amazon would be running on batteries.
But there is an even bigger threat to the oil industry than just Ford and Amazon wanting to go electric: there is a movement from the left to charge oil and gas executives with “crimes against humanity” that almost surely will engulf the Democratic Party as it continues to become radicalized. For now, those calling for imprisonment of energy industry leaders are publications like Jacobin, Common Dreams, Gizmodo, and The Guardian, but as the Left continues to march through all of the major institutions in Europe and North America, such a scenario easily could become mainstream in a short time.
Of course, the notion that oil executives “knew” something about “climate change” that was hidden from everyone else is sheer nonsense. There is no other way to describe that belief, but we already know from modern experience that nonsense has become the ruling ideology of progressives in this country. For those that believe that justice or the “rule of law” would prevail in an ideological climate, one is reminded of a quote from Aleksandr Solzhenitsyn in The Gulag Archipelago: If the intellectuals in the plays of Chekhov, who spent all their time guessing what would happen in twenty, thirty, or forty years, had been told that in forty years interrogation by torture would be practiced in Russia; that prisoners would have their skulls squeezed with iron rings; that a human being would be lowered into an acid bath; that they would be trussed up naked to be bitten by ants and bedbugs; that a ramrod heated over a primus stove would be thrust up their anal canal (the ‘secret brand’); that a man’s genitals would be slowly crushed beneath the toe of a jackboot; and that, in the luckiest possible circumstances, prisoners would be tortured by being kept from sleeping for a week, by thirst, and by being beaten to a bloody pulp, not one of Chekhov’s plays would have gotten to its end because all the heroes would have gone off to insane asylums.
While progressives have not (at least yet) reached the depths of the commissars Bernie Sanders used to admire (and probably still does), nonetheless they understand something about the destruction of a society and its economy and seem eager to do what they can. From the Green New Deal, in which progressives believe they can centrally plan an entire economy, to the current “divestment” movement to keep new capital from the oil and gas industries, progressives believe they can somehow improve American lives by making them substantially poorer.
And it is not just the Far Left that is looking to find ways to throw oil and gas executives in prison. The New York State attorney general’s office is currently “investigating” oil companies and Massachusetts also has launched a “probe” into the question of whether oil executives “misled the public” about the horrors of climate change. One can expect other blue state attorney generals to do the same as the divide continues to grow between progressives and the people that are harmed by progressive governance.
The rush to destroy the oil and gas industries is coming from the political, academic, religious, corporate, and entertainment elites in this country, and they don’t care about the ramifications of their actions, and why should they? As elites, they are in the upper-income echelons of society, live in gated communities, and can afford the inconveniences of electric vehicles, which are a symbol to others of their “commitment” to “fighting climate change.”
Nonelites, however, do not have the same privileges, and they are the ones that would face the empty shelves in stores, the shortages, freezing in their homes in the winter, and dealing with summer heat without air conditioning. People in rural areas would find themselves back in the throes of poverty that they left decades ago, thanks to those fossil fuels that the progressives regularly demonize.
Not that the elites would care. Despite their claims that destroying the oil and gas industries would “improve the lives of working-class Americans,” there is no way to keep up even a semblance of our present standard of living without adequate electricity and fuels. Windmills, solar panels, and other renewables cannot replace what already exists no matter how much rhetoric comes from Joe Biden’s office.
Without getting into arguments about fossil fuels and climate change, one of the so-called smoking guns has been the series of massive wildfires on the West Coast. While progressives blame climate change, perhaps they should look in the mirror. Having been successful for the past few decades in setting off vast tracts of forests in the name of “protecting” the lands and forbidding logging, they forget that when there is no land management, trees grow closer together, they die, and they are easier victims of blight and insect damage. The result is that the forests become extremely combustible, and when they inevitably burn, the fires become conflagrations. But it always is easier to blame Exxon.
Reprinted with permission of Mises Institute.
Author: William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland. Contact William L. Anderson