A few weeks ago I closed my U.S. Bank credit card. I recently wrote a letter the U.S. Bank executives explaining that it is because they are a bigger funder of the Dakota Access Pipeline (DAPL). Here’s the letter:

December 27, 2016

To: Richard K. Davis, Chairman and CEO, U.S. Bank
Cc: Dana E. Ripley, Senior VP of Corporate Communications, U.S. Bank
Susan Beatty, Brand, Corporate Social Responsibility, Sponsorships, U.S. Bank

Recently I closed my U.S. Bank credit card. I have not had any negative experiences with U.S. Bank, but I learned that the bank is one of the biggest funders of the Dakota Access Pipeline (DAPL), and heeded the calls from #NoDAPL organizers to close accounts with U.S. Bank.

It is worth remembering that the fight at Standing Rock over the DAPL is first and foremost about respecting the sovereignty and land of American Indian tribes. Only secondarily is it about fossil fuels and climate change. However, as a climate activist, that secondary motive is very important to me, as it should be to you.

Funding a fossil fuel project is fundamentally at odds with the function of a bank. The role of a bank is to facilitate investment: the use of today’s money to build things that will generate value over time. Building fossil fuel infrastructure now destroys value. Generations will suffer and have to pay dearly for the damage generated by new oil and gas pipelines, coal mines, and the like.

What you are doing is enriching yourselves in the present at the expense of the future, and that is the exact opposite of investment.

I ask you to remove all funding from the DAPL, and also to remove all funding from all fossil fuel infrastructure projects, and to publicly commit not to fund any fossil fuel projects in the future.

Sincerely,
Martin MacKerel

If you would like to join me, check out Yes Magazine’s article on which banks are funding DAPL and how to contact them.

The Fossil Fuel Endgame

It is my contention that we are currently witnessing the beginning of the end of the fossil fuel industry.

After years of high prices for crude oil (~$100/barrel for Brent, just under that for West Texas Intermediate), prices starting falling in late summer 2014 and have been sitting for the past few months at just above half their former prices. The proximate cause of this fall is the decision by the Saudis to go after market share rather than keep oil prices high.

I believe this decision marks a turning point in the history of oil. It’s not short-term but permanent.

The average barrel of oil has become more difficult to extract over time, and oil prices have risen accordingly. The Saudis are sitting on enormous reserves of cheap-to-extract oil, and have benefited from the increased prices. A couple of years ago, their reserves looked like a steadily appreciating asset – worth more in the future (when oil would likely be more expensive than now).

However, we have two major new factors: renewable energy is rapidly decreasing in cost, and real climate policy in the major economies (US, China, EU) looks inevitable. Now oil is likely to be less lucrative in the future – and most of it will have to be left in the ground. This graph shows just how dramatically the price of solar has dropped in recent years (wind has seen similar though less dramatic improvements over time):

That means that oil is now a depreciating asset and it makes financial sense to sell it now, even at historically cheap prices. It’s like a gold rush in reverse, as the endgame of the fossil fuel era plays out. The Saudis have single-handedly cut the price of oil in half and have announced their intention to push prices lower if need be. So oil prices won’t be going up any time soon.

At today’s prices, Canadian tar sands projects are totally untenable, and Bakken shale oil is marginal: oil will continue to flow from existing wells, but new wells will only tap the most productive spots. This means that the need for North American crude-by-rail will dry up over the next year or so. In particular, we’ve seen the Pittsburg WesPac project be re-proposed, but this time without the rail terminal. And the Kinder Morgan crude-by-rail terminal in Richmond, CA apparently stopped receiving shipments in February 2015.

Dinosaurs Mating

Recently Shell announced that it would buy the BG Group (an LNG – liquefied natural gas – supplier) at a 50% premium in a huge deal. Far from being a sign of a robust and growing industry, this reminds me of nothing so much as the “dinosaur mating” of the big mainframe manufacturers as their product became less and less relevant over the course of the 1980s and 1990s.

In the face of inexorable improvements in price/performance of clean energy technology, a growing fossil fuel divestment movement, and increased clamor for a price on carbon or other way to tackle climate change, I think we will see more of these deals in the future as the industry contracts and slowly dies. Our goal should be to hasten the death of this industry in order to limit the damage it’s still able to inflict.

Update

This Financial Post article, “Saudi Arabia was worried about a danger much bigger than shale when it blindsided oil markets“, supports much of what I say here. The Saudis are worried about the peak and then decline of demand for oil, in part because of its replacement by clean energy. If anything I think they’re not paranoid enough.

It’s unfortunate that a pilot died, but it’s good that a Virgin Galactic rocket launch failed and crashed.

Virgin Galactic’s whole purpose is to start a new industry: space tourism. Many people have paid $200K and up to get a seat on a short space flight.

First of all, such luxury indulgences are obscene in a world where so many lack the most basic necessities.

But even more glaringly, we are faced by the urgency of climate change. It is criminal to invent a new industry that requires truly obscene amounts of energy based on fossil fuels at a time when we need to rapidly and drastically scale down the use of such fuels.

The Virgin Galactic program should be shut down; if Richard Branson won’t do it, governments should outlaw it. If they won’t do it, people should pressure potential customers to boycott it, and should engage in direct action to shut it down. All of the capital put into Virgin Galactic should be put into ramping up wind and solar energy and energy efficiency programs.

Early in the morning on Thursday, September 4th, 2014, eight people locked down to the gates of a crude-by-rail facility owned by Kinder Morgan in Richmond and prevented trucks from coming or going for three hours. Later that afternoon, two of the organizers (one of whom was me) were interviewed on Andrés Soto’s half-hour show on KPFA, in which we talked about the action, the dangers of crude-by-rail, and the context of the larger climate movement. The transcript is below.

But first, a great overview video:

Blockade the Bomb Trains! Lockdown at Kinder Morgan 4 Sept 2014 from Peter Menchini on Vimeo.

El Show de Andrés Soto on KPFA 3:30pm, Thursday, September 4th, 2014

Here’s the full audio – about half an hour.

Transcript of El Show de Andrés Soto on KPFA Thursday, September 4th, 2014

[Music and intro up to 00:38.]
Andrés: This is El Show de Andrés Soto, formerly of the Morning Mix.

Crude-by-rail. The Bay Area’s been targeted for dangerous Bakken crude deliveries to refineries throughout the Bay Area. There was an important action yesterday in Everett, Washington, to halt crude-by-rail and one this morning in Richmond. There’s also a critical court hearing in San Francisco tomorrow to stop the Kinder Morgan crude-by-rail operation in Richmond. We will speak with the key organizers of the action in Richmond today and talk about all of the events and activities, today on El Show de Andrés Soto on KPFA 94.1 FM, sometimes the people’s radio station. All of this and some very cool music.

Continue reading “Kinder Morgan lockdown interview and transcript” →

The president of WSPA (the Western States Petroleum Association – a fossil fuel lobbying group), somehow got this nonsense published in the San Francisco Chronicle the other day.

The next day there was a great letter to the editor, which I reproduced here:

When elves can deliver oil

Reading the piece by the president of the Western States Petroleum Association (“America’s energy renaissance,” Open Forum, April 8) made me wish I lived in the alternate reality of PR spin that she was describing, where little railcar explosions that level towns only happen in the land of Sillytown and Whoopsyville and never anywhere near you.

All this wonderful black gold comes from magical fracked wells in the Midwest to make things better and better, and it gets delivered by whistling elves with rainbows across the sky overhead. Yes, this does seem a wonderful place to live.

Adam Knowles, San Francisco

I had to write in myself. I don’t know if it will get published, but here it is:

It’s hard to top Tuesday’s letter from Adam Knowles, but I would like to add one point concerning the self-serving op-ed from the president of the Western States Petroleum Association. One of the reasons so many of us are adamantly opposed to crude-by-rail is its ability to bring in Canadian tar sands – one of the dirtiest fossil fuels, with very high emissions that cause climate change.

Moving to safe, sane, clean energy is the path to true energy security and is the only course of action that can be called “responsible”.