nationalization

By Alan Fisher - The Armchair Urbanist, November 7, 2020

By Sean Sweeney - New Labor Forum, August 2020

Once on the margin of the margins, calls for the nationalization of U.S. fossil fuel interests arebgrowing. Before the Covid-19 pandemic, the basic argument was this: nationalization could expedite the phasing out fossil fuels in order to reach climate targets while ensuring a “just transition” for workers in coal, oil, and gas. Nationalization would also remove the toxic political influence of “Big Oil” and other large fossil fuel corporations. The legal architecture for nationalization exists—principally via “eminent domain”—and should be used.

But the case for nationalization has gotten stronger in recent months. The share values of large fossil fuel companies have tanked, so this is a good time for the federal government to buy. In April 2020, one source estimated that a 100 percent government buyout of the entire sector would cost $700 billion, and a 51 percent stake in each of the major companies would, of course, be considerably less. However, in May 2020 stock prices rose by a third or so based on expectations of a fairly rapid restoration of demand.

But fears of a fresh wave of Covid-19 outbreaks sent shares tumbling downward in June. Nationalizing oil and gas would be a radical step, but this alone would not be enough to deliver a comprehensive energy transition that can meet climate goals as well as the social objectives of the Green New Deal. Such a massive task will require full public ownership of refineries, investor-owned utilities (IOUs), and nuclear and renewable energy interests.

Progressives may feel it’s unnecessary to go that far; why not focus on the “bad guys” in fossil fuels and leave the “good guys” in wind, solar, and “clean tech” alone? But this is not an option. The neoliberal “energy for profit” model is facing a full-spectrum breakdown, and the energy revolution that’s required to reach climate targets poses a series of formidable economic and technical challenges that will require careful energy planning and be anchored in a “public goods” approach. If we want a low carbon energy system, full public ownership is absolutely essential.

By Ezra Silk - The Climate Mobilization, July 2020

“Civilization is on the verge of collapse due to climate change, income inequality and ecological overshoot. Our political system is in the hands of a tiny elite class profiting off this triple crisis, and too oblivious to slam the brakes on the system before it all comes crashing down.

“Ordinary people must form a nonviolent movement to spark the just emergency transition we need to save our children and avert total collapse. Armed with the truth, people won’t stay scared and passive. They will rise up to reclaim honor and dignity, going all in to fight for all life.

“This is our social movement strategy in a nutshell. To find out how it all works, read our Blueprint for a Climate Emergency Movement: a plan for how we can escalate and win the fight for the emergency transition we need.

“This is a general plan for how this movement could operate, grow and succeed in any political context. The exact timing or mechanism of change is impossible to predict given current levels of political and climatic volatility. Movements grow nonlinearly and can scale up rapidly when they catch the popular imagination, and we will constantly be on the lookout for ways to move even faster….”

Read the text (PDF).

Robert Pollin interviewed by C.J. Polychroniou - Truthout, June 26, 2020

The COVID-19 pandemic’s impact on the economy provides a golden opportunity for creating a fairer, more just and sustainable world as it shatters long-held assumptions about the economic and political order. Its impact on the energy industry in particular can boost support for tackling the existential threat of global warming by raising the prospect of nationalizing and eventually dismantling fossil fuel producing companies, a position argued passionately by one of the world’s leading progressive economists, Robert Pollin, distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts at Amherst.

C.J. Polychroniou: It has been argued by many that the coronavirus pandemic is a game changer for numerous industries, and could change the way we work and the way we use energy. We could also see the possible return of the social state and thus the end of austerity. First of all, are there any comparisons to be made between the current health and economic crises and what took place during the Great Depression?

Robert Pollin: There is one big similarity between the economic collapse today and the 1930s Great Depression. That is the severity of the downturns in both cases. The official U.S. unemployment rate coming from the Labor Department as of May 2020 was 13.3 percent. But a more accurate measure of the collapsing job market is the number of workers who have applied for unemployment insurance since the lockdown began in mid-March. That figure is 44 million people, equal to about 27 percent of everyone in the current U.S. labor market, employed or unemployed. By contrast, during the Great Recession of 2007-09, official unemployment peaked, and for one month only, at 10.0 percent.

By Russ Christianson - The Bullet, September 22, 2019.

It is a tragic irony that General Motors (GM) chose its hundredth anniversary in Oshawa to announce the December 2019 closure of its Oshawa assembly plant. This means the loss of over 15,000 jobs in Ontario: 2,200 GM assembly jobs, 300 salaried positions, 500 temporary contract positions, 1,000 inside and 1,000 outside supplier jobs, and a related 10,400 multiplier jobs. The closure of Oshawa’s assembly plant is estimated to decrease Ontario’s GDP by $4-billion per year until 2030, also reducing federal and provincial revenues by about $1-billion a year.¹

Over the months following the November 26, 2018 plant closure announcement, GM and Unifor (formerly the Canadian Auto Workers’ union) negotiated the Oshawa Transformation Agreement (May 2019)² that promises:

• 300 stamping and parts assembly jobs and a $170-million investment.
• Donating the 87-acre Mclaughlin Bay Reserve to the City of Oshawa.
• A 55-acre test track for autonomous vehicles.

It has yet to be seen, whether GM will keep its promise. But even if they do, it will still mean losing over 13,000 jobs and a major hit to the economy.

This preliminary feasibility study offers an alternative. The Government of Canada can provide the leadership to acquire the GM Oshawa assembly plant and repurpose the production to building battery electric vehicles (BEVs). There is a strong business case for this alternative, based on a triple bottom line analysis that considers the economic, social and environmental benefits:

• A public investment estimated at $1.4 to $1.9-billion to acquire and retool the Oshawa assembly plant for BEV production, and potentially manufacturing other products.
• Manufacturing and selling an estimated 150,000 BEVs in the first five years of production, for total sales of $5.8-billion.
• Estimated government procurement of one quarter of the BEVs produced in the first four years, representing about 23,000 vehicles with an estimated value of $900-million.
• Reaching a breakeven point in year 4, and making a modest profit in year 5.
• Creating over 13,000 jobs: up to 2,900 manufacturing-related (including 600 parts supplier jobs) and over 10,000 multiplier jobs.
• Decreasing CO2 emissions by 400,000 metric tonnes by year 5.

By Richard Halsey, Neil Overy, Tina Schubert, Ebenaezer Appies, Liziwe McDaid and Kim Kruyshaar - Project 90 by 2030, September 19, 2019

A just transition (JT) is a highly complex topic, where the overall goal is to shift to systems that are better for people and the planet, and to do so in a fair and managed way that “leaves no one behind”. A JT is about justice in the context of fundamental changes within the economy and the society.

Both of these areas are extremely contested, consensus is hard to achieve, and people are generally resistant to change. A JT confronts “business as usual” and threatens powerful vested interests in certain economic sectors. In recent years, a vast amount of literature on the subject has been published, and in South Africa the conversation has picked up pace. The urgency of acting now is indisputable.

While a JT can apply to many sectors and industries, this publication focuses on energy. In addition to being a major contributor to climate change, environmental damage and impacts on human health, the energy sector (particularly Eskom), is facing significant challenges in South Africa. We fully acknowledge that energy is linked to other sectors such as transport, agriculture, water and land use, and that a just energy transition (JET) is a part of a wider JT. While the focus of this report is on one sector, we do so recognising that it is linked to other parts of a larger system in many ways.

Our approach was to look at what we can learn from international experience, to combine that with what has already been done in South Africa, and to make recommendations about how to move forward. This publication focuses on the shift from coal to renewable energy (RE), mainly for electricity generation. We are well aware that a movement away from fossil fuels (coal, oil and gas) is far more than just moving from coal to RE, but as discussed in Chapter 3, this particular transition is the obvious starting point in South Africa. The lessons and recommendations presented here can also be adapted to other fossil fuel sectors. While the focus of this study is on coal, a big picture perspective of the energy system is crucial. South Africa must adopt an integrated planning approach, for energy and other sectors.

Read the text (PDF).

By Carla Santos Skandier - ROAR, August 15, 2019

No other generation understands better the implication of climate change than today’s teens. As sixteen year-old Swedish activist Greta Thunberg has famously summarized it, “this is an emergency.” But despite this emergency, the response from national governments has been to hype up the private sector as the silver bullet capable of providing the financial means and innovations needed to address climate change — even when the private sector itself is pointing out it can neither fund the massive costs nor create the technological breakthroughs necessary to do the job at the pace and scale required.

Fossil fuel companies are the enemy

Over the past few months a handful of US politicians, spurred by a youth-led climate mobilization, have started to wrap their heads around of what it will actually take to mitigate the worst impacts of climate change in the country. This has led to the introduction of the Green New Deal Resolution back in February, and the recently proposed Climate Emergency Resolution.

Despite their different purposes, the proposed resolutions agree in one aspect of the climate fight; if we are to successfully transform our energy system in the next decade mobilization efforts will need to resemble those taken during World War II.

But let’s be clear about how WWII was fought in political-economic terms: when the private sector got in the way of defeating fascism, it was removed from the equation. If we want to win our fight against the fossil fuel industry, we need to center a similar commitment to nationalization.

It is well documented that in both World Wars the US government did not shy away from seizing the control of industries deemed crucial to the war efforts. This included the nationalization of the railroad system, telegraph, telephone and radio networks and manufacturers in World War I, in addition to coal mines, oil companies and refineries, and even a department store in World War II.

But nationalization initiatives did not stop there. In fact, the US nationalized what it considered “enemy” companies — US subsidiaries of German and Japanese companies, such as Merck & Co. If we were to translate those actions to today’s fight to keep any global temperature increase within the 1.5 Celsius limit, that means gaining control over companies that continuously work against climate safety in the country. In other words, fossil fuel companies are the enemy, and we need to treat them as such.

By Daniel Aldana Cohen, Kate Aronoff, Alyssa Battistoni, and Thea Riofrancos - Common Wealth, 2019

Climate politics are today bursting to life like never before. For four decades, market fundamentalists in the United States and United Kingdom have blocked ambitious efforts to deal with the climate crisis. But now, the neoliberal hegemony is crumbling, while popular climate mobilisations grow stronger every month. There has never been a better moment to transform politics and attack the climate emergency.

When the climate crisis first emerged into public consciousness in the 1980s, Margaret Thatcher and Ronald Reagan were consolidating a neoliberal doctrine that banished the most powerful tools to confront global heating— public investment and collective action.

Instead, neoliberals sought to free markets from democratically imposed constraints and the power of mass mobilisation. Thatcher insisted that there was no alternative to letting corporations run roughshod over people and planet alike in the name of profit. Soon, New Democrats and New Labour agreed. While the leaders of the third way spoke often of climate change, their actual policies let fossil capital keep drilling and burning. Afraid to intervene aggressively in markets, they did far too little to build a clean energy alternative.

Then the financial crisis of 2008 and the left revival that exploded in its wake laid bare the failures of the neoliberal project. An alternative political economic project is now emerging—and not a moment too soon. As the Intergovernmental Panel on Climate Change put it, keeping global warming below catastrophic levels will require “rapid, far-reaching and unprecedented changes in all aspects of society.” In other words: public investment and collective action.

Fortunately, movements on both sides of the Atlantic have been building strength to mount this kind of alternative to market fundamentalism. On the heels of Occupy Wall Street and Black Lives Matter, Bernie Sanders’s 2016 Democratic primary campaign breathed new life into the American left and its electoral prospects. Jeremy Corbyn’s election as leader of the Labour Party, spurred by a vibrant grassroots mobilisation, gives those of us in the U.S. hope: if New Labour could give way to Corbynism, surely Clintonism can give way to the left wing of the Democratic party. In the U.K., drawing on tactics from the Sanders campaign, Momentum has developed a new model of mass mobilisation to transform a fossilised political party. It’s restoring the dream that formal politics can be a means for genuinely democratic political organising. In turn, U.S. leftists are learning from Momentum’s innovations.

The vision of the Green New Deal that has taken shape in the United States in the past few months is in many ways a culmination of the U.S. left’s revival. The Green New Deal’s modest ambition is to do all that this moment requires: decarbonise the economy as quickly as humanly possible by investing massively to electrify everything, while bringing prodigious amounts of renewable power online; all this would be done in a way that dismantles inequalities of race, class and gender. The Green New Deal would transform the energy and food systems and the broader political economy of which they are a part.

Read the report (PDF).

By Johanna Bozuwa and Carla Skandier - Truthout, June 26, 2018

Recently, President Trump launched his latest scheme to keep imperiled coal and nuclear plants kicking. According to a memo obtained by Bloomberg News, the Department of Energy (DOE) plans to use Cold War-era authorization to require grid operators to buy energy generation from “at-risk” coal and nuclear facilities. News reports have breathtakingly referred to this plan as “nationalization.” In reality, it is just another bailout of a failing private industry.

Just a few months ago, energy regulators denied the Trump administration’s efforts to modify energy markets to benefit coal and nuclear power in the name of grid reliability. The administration is now seeking to use broad powers given to the president in the 68-year-old Defense Production Act to override those decisions. The Act allows the president to either nationalize vital companies or require purchasers to contract with them in order to avert a national security catastrophe.

Trump’s plan uses his authority under this Act to require grid operators to buy enough energy from the plants to stop any “further actions toward retirements, decommissioning, or deactivation” for two years while the DOE conducts additional grid resilience studies.

The circulated DOE memo argues that coal and nuclear power plants secure grid resilience because they store fuel on site, unlike renewables or gas (a claim disputed by grid regulators), and “too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement.” Therefore, the administration insists, the federal government must manage the decommissioning and “stop the further premature retirements of fuel-secure generation capacity.”

This is crony capitalism at its worst. The proposal was actually put forth by FirstEnergy, a for-profit electric utility in Ohio, in a thinly veiled attempt to get the government to subsidize its failing business model. Unable to compete with increasingly cheaper, cleaner sources of energy such as renewables, energy corporations like FirstEnergy are using their political power to extract a public bailout.

As was the case with the big Wall Street banks 10 years ago, this plan once again exposes the dangerous myth of the supposed superiority of free markets and for-profit, corporate forms of ownership. In reality, corporations have long known that in US capitalism, they can extract as much profit as possible when times are good and rely on the government to protect them against losses when the going gets rough.