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There May Be No Choice but to Nationalize Oil and Gas—and Renewables, Too

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.

It’s Time to Nationalize the Fossil Fuel Industry

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.

A Pathway to a Regenerative Economy

By various - United Frontline Table, June 2020

The intersecting crises of income and wealth inequality and climate change, driven by systemic white supremacy and gender inequality, has exposed the frailty of the U.S. economy and democracy. This document was prepared during the COVID-19 pandemic which exacerbated these existing crises and underlying conditions. Democratic processes have been undermined at the expense of people’s jobs, health, safety, and dignity. Moreover, government support has disproportionately expanded and boosted the private sector through policies, including bailouts, that serve an extractive economy and not the public’s interest. Our elected leaders have chosen not to invest in deep, anti-racist democratic processes. They have chosen not to uphold public values, such as fairness and equity, not to protect human rights and the vital life cycles of nature and ecosystems. Rather, our elected leaders have chosen extraction and corporate control at the expense of the majority of the people and the well-being and rights of Mother Earth. Transforming our economy is not just about swapping out elected leaders. We also need a shift in popular consciousness.

There are moments of clarity that allow for society to challenge popular thinking and status quo solutions. Within all the challenges that this pandemic has created, it has also revealed what is wrong with the extractive economy while showcasing the innate resilience, common care, and original wisdom that we hold as people. Environmental justice and frontline communities are all too familiar with crisis and systemic injustices and have long held solutions to what is needed to not only survive, but also thrive as a people, as a community, and as a global family. We cannot go back to how things were. We must move forward. We are at a critical moment to make a downpayment on a Regenerative Economy, while laying the groundwork for preventing future crises.

To do so, we say—listen to the frontlines! Indigenous Peoples, as members of their Indigenous sovereign nations, Asian and Pacific Islander, Black, Brown and poor white marginalized communities must be heard, prioritized, and invested in if we are to successfully build a thriving democracy and society in the face of intersecting climate, environmental, economic, social, and health crises. A just and equitable society requires bottom-up processes built off of, and in concert with, existing organizing initiatives in a given community. It must be rooted in a people’s solutions lens for a healthy future and Regenerative Economy. These solutions must be inclusive—leaving no one behind in both process and outcome. Thus, frontline communities must be at the forefront as efforts grow to advance a Just Transition to a Regenerative Economy.

A People’s Orientation to a Regenerative Economy offers community groups, policy advocates, and policymakers a pathway to solutions that work for frontline communities and workers. These ideas have been collectively strategized by community organizations and leaders from across multiple frontline and grassroots networks and alliances to ensure that regenerative economic solutions and ecological justice—under a framework that challenges capitalism and both white supremacy and hetero-patriarchy—are core to any and all policies. These policies must be enacted, not only at the federal level, but also at the local, state, tribal, and regional levels, in US Territories, and internationally.

Read the text (PDF).

Resilient Societies or Fossil Fuel Bailouts?

By staff - Oil Change International - April 22, 2020

The COVID-19 crisis poses a threat to people’s health, their jobs and their lives, and like all crises, exacerbates already existing inequalities. Trillions in public finance will be needed to get through the current pandemic. This briefing outlines why continuing to rely on fossil fuels, in particular oil and gas, is not compatible with long-term recovery. It does not make sense to use the COVID-19 stimulus packages to try to revive a sunsetting industry which will not deliver on economic recovery, only to shut it down a few years later to meet climate goals.

Governments now face a choice: fund a just transition away from fossil fuels that protects workers, communities, and the climate — or continue funding business-as-usual toward climate disaster. Governments should invest in a green recovery that protects and creates long lasting jobs, resilient economies and accelerates climate action. This briefing details why this is the most effective route for recovery and lays out the dos and don’ts for governments in their response to the current crisis.

Key Recommendations (DO’s):

  • Ensure national and international equity and a just transition is at the heart of any government response to the current crisis.
  • Protect workers and communities affected by the crisis, including those in the oil and gas sector, and create long-lasting green jobs by investing in resilient infrastructure and emerging low carbon industries that will continue to create jobs for decades.
  • Ensure Green New Deal frameworks provide the basis for stimulus packages to help rewrite the social contract in a people-centered response to the current crisis. 
  • End fossil fuel subsidies and finance and ensure any carbon price reflects climate and equity imperatives in order to ensure renewables remain competitive and incentivize efficient energy use in light of low oil prices while supporting a just transition.
  • Introduce oil and gas production caps as a first step to limiting emissions. The world is running out of storage capacity and production limits are needed to ensure a managed decline of the industry.
  • Make decision-making processes and response measures transparent in order to allow public scrutiny.
  • Bring the oil and gas industry into public ownership in the right circumstances, as it may be the most straightforward path to ensure a just transition for workers and communities and a managed phase-out.
  • Link any support provided to the industry to a requirement to align with climate goals and plan for a managed decline.
  • Ensure the polluter pays principle is upheld. Broadly speaking, over the past few decades, the financial rewards of the industry have been privatized, while the risks have been socialized.

Key Pitfalls to Avoid (DON’Ts):

  • DON’T bail out oil and gas companies or increase fossil fuel subsidies.
  • DON’T bail out other polluting industries, such as the aviation and shipping industries.
  • DON’T continue the construction or operation of fossil fuel infrastructure at the expense of the health of workers and communities.
  • DON’T roll back existing policies or regulations, or extend licensing agreements.
  • DON’T delay responses to the climate crisis amid the flurry of immediate priorities. If anything, the current pandemic has shown that a crisis demands a timely response to prevent it from escalating further.

While the fossil fuel sector may struggle to return to business as usual, without policies aimed at emerging from the crisis with a cleaner energy system, surviving companies may be in a position to capitalize on rising oil prices as the cycle turns. There are currently no safeguards against a future price spike and subsequent return to the volatile boom-bust cycle. This briefing advises governments to adopt recovery measures that will ensure a just transition off oil and gas, accelerate climate goals and build resilient societies, and center people instead of corporate executives and shareholders — all while tackling today’s parallel health, economic, and climate crises at once.

Read the report (PDF).

Take the Plant Save the Planet (pamphlet)

By Green Jobs Oshawa - Socialist Project, March 22, 2020

On November 26, 2018, General Motors announced a number of plant closures in North America, the largest of which was in Oshawa, Ontario. The Oshawa facility, once the largest auto complex on the continent, was to end all its assembly operations by the end of 2019.

The issue is not simply a matter of bringing the environmental movement and the labour movement together; each must be transformed if the sum is to be more than the currently limited parts. The environmental movement must raise itself to a new level by concretely engaging the working class and the labour movement must escape what for it has become an existential crisis. The threats and opportunities of the environmental crisis offer a chance for labour revival, but only if this incorporates a renewed approach to organizing, struggle, radical politics, and the maximization of informed membership participation.

Read the report (PDF).

Regenerative & Just 100% Policy Building Blocks Released by Experts from Impacted Communities

By Aiko Schaefer - 100% Network, January 21, 2020

The 100% Network launched a new effort to bring forward and coalesce the expertise from frontline communities into the Comprehensive Building Blocks for a Regenerative and Just 100% Policy. This groundbreaking and extensive document lays out the components of an 100% policy that centers equity and justice. Read the full report here.

Last year 100% Network members who are leading experts from and accountable to black, indigenous, people of color (BIPOC) and frontline communities embarked on a collective effort to detail the components of an ideal 100% policy. The creation of this 90-page document was an opportunity to bring the expertise of their communities together.

The Building Blocks document was designed primarily for frontline organizations looking to develop and implement their own local policies with a justice framework. Secondly, is to build alignment with environmental organizations and intermediary groups that are engaged in developing and advocating for 100% policies. The overall goals of the project are to:

  • Build the capacity of BIPOC frontline public policy advocates, so that impacted community groups who are leading, working to shape or just getting started on 100% policy discussions have information on what should be included to make a policy more equitable, inclusive and just
  • Align around frontline, community-led solutions and leadership, and create a shared analysis and understanding of what it will take to meet our vision for 100% just, equitable renewable energy.
  • Create a resource to help ensure equity-based policy components are both integrated and prioritized within renewable energy/energy efficiency policies. 
  • Build relationships across the movement between frontline, green, and intermediary organizations to create space for the discourse and trust-building necessary to move collaboration forward on 100% equitable, renewable energy policies. 

Take the Plant, Save the Planet (article)

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.

Energy commons: from energy transition to climate justice

By Cécile Blanchet - ROARMag, June 19, 2019

In 2019, only oil lobbyists and shabby orange politicians persist in denying the influence of human activities on the Earth’s climate. Scientific evidence is piling up and we know that we must change our ways. The concept of energy transition has become mainstream.

However, governments have remained remarkably motionless. They are so inactive that kids have started school strikes and demand climate justice in front of the United Nations’ Conference of Parties. They are so immobile that citizen groups actually sue their governments for their lack of climate action. And when governments attempt to do something, it is so unjust that people take to the streets even during the coldest months of the year, screaming, filled with rage and frustration.

Our leaders have forgotten that the poorer half of our societies should not have to clean up the mess produced by the richest half. That it should not be our kids cleaning up our mess.

Doing It Ourselves

Facing a lack of political will, an interesting and vivid grassroots movement has taken shape to reclaim our energy systems. From households to city politics, and even at the European level, there has been an unprecedented involvement from the public into energy and electricity matters. For example, in the shape of energy cooperatives.

According to the European Federation of renewable energy cooperatives, RESCOOP, there are at present some 1,250 energy communities in which a million people throughout Europe are involved. Through the RESCOOP federation, these groups actively lobby at a European level to bend the legislation towards promoting and supporting energy cooperatives.

This model of energy cooperativism originated in Germany in the late 1990s and was enabled by a set of disruptive laws supporting the production of renewable energy. This bill kick-started the German energy transition (dubbed “Energiewende”), which has become a landmark and is being widely copied.

The two main pillars were defined in the Feed-In Act of 2000: the priority of renewable sources to the grid and feed-in tariffs (fixed prices paid for renewable energy).

The particularity of this framework is that it has enabled small players to enter the game. Citizen cooperatives and households have especially benefited, because a fixed price for each kilowatt hour (KWH) could be sold back to the grid, which gave them more space to invest in new technologies.

From the late 1990s onwards, the number of cooperatives in Germany has grown exponentially, reaching 900 in 2019, representing the majority of energy cooperatives in Europe. It is a model that comes with many advantages. Let’s virtually visit one of these cooperatives together.

Public Finance for the Future We Want (Lavinia Steinfort and Satoko Kishimoto)

By Lavinia Steinfort and Satoko Kishimoto (editors) - Transnational Institute, June 2019

Do you wish to see regenerative, equitable and democratic economies, built with collective power? We believe it is not only necessary but also very possible.Today’s economic system, fueled by an extractivist logic and prone to crises, has reignited and enflamed old monsters of racism, misogyny and other forms of fear and hate. Economic alternatives are needed now more than ever.

This book is about financial alternatives, drawn from real-world examples. It highlights the kinds of models that could become the new normal, building the basis for a democratically organized and life-sustaining future.Before the 2008 global financial crisis, the mantra was ‘there is no alter-native’ to the extractive economic model that has fostered excessive inequality and ecological destruction. Post-crisis, big banks were rescued and the blame misdirected to public spending.

This justified evermore harsh austerity measures, reinforcing the story that the public sector must rely on private finance to solve these ‘collaterals’.More than 10 years later, we know that private finance has not only failed to address these problems, it has intensified them. Civil society needs to unite behind systemic solutions before another financial bubble bursts.

Read the report (PDF).

Energy Democracy: Taking Back Power

By Johanna Bozuwa - Next System Project, February 27, 2019

Executive summary

Electric utility (re)municipalization is gaining popularity as a strategy to shift away from a reliance on fossil fuel extraction in the context of combating climate change. Across the world—from Berlin to Boulder—communities have initiated campaigns to take back their power from investor-owned (private) utilities and create publicly owned and operated utilities. Moreover, such efforts are increasingly taking on the perspective and language of energy democracy.

Energy democracy seeks not only to solve climate change, but to also address entrenched systemic inequalities. It is a vision to restructure the energy future based on inclusive engagement, where genuine participation in democratic processes provides community control and renewable energy generates local, equitably distributed wealth (Angel, 2016; Giancatarino, 2013a; Yenneti & Day, 2015). By transitioning from a privately- to a publicly owned utility, proponents of energy democracy hope to democratize the decision-making process, eliminate the overriding goal of profit maximization, and quickly transition away from fossil fuels.

Utilities are traditionally profit-oriented corporations whose structures are based on a paradigm of extraction. Following the path of least resistance, they often burden communities who do not have the political or financial capital to object to the impacts of their fossil fuel infrastructure. Residents living within three miles of a coal plant, for instance, are more likely to earn a below-average annual income and be a person of color (Patterson et al., 2011); similar statistics have been recorded for natural gas infrastructure (Bienkowski, 2015).

These utilities are in a moment of existential crisis with the rise of renewables. From gas pipelines to coal power plants, their investments are turning into stranded assets, as political leaders and investors realize that eliminating fossil fuels from the energy mix is paramount to creating healthy communities and stemming climate change.

Unfortunately, often publicly owned utilities in the United States have similar energy generation profiles to their privately owned counterparts (American Public Power Association, 2015). This paper explores the extent to which publicly owned utilities are reticent to take on the new energy paradigm and evaluates their ability to provide energy democracy compared to investor-owned utilities.

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