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Phasing Out Fossil Fuels: A Just Transition in the Oil & Gas Drilling and Refining Sectors

Decommissioning California Refineries and Beyond Workshop

Big Oil Reality Check

By David Tong, et. al. - Oil Change International, September 2020

As oil and gas companies claim to be part of the solution of the climate crisis, the reality couldn’t be more different. Our new discussion paper analyzes the current climate commitments of eight of the largest integrated oil and fossil gas companies, and reveals that none come close to aligning their actions with the urgent 1.5°C global warming limit as outlined by the Paris Agreement.

This discussion paper measures oil and gas company climate plans against ten minimum criteria, focusing on the ambition, integrity, and ability necessary to implement a just transition and achieve a 1.5°C aligned managed decline of oil and fossil gas. Focusing on the oil majors, BP, Chevron, Eni, Equinor, ExxonMobil, Repsol, Shell, and Total, we find that only one company has committed to cutting oil and gas production over the next decade, and even that pledge (BP’s stated commitment to cut production by 40% by 2030) excludes around a third of the oil and gas it invests in extracting via its major share in oil giant Rosneft. Below is a summary table of these criteria included in the discussion paper.

Read the text (PDF).

Toxic Relationship: How refineries affect climate change and racial and economic injustice

By Jean Tepperman - East Bay Express - July 22, 2020

California should begin gradually reducing output from its oil refineries in order to avoid climate catastrophe and to make the transition to clean energy as equitable as possible. That's the conclusion of a major new report released July 6 by Communities for a Better Environment (CBE), endorsed by more than 40 environmental and social justice organizations.

While most people agree on the need to use less fossil fuel, many fear that requiring refineries to reduce production could lead to higher gasoline prices and a big economic hit for workers and communities that depend on refineries for income. Report-author Greg Karras responded, "If we start now, doing it gradually, it will give us the time to replace refinery-dependent economics." The report calls for cutting production 4 to 7 percent a year, starting in 2021.

California has set targets for cutting carbon emissions between now and 2050: the state's share of global cuts needed to keep temperature increases below catastrophic levels. Because the carbon that causes climate change builds up in the atmosphere, California has a carbon "budget"—the total amount it can emit from now until 2050. According to Decommissioning California Refineries, California will have to refine much less oil per year to avoid blowing through this carbon "budget" by about 2037.

"California is the biggest oil-refining center in Western North America," Karras said. "Oil refined here emits more carbon than all other activities in the state combined." Even if all other sources of carbon are reduced on schedule, Karras said, "we must refine much less oil if we hope to meet the state's carbon limit."

"We have to break free from our toxic relationship with oil before it takes us over a cliff," Karras said. "When you're in a car heading toward a cliff, it matters when you start putting on the brakes."

The sooner we start, the more likely we are to escape the worst impacts of climate change.

The issue is not just climate, said Andres Soto of CBE. He pointed out that refinery pollution is concentrated in communities like Richmond, centers of racial and economic injustice.

"Only 20 percent of Richmond is Euro-American," he said.

And the health consequences of having a refinery as a neighbor are severe.

Rodeo, another Contra Costa refinery town, "is in the 98th percentile for asthma," said resident Maureen Brennan, and it has high rates of skin disease, autoimmune disease and cancer—all linked to refinery-generated pollution.

Retired refinery worker Steve Garey, past president of a United Steelworkers local in Washington state, said starting now to plan for reduced refinery production could actually benefit refinery workers, since "the movement away from fossil fuels and toward renewables is going to accelerate. It's an economic reality. Renewables are cheaper than fossil fuel and getting cheaper all the time."

Recently when the pandemic cut demand for gasoline, Garey said, the Marathon refinery in Martinez shut down, leaving the workers and community stranded.

The current drop in oil use, Karras said, gives us a once-in-a-lifetime opportunity to turn away from the cliff and build a cleaner and more equitable recovery.

Decommissioning California Refineries: Climate and Health Paths in an Oil State

By Greg Karras - Communities for a Better Environment, July 2020

Machines that burn oil are going away. We will burn much less oil, either to prevent the increasing accumulation of pollution impacts that could cause the collapse of human societies as we know them, or as a footnote to the collapse of our societies and economies on which the petroleum fuel chain now feeds. Which path we take matters.

Sustainable energy technologies that are proven, available now, and obviously more economic than societal collapse could replace oil and other fossil fuels. But critical oil infrastructure, permitted mainly in working class communities and communities of color, is still growing. Environmental, economic, and racial injustice weaken societal capacity to break free of this toxic path. Societal capacity to organize—political feasibility—has emerged as the primary barrier to solving our existential pollution crisis.

California has this problem. It hosts the largest oil refining center in western North America. It has the worst air pollution in the nation, and yet it has allowed its oil sector’s critical infrastructure to grow in low-income communities of color, where this pollution is disparately severe compared with the state average. It uses pollution trading—the exchange of money for permits to pollute—leaving communities largely on our own to fight refinery and oil terminal expansion projects.

Communities rose up to stop tar sands projects in many inspiring efforts that for a decade have held to a trickle the flood of cheaper, dirtier oil that refiners sought. But some projects slipped through. The petroleum fuel chain emits more carbon from extracting, refining, and burning fuels made from the oil refined in California than all other activities in the state combined, and as other emissions have begun to decline, its emissions have not.

In fact its emissions increased from 2013–2017 as refiners here increased production for exports that sold for more money than the entire oil sector spent on permits to emit under the state’s carbon trading scheme. They could do that because no refiner faced any limit on carbon emissions from its plant. They still can because politicians caved in to their demand to make carbon trading the only curb on those emissions. Since 2017, state law has prohibited state air officials from setting a carbon-cutting limit on any oil refining plant under this carbon trading scheme.

Governor Brown argued this law was the best “compromise” that was politically feasible. Yet state climate policy has ignored the need, first voiced by the Oil, Chemical & Atomic Workers Union decades ago, for a mandate that assures workers a just transition. Equally important to political feasibility, communities must predict how fast to transition their job and tax bases from oil to sustainable alternatives. But by letting any polluter delay emission cuts at any time, pollution trading makes it harder to make this very prediction.

Read the report (PDF).

Exposing a Ticking Time Bomb: How fossil fuel industry fraud is setting us up for a financial implosion, and what whistleblowers can do about it

By John Kostyack, Karen Torrent, Laura Peterson, and Carly Fabian - National Whistleblower Center - July 2020

In the past several years, U.S. states, cities, counties and individuals concerned about climate change have filed important lawsuits against fossil fuel companies, asserting that the companies are responsible for climaterelated damage due to their carbon pollution. These cases confront “what might be the greatest scam in history,” in the words of historian Naomi Oreskes: the massive disinformation campaign designed to stall action on climate change by persuading decision makers and the public that it is not a problem to be taken seriously.

In this report, the National Whistleblower Center focuses on a related deception that, with a small handful of notable exceptions, is unaddressed in the climate change lawsuits filed to date: the dramatic understatement of risks posed by climate change to fossil fuel companies’ own financial condition and to the economy at large. We describe an important pathway to ensuring proper disclosures of climate risks: collaborative work by whistleblowers, prosecutors and regulators to enforce anti-fraud laws.

This report is a call to action for executives of fossil fuel companies and others with knowledge of improper accounting and disclosure practices, such as external auditors, to take the steps needed to obtain protected whistleblower status and work with the Securities and Exchange Commission (SEC), other regulators and law enforcement officials to help expose and prosecute fraud. For the first time, legal strategies are provided for whistleblowers and others to expose and prosecute climate risk fraud in the fossil fuel industry. This is also the first report to use the methods of professional fraud investigators to identify fossil fuel industry financial disclosure practices that are likely to be fraudulent.

Climate risks—comprised of “transition risks,” the financial risks to some companies due to the world’s shift away from fossil fuels, and “physical risks,” those associated with climate change- related damage to property— uniquely threaten the finances of fossil fuel companies. Fossil fuel companies, fearful of losing access to investment capital and loans, are therefore highly motivated to conceal their exposure to these risks.

Concealment of climate risks is a matter of great public interest because when it is successful, it harms investors, the environment and the economy. Investors who provide capital to these companies suffer because they invest based on a false sense of the companies’ readiness for the transition to a low-carbon economy and for the physical shocks of climate change. This deception undercuts efforts to address climate change because it slows the shift of investments to businesses developing and deploying low-carbon technologies. It harms the economy by leaving financial institutions such as banks and insurers less prepared for the stresses of rapid asset deflation.

Read the report (PDF).

Winding Down BC's Fossil Fuel Industries: Planning for Climate Justice in a Zero-Carbon Economy

By Marc Lee and Seth Klein - Corporate Mapping Project, March 2020

IMAGINE IT’S 2025 AND BECAUSE OF THE ESCALATING CLIMATE CRISIS, governments in Asia have declared ambitious new climate action plans, including the elimination of metallurgical coal for steel manufacturing within five years, to be replaced by state-of-the-art hydrogen-powered furnaces; and an aggressive transition off of natural gas and toward renewables within a dec-ade. After a short period of time, BC’s fossil fuel exports dry up, workers are laid off and local communities get hit with declines in both public- and private-sector jobs due to falling incomes.

It is this type of scenario that needs to inform planning for BC’s fossil fuel industries (coal, oil and gas). This report’s framework for a managed wind-down aspires to thoughtfully and strategic-ally phase out the extraction and production of fossil fuels in BC, most of which are exported and burned elsewhere.

The BC government’s continued interest in expanding production and export of its fossil fuels suggests little willingness to contemplate a managed wind-down so long as there are external buyers for BC resources. However, there is a risk that market conditions could change abruptly as other jurisdictions implement more aggressive climate policies and importers cut their con-sumption of fossil fuels. Fully phasing out BC’s fossil fuel industries over the next 20 to 30 years may be — for now at least — politically unthinkable. Nonetheless, this report aims to start a necessary conversation in BC. The managed wind-down framework is built on four pillars:

  1. Establish carbon budgets and fossil fuel production limits;
  2. Invest in the domestic transition from fossil fuels and develop a green industrial strategy;
  3. Ensure a just transition for workers and communities;
  4. Reform the royalty regime for fossil fuel extraction.

More than half of BC’s gas production is exported to Alberta for oil sands processing, with additional exports to the United States. Only 9 per cent of production is consumed within BC. Virtually all of the province’s coal is exported, with little domestic consumption. The bulk of production is higher-quality metallurgical coal used in steelmaking as opposed to thermal coal used to generate electricity.

Read the report (PDF).

Fossil Futures: The Canada Pension Plan's Failure to Respect the 1.5-degree Celsius Limit

By James K. Rowe, Steph Glanzmann, Jessica Dempsey and Zoë Yunker - Canadian Centre for Policy Alternatives, November 2019

THE WORLD’S LARGEST PENSION FUNDS comprise over half of global investment capital. The Canada Pension Plan Investment Board (CPPIB) manages one of the country’s largest pools of investments, at $400 billion. How pension funds choose to invest has significant bearing on how we collectively address the climate emergency and the needed energy transition away from fossil fuels. In this report we ask: Is the CPPIB investing with the 1.5-degree Celsius limit on global average temperature rise in mind?

In April 2016, Canada was among 195 countries that signed the Paris Agreement, committing to “holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius.”

Our major finding is that the CPPIB is not investing with the 1.5-degree limit in mind. Within its public equities portfolio, it has over $4 billion invested in the top 200 publicly traded fossil fuel reserve holders (oil, gas and coal). To stay within 1.5 degrees, these companies can extract only 71.4 billion tonnes of carbon dioxide, yet the companies the CPPIB is invested in have 281 billion tonnes in reserve, meaning they have almost four times the carbon reserves that can be sold and ultimately burned to stay within 1.5 degrees. Since reserves are factored into current company valuations, this means the CPPIB has invested billions of dollars in companies whose financial worth depends on overshooting their carbon budget.

This is a moral and ecological failure. It is also a financial risk. As energy generation shifts away from fossil fuels, investors who do not respond could be left with “stranded assets”—investments that are no longer profitable. In its 2019 Financial System Review, the Bank of Canada included climate risk in its analysis for the first time. Canadian fossil fuel companies and their investors are especially exposed to stranded asset risk since the majority of oil produced in Canada is high-cost, carbon-intensive bitumen from the oil sands. And yet, the CPPIB remains exposed to the biggest oil sands majors, with over $1.2 billion invested in Canadian Natural Resources Ltd., Suncor Energy Inc. and Cenovus. Canadian pension beneficiaries may therefore be particularly vulnerable to stranded assets and the financial risks they pose.

Read the report (PDF).

Extractivism and Resistance in North Africa

By Hamza Hamouchene - Transnational Institute, October 2019

Extractivism as a mode of accumulation and appropriation in North Africa was structured through colonialism in the 19th century to respond to the demands of the metropolitan centres. This accumulation and appropriation pattern is based on commodification of nature and privatisation of natural resources, which resulted in serious environmental depredation. Accumulation by dispossession has reaffirmed the role of Northern African countries as exporters of nature and suppliers of natural resources – such as oil and gas- and primary commodities heavily dependent on water and land, such as agricultural commodities. This role entrenches North Africa’s subordinate insertion into the global capitalist economy, maintaining relations of imperialist domination and neo-colonial hierarchies.

The neo-colonial character of North African extractivism reflects the international division of labour and the international division of nature. It is revealed in largescale oil and gas extraction in Algeria and Tunisia; phosphate mining in Tunisia and Morocco; precious ore mining - silver, gold, and manganese - in Morocco; and water-intensive agribusiness farming paired with tourism in Morocco and Tunisia. This plays an important role in the ecological crisis in North Africa, which finds its clear expression in acute environmental degradation, land exhaustion and loss of soil fertility, water poverty, overexploitation of natural resources, pollution and disease, as well as effects of global warming such as desertification, recurrent heat waves, droughts and rising sea levels.

Concurrent with this dynamic of dispossession of land and resources, new forms of dependency and domination are created. The (re)-primarisation of the economy (the deepened reliance on the export of primary commodities) is often accompanied by a loss of food sovereignty as a rentier system reinforces food dependency by relying on food imports, as in the case of Algeria; and/or as land, water and other resources are increasingly mobilised in the service of export-led cash crop agribusiness, as in Tunisia and Morocco. Extractivism finds itself mired in serious tensions, which generates protests and resistance. This paper documents some of these tensions and struggles by analysing activist grassroots work, including the participation in alternative regional conferences and ‘International Solidarity Caravans’ where representative of grassroots organisations, social movements and peasant communities met and travelled together to sites of socio-environmental injustices, providing a space to strategise together and offer effective solidarity to their respective struggles.

The rural working poor and the unemployed in Northern Africa are the most impacted by the multidimensional crisis. Comprising small-scale farmers, near-landless rural workers, fisherfolks and the unemployed, the movements emerging in the five case studies presented here are resisting the looting of their subsoil resources, the despoliation of their lands, pervasive environmental destruction and the loss of livelihoods. The paper asks the following questions: should we see these protests, uprisings and movements as mainly environmental, or are these fundamentally anti-systemic – anti-capitalist, antiimperialist, decolonial and counter-hegemonic protests? Are these circumstantial episodes of resistance, or do they rather represent the latest development in the historical trajectory of class struggle against the latest capitalist offensive in North Africa? The paper presents an assessment of the nature of these movements which grapple with tensions and contradictions that face them.

Read the report (PDF).

Seattle Labor Unions Join Call Saying “Shell No”

By Tom Geiger - Labor Network for Sustainability, June 11, 2015

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

In a strong show of support for a better future, local labor unions have signed a letter to oppose the decision by the Port of Seattle Commission to permit the Shell Oil rig to have safe harbor in our Elliott Bay.

We recognize that other labor unions have a position of support for this Oil Rig here. We respect their decision, but we feel compelled to speak today given the stakes of climate change and the immediate and long term effects that this has on all people in the US and around the world. Shell brought this Rig to our shores; this has catapulted us to the frontlines of climate change and called to question the policies we make as a society to address the global crisis. Would we be taking this position at this moment without this Rig here in our local waters? Probably not. But we would be taking a position soon on Climate Change anyway and this has simply fast-forwarded that historic necessity.

Below is the statement and the list of labor organizations signed onto it:

Unions Say Shell No! 



The following labor unions, which represent over 60,000 workers in various industries across Washington State, declare our opposition to Royal Dutch Shell’s drilling in our Arctic waters and the use of our Port of Seattle’s Terminal 5 as their staging site. We stand alongside the many environmental, faith, social justice and retiree organizations, indigenous peoples and the thousands of individuals who oppose the drilling. We hope that adding our voice encourages others to join the Shell No! Movement. At the same time we declare our support for a strong climate policy at the state, regional and national level to reduce our global warming pollution and ensure that as we reduce this pollution we do so with equitable transition at its core.

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