capital blight

By Elizabeth Bast, Shakuntala Makhijani, Sam Pickard, and Shelagh Whitley - Oil Change International, November 2014

Governments across the G20 countries are estimated to be spending $88 billion every year subsidising exploration for fossil fuels. Their exploration subsidies marry bad economics with potentially disastrous consequences for climate change. In effect, governments are propping up the development of oil, gas and coal reserves that cannot be exploited if the world is to avoid dangerous climate change.

This report documents, for the first time, the scale and structure of fossil fuel exploration subsidies in the G20 countries. The evidence points to a publicly financed bailout for carbon-intensive companies, and support for uneconomic investments that could drive the planet far beyond the internationally agreed target of limiting global temperature increases to no more than 2ºC.

It finds that, by providing subsidies for fossil fuel exploration, the G20 countries are creating a ‘triple-lose’ scenario. They are directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects. They are diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power. And they are undermining the prospects for an ambitious climate deal in 2015.

Read the report (PDF).

By Tom Sanzillo, Lorne Stockman, Deborah Rogers, Hannah McKinnon, Elizabeth Bast, and Steve Kretzmann - Oil Change International, October 29, 2014

The report, “Material Risks: How Public Accountability Is Slowing Tar Sands Development,” presents market analysis and industry data to support its estimates on lost sales revenue to the tar sands industry as public opposition creates delays and project cancellations. The report also describes other market forces that are putting tar sand developers at a growing disadvantage.

The report puts tar sands development lost revenue at $30.9 billion from 2010 through 2013, in part due to the changing North American oil market but largely because of a fierce grassroots movement against tar sands development. The report attributes 55% of the lost revenue, or $17 billion, to the diverse citizen protests against pipelines and the tar sands.

A significant segment of opposition, the report notes, is from First Nations in Canada who are raising sovereignty claims and other environmental challenges.

Among the report’s findings:

• Market forces and public opposition have played a significant role in the cancellation of three major tar sands projects in 2014 alone: Shell’s Pierre River, Total’s Joslyn North, and Statoil’s Corner Project. Combined, these projects would have produced 4.7 billion barrels of bitumen that would in turn have released 2.8 billion metric tonnes of carbon dioxide (CO₂) into the atmosphere. This is equivalent to the emissions of building 18 new coal plants that would last 40 years each.
• Tar sands producers lost $30.9 billion from 2010 through 2013 due to transportation bottlenecks and the flood of crude coming from shale-oil fields. Of that, $17.1 billion, or 55 percent, can be attributed to the impact of public- accountability campaigns.
• The combination of risks facing the industry has the potential for canceling most or even all of the planned expansion of the industry in Canada.
• Rather than seeing more than a doubling of output from 2 million barrels of oil per day to 4.8 million barrels per days — as the industry predicts — the report projects flat production levels.
• Tar sands producers have lagged, with 9 of 10 leading tar sands producers in Canada underperforming the broader stock market in the last five years.

Analysts have recently downgraded their outlook for tar sands production.

The report also explores how smaller tar sands producers are having trouble accessing capital markets, how the industry is increasing capital spending even as it faces declining cash flows, weak revenue expectations, rising production costs and tight margins.

Read the report (PDF).

By Joseph E. Aldy - Common Resources, August 22, 2014

On April 20, 2010, the Transocean Deepwater Horizon suffered a catastrophic blowout while drilling in a BP lease in the Gulf of Mexico’s Macondo Prospect. This accident resulted in the largest oil spill in US history and an unprecedented spill response effort. Due to the ongoing spill and concerns about the safety of offshore oil drilling, the US Department of the Interior suspended offshore deep water oil and gas drilling operations on May 27, 2010, in what became known as the offshore drilling moratorium. The media portrayed the impacts of these events on local employment, with images of closed fisheries, idle rigs, as well as boats skimming oil and workers cleaning oiled beaches.

In a new RFF discussion paper, “The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Drilling Moratorium,” I estimate and examine the net impact of the oil spill, the drilling moratorium, and spill response on employment and wages in the Gulf Coast. The spill and moratorium represented unexpected events in the region, and the resulting economic impacts varied within and among the Gulf states. Coastal counties and parishes were expected to bear the vast majority of the burden of these two events, while inland areas were expected to be largely unaffected. The moratorium was expected to affect Louisiana—with significant support of the offshore drilling industry—but not, for example, Florida, which had no active drilling off of its coastline. Beyond the economic impacts, the timing and magnitude of the spill response varied across the states over the course of the spill as well.

Despite predictions of major job losses in Louisiana resulting from these events, I find that the most oil-intensive parishes in Louisiana experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties south of the Panhandle experienced a decline in employment. Analysis of the number of business establishments, worker migration, accommodations industry employment and wages, sales tax data, and commercial air arrivals likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the non-Panhandle Florida Gulf Coast. The billions of dollars of spill response and clean-up mobilized over the course of the spring and summer of 2010 positively impacted economic activity, similar to the effect of fiscal stimulus. The geographic variation in labor market impacts reflects the focus of spill response efforts in Louisiana and the absence of oil and thus spill response along the Gulf coast of Florida south of the Panhandle.

Read the report (PDF).

By James Ullrich, from the Modern Time Crunch - reprinted in Pyschology Today, March 14, 2014

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.

A phenomenon called “Corporate Stockholm Syndrome” is being observed more and more often in individuals who have experienced workplace trauma, and the concept is beginning to filter into the clinical awareness. This problem deserves some articulation.

Stockholm Syndrome refers to the psychological phenomenon often observed in hostage situations where the hostages start to identify with (and sympathize with) their captor, even though mistreated. The captor controls the life source (food, water, shelter, etc.) of the captive, and punishment/reward is received from the same source: the captor.

Because so much of our self-worth in modern times is defined and derived by work, we are at risk for experiencing Corporate Stockholm Syndrome when put into a certain work environment for long enough. Corporate Stockholm Syndrome can be defined as employees of a business beginning to identify with—and being deeply loyal to—an employer who mistreats them (defined in this situation as verbal abuse, demanding overly long hours, and generally ignoring the wellbeing and emotional needs of the employee). As with the captor/captive dynamic, the employer is certainly in control of the employee’s fate (they sign the much-needed paycheck and generally can terminate employment at any time).

The employee experiencing Corporate Stockholm Syndrome typically displays a tendency to become emotionally attached to the company to the detriment of their own emotional health. The employee will also rationalize to themselves and to others the employer’s poor treatment of them as necessary for the good of the organization as a whole, and angrily defend the employer’s actions when those actions are questioned by an outsider. In other words, denial of the obvious.

The company culture in which Corporate Stockholm Syndrome thrives will have certain traits. It will often tolerate—in fact implicitly encourage—employees to verbally abuse each other when someone isn’t seen as working hard enough or not being a “team player”. The inculcation of the “company culture” is viewed as significantly important by the management. This is aimed at cultivating loyalty to the company while it has no similar loyalty to the emotional wellbeing of the employees.

There will be the occasional company-provided perks, of course, but these will be manipulative by design; a key aspect of inducing Stockholm Syndrome is the more powerful party providing both threats and kindness to the less powerful party. When these come from the same source, the psychological welfare of the lesser party can be more easily controlled.

The worker experiencing these symptoms is at risk for significant emotional trauma. Spending one's days under psychological pressure in such an environment is inherently unhealthy. Moreover, it is unhealthy for that worker’s friends and family members who will inevitably find themselves on the receiving end of misdirected anger, which must find a vent somewhere. Sadly this anger and its venting and usually finds the least powerful and least culpable target.

Breaking the cycle is hard, particularly in a culture that prizes work and wealth over emotional health, but abusers do not deserve loyalty. Peace of mind is too valuable to sell for any price.

By staff - GRAIN, October 7, 2014

Since the global food crisis of 2008, there has been a massive wave of private sector investment in agriculture. More money flowing into agriculture means more innovation, more jobs and more food for a hungry planet, say the G8, the World Bank and corporate investors themselves.

But does it?

Looking at the investments made by Indian billionaire Chinnakannan Sivasankaran – one of the most active private sector players in the global rush to acquire farmland – a worrying picture emerges of what happens when speculative finance starts flowing into food production.

Since 2008, the Siva Group and its myriad subsidiaries have acquired stakes in around a million hectares of land in the Americas, Africa and Asia, primarily for oil palm plantations. On paper, this makes Sivasankaran one of the world’s largest farmland holders.

But Sivasankaran's also a land grabber and tax avoider. Like the majority of transnational investors in agriculture, his investments are channeled through a web of shell companies based in offshore tax havens. The companies he holds shares in are engaged in dubious land deals and kick back schemes, and seem more concerned with funnelling generous payments into the pockets of their directors than with producing food.

The alarming side effect of this type of investment is the commodification of land and the marginalisation of communities that rely on it. Wherever the Siva Group and its like go, they secure title to vast parcels of land by any means necessary – often without the meaningful consent of the affected communities. They then leverage these landholdings for cash and credit to turn still more deals.

Governments have so far done little, if anything to protect their people from this new wave of predatory investment. Their efforts have focussed more on providing investors with safeguards and incentives, while proposing only voluntary guidelines to keep corporate responsibility in check. The door is thus wide open for financial players like Sivasankaran to grab lands and make quick profits, undermining food systems and the livelihoods of farmers in the process.

Read the report (PDF).

By Stacy Mitchell - Institute for Local Self-Reliance, October 2014

Critical fights over the future of our energy system are underway in dozens of states, with far-reaching implications for both climate change and our economy. At issue is the recent, rapid expansion of rooftop solar, which is revolutionizing who owns and profits from electricity generation. Rather than power production being monopolized by utilities, more and more households are becoming energy producers themselves. This transition is saving families money and driving the creation of tens of thousands of well-paying jobs.

But rooftop solar threatens the profits of utilities and the companies that supply them with energy. These powerful interests have gone on the offensive and are campaigning to weaken policies that enable rooftop solar in multiple states. They have begun to score wins, including a pivotal victory in Arizona, where regulators granted the state’s largest utility, APS, the right to impose new fees on households with rooftop solar. The fees have undermined the economics of rooftop solar, dramatically slowing installations and causing widespread job losses.

Read the report (PDF).

By various - Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and FOE, October 2014

In January and May 2014, a coalition of non-governmental organizations (NGOs), the Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and Friends of the Earth U.S. (hereafter referred to as the Fact Finding Team), undertook two field visits to Singrauli, India, to meet with communities affected by Reliance Power’s Sasan Ultra Mega Power Project (UMPP) and its associated mine to assess the project’s effect on local communities and the environment.

Since the U.S. Export-Import Bank (Ex-Im Bank) approved over $900 million in financing for the coal project in October 2010, little information has been provided by the agency about Sasan’s compliance with Ex-Im environmental, social, human rights, and corruption policies. This includes the Bank’s commitments under the Equator Principles1 and the International Finance Corporation (IFC) Performance Standards,2 the agency’s environmental, social, human rights and corruption policies, as well whether or not the project has lived up to the expectations laid out in the Environmental and Social Impact Assessment (ESIA) documents for the mine and the power plant. An apparent lack of oversight prompted the NGOs involved in this report to conduct this independent investigation. The Fact Finding Team has uncovered numerous reports of corruption and human rights and labor violations associated with the Sasan coal project, all of which have largely been ignored by the Ex- Im Bank.

Read the report (PDF).

By J David Hughes - Post Carbon Institute, October 2014

In recent years Americans have been hearing that the United States is poised to regain its role as the world’s premier oil and natural gas producer, thanks to the widespread use of horizontal drilling and hydraulic fracturing (“fracking”). This “shale revolution,” we’re told, will fundamentally change the U.S. energy picture for decades to come—leading to energy independence, a rebirth of U.S. manufacturing, and a surplus supply of both oil and natural gas that can be exported to allies around the world. This promise of oil and natural gas abundance is influencing climate policy, foreign policy, and investments in alternative energy sources.

The primary source for these rosy expectations of future production is the U.S. Department of Energy (DOE). Each year the DOE’s Energy Information Administration (EIA) releases its Annual Energy Outlook (AEO), which provides a range of forecasts for energy production, consumption, and prices.

The 2014 AEO reference case projects U.S. crude oil production to rise to 9.6 million barrels of oil per day (MMbbl/d) in 2019 and slowly decline to 7.5 MMbbl/d by 2040, while natural gas production is projected to grow for at least the next 25 years and hit 37.5 trillion cubic feet per year in 2040. Tight oil (shale oil) and shale gas serve as the foundation for these optimistic forecasts.

This report provides an extensive analysis of actual production data from the top seven tight oil and seven shale gas plays in the U.S. (These plays account for 89% of current tight oil production and 88% of current shale gas production, and serve as the primary sources of future production in the EIA’s forecasts—82% of forecast tight oil and 88% of forecast shale gas production through 2040.) It concludes that the current boom in domestic oil and gas production is unsustainable at the rates projected by the EIA, and that the EIA’s tight oil and shale gas forecasts to 2040 are extremely optimistic. What this means is that the country's current energy policy—which is largely based on the expectation of domestic oil and natural gas abundance far into the future—is badly misguided and is setting the country up for a painful, costly, and unexpected shock when the boom ends.

By staff - U.S. Chemical Safety and Hazard Investigation Board, October 2014

An August 6, 2012, release of flammable vapor led to a fire at the Chevron Refinery in Richmond, California. The CSB released three investigation reports into this incident.

This report is particularly sigificant in that it reveals that the refinery workers repeatedly tried to warn the managers and employers of the deteriorating conditions of the refinery's infrastructure (which led to the fire), but were ignored. Knowing this, climate justice activists and organizers can develope relationships with workers in capitalist extractive industries and do the painstaking, tedious work of cultivating relationships and building trust to build a united front against the capitalist class.

Read the report (English PDF).

By Jen Wallis - exclusive, September 21, 2014

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.

Editor's note: Jen Wallis meant to give the following speech at the People's Climate March in Seattle on Sunday, September 21, 2014, but had to abbreviate it due to time constraints. Here is the entire speech she would have given:

Hi my name is Jen Wallis, and I’m a founding member of Railroad Workers United. We are a rank-and-file caucus of the various national and international railroad unions. A few of us started this organization to respond to the decades of infighting created by the carriers to keep us divided.

I've been a conductor with BNSF Railway for over ten years. In 2008, I was injured on the job through no fault of my own. I was one of the first workers to file a whistleblower suit against a major railroad for retaliation for reporting a work-related injury. After 6 years of litigation, I won my case in Federal Court this past March, so I know a little bit about what it takes to fight corporations and what they will do to you and your family. I lost much of my support system, and I lost my house to foreclosure. And just as a side note, I first met Kshama Sawant when she showed up and got arrested for those of us fighting foreclosure. She is amazing!!! Over 1,000 railroaders who filed similar complaints have lost. I’m one of a handful to have won. The railroads have a lot of money to fight you, and they usually win.

I’ve taken it upon myself to use my victory to speak out for safety on the railroad because I’m one of the few people who can and not get fired for it, and I was actually in San Francisco speaking at a labor conference this past July when I got word that a group of unelected union officials from the conductor’s union had been meeting in secret with BNSF for 18 months, and unleashed a proposal that would have ended the job of the conductor on freight trains right here in my territory. My job. One person running trains at least a mile long through our communities where there have always been at least two, and engineer and a conductor. 140 years of railroading tradition gone with one contract. All the railroads would follow that precedent.

So we at Railroad Workers United went into what I can only call DEFCON 1 organizing. We had less than a month to mount a campaign to vote no before ballots were to be sent out. There were plenty of carrots in the agreement being dangled for the huge numbers of new hires we have, with things like “worker retention board” which claimed if you can’t hold a job, we’ll pay you to sit at home and not work, ending pay scale for new hires, and huge buy-outs for those getting close to retirement anyway. It was the standard concessionary agreement. Now those of us who have been in the game long enough knew these were only empty promises. We’ve seen enough of these broken in our careers, but the massive numbers of new hires did not, and we saw what scare tactics do at places like Boeing. Unions usually don’t defeat concessionary contracts, even when those companies are swimming in profits.

We knew we had to be bold, as bold as they were. I immediately started a FB group to protest the meeting in Sea-Tac where the officers would be to give us the hard-sell pitch. Now railroaders aren’t allowed to strike, and we haven’t done much in terms of organizing anything since 1894. You won’t find many of us who have ever so much as held a sign on a picket line. So I invited people who are more comfortable with holding signs - I invited my environmentalist friends I’d been trying to build alliances with these last couple of years - people from Backbone, from 350.org, Rising Tide, and members of the more radical unions like the Teamsters and Teachers and ILWU, and they showed up for us. Jess Spear showed up for us. The media we got in Seattle from that little picket inspired towns all across the country to follow suit. In places like Greybull, Wyoming and Creston Iowa, we got the spouses and families out there holding signs, (probably for the first times in their life), because they know our jobs and how terrifying it would be to have their loved ones out on these dangerous trains by themselves working under extreme fatigue in every kind of weather. We added over 2,000 new members to our facebook group in a month, distributed thousands of stickers and flyers and talking points. Many of us put our lives on hold and spent every waking moment organizing around this.

Finally, on September 10th, less than two months after we first got wind of it, the results were in. From the Gulf Coast to the Great Lakes to right here in the Pacific Northwest, our members voted that proposal down. It was one of the proudest moments of my life. But as sweet as that victory was, none of that means anything compared to this fight against climate change. I have a 9 year-old son. I read recently that by the time he is my age, at the rate we’re going, this planet will experience a mass extinction. Extinction! And I can’t help but wonder If I’ve really done enough to protect him from that future.

Now our recent victory was a huge inspiration to all of us. We now know what we have to do, and we know what it takes to do it. We understand completely now that we are fighting an industry that cares as much about us as they do the environment, which is not at all...It might seem a little scary for environmentalists to approach labor, and sometimes the feeling is mutual, but when my co-workers saw that tripod up in Everett with the sign that said “Cut Oil Trains, Not Conductors”, they were blown away. Nobody has stood up for us in a very long time. America has what I call an epidemic of fence-straddling. Most people like to be perched up there, listening to information from both sides and occasionally hopping down from one to the other based on the news we get or the friends we know or which side has the most money or slickest campaign. But my friends, the fence is an illusion. If we could all just step back for a minute and notice that big field we’ve been in together this entire time. The fence is capitalism and corporate plutocracy, and it’s time to take it down!!!