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From Rigs to Riches: The promise of oil and gas decommissioning in a just transition

By Peder Ressem Østring - Just Transition Research Collaborative, February 24, 2023

The recycling of oil rigs can provide new jobs within the circular economy, particularly beneficial for oil-dependent regions. If we get it right, the process of cleaning up after the fossil economy can itself serve as a bridge from fossil dependency towards a just transition.

Globally, there are over 7000 offshore oil and gas platforms. Together with other structures and pipelines, these form an impressive built environment. If we are to have a fighting chance of keeping global warming well below 2°C however, virtually all of these installations would have to be shut down, dismantled and recycled. This process — known as offshore decommissioning — is already taking place, but will see a dramatic increase in the coming decade. It will be increasingly necessary to confront the ways in which decommissioned infrastructure is handled, both with regards to the environment and labour conditions.

A case study of the decommissioning of oil and gas infrastructure in the North Sea shows some of both the possibilities and challenges decommissioning presents in terms of a just transition.

While some oil companies would like to leave the oil platforms in the sea, eagerly promoting the idea of repurposing old rigs as artificial reefs, this is not allowed under current regulation. After the plans of Royal Dutch Shell of dumping the oil storage tanker Brent Spar in the North Sea in the 1990s was met with massive public scrutiny and campaigns from environmental organizations, regulations came in place that effectively banned the practice of abandoning manufactured structures in the North-East Atlantic.

Companies have since sought other ways of disposing of the problem with structures put out of commission. Another approach for cutting costs for the oil supermajors has been to send old floating rigs for breaking in the global South. This has taken place under horrendous conditions for both workers and the environment, as has been uncovered by the BBC.

Both these false solutions are in reality ways of externalizing costs of cleaning up after the fossil companies. Both approaches should be rejected, while insisting on the principle that the polluter should pay.

'Groundbreaking' Report Shows Promise of Greener Jobs for Former Fossil Fuel Workers

By Julia Conley - Common Dreams, January 3, 2023

New analysis shows how California "can achieve a just and equitable transition away from fossil fuels for oil and gas workers."

A new analysis out Tuesday shows how a just transition towards a green economy in California—one in which workers in the state's fossil fuel industry would be able to find new employment and receive assistance if they're displaced from their jobs—will be "both affordable and achievable," contrary to claims from oil and gas giants and anti-climate lawmakers.

The study published by the Gender Equity Policy Institute (GEPI) notes that a majority of workers in the oil and gas sectors will have numerous new job opportunities as California pushes to become carbon neutral by 2045 with a vow to construct a 100% clean electricity grid and massively reduce oil consumption and production.

"The state will need to modernize its electrical grid and build storage capacity to meet increased demand for electricity," reads the report. "Carbon management techniques, plugging orphan wells, and the development of new energy sources such as geothermal will all come into play, providing economic opportunities to workers and businesses alike."

GEPI analyzed the most recent public labor data, showing that the oil and gas industries in California employed approximately 59,200 people as of 2021 across jobs in production, sales, transportation, legal, and executive departments, among others.

The group examined potential job opportunities for fossil fuel workers "in all growing occupations, not solely in clean energy or green jobs," and found that about two-thirds of employees are likely to find promising opportunities outside of fossil fuel-related work.

"Our findings show that a sizable majority (56%) of current oil and gas workers are highly likely to find jobs in California in another industry in their current occupation, given demand in the broader California economy for workers with their existing skills," the report says.

Los Angeles Just Transition Strategy

How to Pass a CTA Divestment Resolution Webinar

2022 Oil Change International Supporter Briefing

Wake Up Call: Refinery Disaster in Philadelphia

The Dirty Truth About Utility Climate Pledges (Version 2)

By Cara Bottorff, Noah Ver Beek, and Leah Stokes - Sierra Club, October 2022

Rapidly cleaning up the electric sector is key to achieving our climate goals. We need electric utilities to retire coal plants, cancel plans to build new gas plants, and accelerate clean energy deployment to achieve 80 percent clean electricity by 2030 and 100 percent clean electricity by 2035. This is in line with the United States’ climate commitments and scientific consensus of what is needed for a livable planet.

Many utilities have pledged to clean up their electricity production, but our research shows these promises often amount to little more than greenwashing. In our 2021 report, released a year and a half ago, we analyzed the plans of 77 utilities owned by the 50 parent companies most invested in fossil fuel generation. We found that despite pledges to reduce emissions from many of these companies, most utilities did not have plans that would actually achieve the necessary emissions reductions by 2030.1, 2 This updated report investigates what progress, if any, these utilities made over the last year and a half to turn their pledges into real action. We want to know: have utilities stepped up to meet the challenge and make the changes needed to save lives, reduce costs, and address climate change by transforming our power system?

Download a copy of this publication here (PDF).

Global Climate Jobs Conference 2022: Fossil fuel workers and climate jobs

The Real Oil Shock: How Oil Transformed Money, Debt, and Finance

By R.C. Smith - PhD Dissertation, September 1, 2022

Oil and finance have long played central roles in defining how the global economy has developed and this is especially true of the modern neoliberal economic system. One factor of their relationship that is often unexamined is how oil industry profits and liquid capital influence the developments of finance. Understanding their relationship during the modern period first requires understanding this petrocapital cycle, how it influences economic development, and the ways that its rise to prominence in the 1970s transformed the global capitalist financial system.

We are living in a world that has been shaped by the demands of oil and finance. Under the neoliberal capitalist order these two sectors enjoyed central roles in setting the pace of the global economy. Shocks in the price of oil, as recent events like the record-high oil prices experienced following Russia’s 2022 invasion of Ukraine have reminded us, tend not to stay confined to the fuel pump and radiate throughout our economic system. One particular avenue of influence that is often not seen but is widely felt is the reinvestment of oil profits in global financial markets. This question was first thoroughly examined in Mahmoud el-Gamal and Amy Myers Jaffe’s Oil, Dollars, Debt, and Crises: The Global Curse of Black Gold which traced the relationships that formed the endogenous petrocapital cycle, which is the reinvestment of the profits reaped by oil exporters in financial markets and how this changed global credit and financial markets. The Real Oil Shock builds on their earlier work by digging deeper into the birth of this process in the Oil Shocks of the 1970s. It will do this by examining how OPEC’s windfall capital fundamentally changed financial markets, practices, and the creation of money.

What The Real Oil Shock is examining is not a new phenomenon in economic history. The human experience abounds with instances where dramatic redistributions of wealth and resources created significant changes in the existing social and economic order. An excellent example comes from the Spanish colonization of the Americas. Exploitation of gold, silver, and other precious metals in the Americas provided the Spanish monarchy with an enormous windfall of liquid capital. This was spent by the Spanish monarchy on projects of the state, fighting wars, and expanding their influence in Europe. This put increasing quantities of Spanish doubloons in circulation outside of domestic markets. Spanish gold had become the capital for Dutch, English, and French merchants for financing their own commercial, industrial, and colonial enterprises whose activities were the foundation of early modern capitalism in Europe.

Download this document (link).

Ending Federal Offshore Oil and Gas Lease Sales in Next Five-Year Program Would Have Little to No Impact on Gas Prices, Jobs, and Economy, According to New Analysis

By Jackson Chiappinelli, Dustin Renaud, and Kendall Dix - Earthjustice, June 29, 2022

Amid climate crisis and record gas prices, new analysis debunks oil and gas industry claims on need for new federal leasing by offering further evidence that ending new federal offshore leasing would not raise gas prices for nearly two decades, and would have virtually no net economic impact.

According to a new report out today, putting an end to new federal offshore leasing on public waters for the next five years:

  • Would result in less than a cent increase in gas prices at the pump over the next two decades
  • Would still maintain close to current levels of oil production capabilities for many years
  • Would not have the drastic impact on workers in the Gulf or the national economy that the fossil fuel industry has purported. Industry’s claims about economic impacts fail to account for the ways that energy and job markets gradually adapt and the burdensome climate costs averted from transitioning to clean energy
  • Result in between $23 billion and $365 billion dollars in climate benefits through 2040

The new report, which was supported by Earthjustice, Healthy Gulf, and Gulf Coast Center for Law & Policy (GCCLP) and published by Apogee Economics and Policy, a leader in energy production forecasts and benefit-cost assessments related to energy development, rebuts industry claims that ending leasing would significantly impact production and the economy. Instead, the report provides analysis that shows that the Biden administration can end new leases for the next five years without raising gas prices, preventing oil production, and negatively impacting jobs. The new report supports the opportunity for moving the United States away from fossil fuels and meaningfully addressing the worsening climate crisis, instead of giving into demands by the oil and gas industry to double down on decades of more carbon pollution.

For years, oil and gas development has contributed to worsening climate impacts, devastation for Gulf communities, environmental destruction, and dangerous conditions for offshore workers. Because federal offshore leasing locks in development for decades, putting an end to leasing is essential if the Biden administration is going to meet its national climate pollution and Paris Agreement targets and environmental justice commitments.

The new report comes just ahead of the release of the Interior Department’s next five-year offshore oil and gas leasing program. In the upcoming program, Interior will propose a schedule of federal offshore oil and gas lease sales for the next five years and has the option to not hold any new lease sales over that five-year period.

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