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The Great Carbon Bubble: Bill McKibben on Why the Fossil Fuel Industry Fights So Hard Against Climate Action

By Climate Guest Contributor on February 8, 2012 at 10:49 am

"The Great Carbon Bubble: Bill McKibben on Why the Fossil Fuel Industry Fights So Hard Against Climate Action"

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To preserve a livable climate, we need to leave most remaining hydrocarbons in the ground. Guess who doesn’t like that idea?

by Bill McKibben, reposted from TomDispatch

If we could see the world with a particularly illuminating set of spectacles, one of its most prominent features at the moment would be a giant carbon bubble, whose bursting someday will make the housing bubble of 2007 look like a lark. As yet — as we shall see — it’s unfortunately largely invisible to us.

In compensation, though, we have some truly beautiful images made possible by new technology.  Last month, for instance, NASA updated the most iconic photograph in our civilization’s gallery: “Blue Marble,” originally taken from Apollo 17 in 1972. The spectacular new high-def image shows a picture of the Americas on January 4th, a good day for snapping photos because there weren’t many clouds.

It was also a good day because of the striking way it could demonstrate to us just how much the planet has changed in 40 years. As Jeff Masters, the web’s most widely read meteorologist, explains, “The U.S. and Canada are virtually snow-free and cloud-free, which is extremely rare for a January day. The lack of snow in the mountains of the Western U.S. is particularly unusual. I doubt one could find a January day this cloud-free with so little snow on the ground throughout the entire satellite record, going back to the early 1960s.”

In fact, it’s likely that the week that photo was taken will prove “the driest first week in recorded U.S. history.” Indeed, it followed on 2011, which showed the greatest weather extremes in our history — 56% of the country was either in drought or flood, which was no surprise since “climate change science predicts wet areas will tend to get wetter and dry areas will tend to get drier.” Indeed, the nation suffered 14 weather disasters each causing $1 billion or more in damage last year. (The old record was nine.) Masters again: “Watching the weather over the past two years has been like watching a famous baseball hitter on steroids.”

In the face of such data — statistics that you can duplicate for almost every region of the planet — you’d think we’d already be in an all-out effort to do something about climate change. Instead, we’re witnessing an all-out effort to… deny there’s a problem.

Our GOP presidential candidates are working hard to make sure no one thinks they’d appease chemistry and physics. At the last Republican debate in Florida, Rick Santorum insisted that he should be the nominee because he’d caught on earlier than Newt or Mitt to the global warming “hoax.”

Most of the media pays remarkably little attention to what’s happening. Coverage of global warming has dipped 40% over the last two years. When, say, there’s a rare outbreak of January tornadoes, TV anchors politely discuss “extreme weather,” but climate change is the disaster that dare not speak its name.

And when they do break their silence, some of our elite organs are happy to indulge in outright denial. Last month, for instance, the Wall Street Journal published an op-ed by “16 scientists and engineers” headlined “No Need to Panic About Global Warming.” The article was easily debunked. It was nothing but a mash-up of long-since-disproved arguments by people who turned out mostly not to be climate scientists at all, quoting other scientists who immediately said their actual work showed just the opposite.

It’s no secret where this denialism comes from: the fossil fuel industry pays for it. (Of the 16 authors of the Journal article, for instance, five had had ties to Exxon.) Writers from Ross Gelbspan to Naomi Oreskes have made this case with such overwhelming power that no one even really tries denying it any more. The open question is why the industry persists in denial in the face of an endless body of fact showing climate change is the greatest danger we’ve ever faced.

Why doesn’t it fold the way the tobacco industry eventually did? Why doesn’t it invest its riches in things like solar panels and so profit handsomely from the next generation of energy? As it happens, the answer is more interesting than you might think.

Part of it’s simple enough: the giant energy companies are making so much money right now that they can’t stop gorging themselves. ExxonMobil, year after year, pulls in more money than any company in history. Chevron’s not far behind. Everyone in the business is swimming in money.

Still, they could theoretically invest all that cash in new clean technology or research and development for the same. As it happens, though, they’ve got a deeper problem, one that’s become clear only in the last few years. Put briefly: their value is largely based on fossil-fuel reserves that won’t be burned if we ever take global warming seriously.

When I talked about a carbon bubble at the beginning of this essay, this is what I meant. Here are some of the relevant numbers, courtesy of the Capital Institute: we’re already seeing widespread climate disruption, but if we want to avoid utter, civilization-shaking disaster, many scientists have pointed to a two-degree rise in global temperatures as the most we could possibly deal with.

If we spew 565 gigatons more carbon into the atmosphere, we’ll quite possibly go right past that reddest of red lines. But the oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons — five times more than we can ever safely burn. It has to stay in the ground.

Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela).

If you run an oil company, this sort of write-off is the disastrous future staring you in the face as soon as climate change is taken as seriously as it should be, and that’s far scarier than drought and flood. It’s why you’ll do anything — including fund an endless campaigns of lies — to avoid coming to terms with its reality. So instead, we simply charge ahead.  To take just one example, last month the boss of the U.S. Chamber of Commerce, Thomas Donohue, called for burning all the country’s newly discovered coal, gas, and oil — believed to be 1,800 gigatons worth of carbon from our nation alone.

What he and the rest of the energy-industrial elite are denying, in other words, is that the business models at the center of our economy are in the deepest possible conflict with physics and chemistry. The carbon bubble that looms over our world needs to be deflated soon. As with our fiscal crisis, failure to do so will cause enormous pain — pain, in fact, almost beyond imagining. After all, if you think banks are too big to fail, consider the climate as a whole and imagine the nature of the bailout that would face us when that bubble finally bursts.

Unfortunately, it won’t burst by itself — not in time, anyway. The fossil-fuel companies, with their heavily funded denialism and their record campaign contributions, have been able to keep at bay even the tamest efforts at reining in carbon emissions. With each passing day, they’re leveraging us deeper into an unpayable carbon debt — and with each passing day, they’re raking in unimaginable returns. ExxonMobil last week reported its 2011 profits at $41 billion, the second highest of all time. Do you wonder who owns the record? That would be ExxonMobil in 2008 at $45 billion.

Telling the truth about climate change would require pulling away the biggest punchbowl in history, right when the party is in full swing. That’s why the fight is so pitched. That’s why those of us battling for the future need to raise our game. And it’s why that view from the satellites, however beautiful from a distance, is likely to become ever harder to recognize as our home planet.

This piece was originally published at TomDispatch.

Bill McKibben is Schumann Distinguished Scholar at Middlebury College, founder of the global climate campaign 350.org, a TomDispatch regular, and the author, most recently, of Eaarth: Making a Life on a Tough New Planet.

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28 Responses to The Great Carbon Bubble: Bill McKibben on Why the Fossil Fuel Industry Fights So Hard Against Climate Action

  1. Mike Roddy says:

    Excellent summary, Bill.

    The problem may really be one of time. Eventually global warming’s effects and causes will be obvious to everyone. This may occur in 2020, 2030, or some other unknown date. The oil and coal companies want to amass more vast wealth before then, of course, and the price uptick is just beginning. This kind of cash is like heroin, and very difficult to walk away from.

    When Americans wake up, the government will act, since fossil fuel companies are not reformable. This may take the form of nationalization, including asset seizure. Oil companies know this- they are smarter than their tools like Watts and Monckton would indicate- but personal time horizons are more important. Adding another zero to their personal net worth is the goal, possibly enabling survival in the chaos.

    This is where their calculation turns sour. A violent and denuded world is not good for anyone, including the rich.

  2. David F. says:

    This was a good post. It’s worth noting that UCAR has set up a website highlighting the link between climate change and extreme weather: https://www2.ucar.edu/atmosnews/attribution.

    UCAR has adopted Dr. Masters’ analogy with baseball and steroids. I also like Dr. Hansen’s analogy of climate change effects on temperature as that of a loaded dice (which acknowledges that natural variability is still an important factor). Indeed, we can see the effects of that loaded dice right here in the U.S. over the past few years. NCDC has reported that January was the fourth warmest on record in the contiguous US (as is the December-January two-month period). January averaged 5.5F above the 1901-2000 average in the U.S. This coming on the heels of the third hottest summer on record, behind only the Dust Bowl summers of 1934 and 1936 (and only very slightly so).

    If there’s one positive about the way the dice has been rolling of late, it’s that at least the anomalous weather has got people talking about climate change again. Unfortunately, they’re all too often shouted down by those who think they have it all figured out.

  3. Raul M. says:

    Part of that state between Texas and Mississippi is mississing. Missing, not there, gone.

    • Raul M. says:

      Yes that state is getting smaller.
      The shrinking could be said to have taken on an exponential curve.
      I’ll definitely have to take a different stance position cause if I was to try to stand on places I stood when I was young, well even the sat. picture says it’s not there anymore.
      Then there is the problem of being politically correct about teaching historical geography.
      Well, where the founding fathers fished from shore?
      Sure is gone.
      What happened?
      They are still trying to figure their way around- “Out of sight, out of mind”,

      • Raul M. says:

        And how to talk about the changing International borders?
        Because if the shoreline changes dramatically from year to year doesn’t the mile extension from the shore go to a different spot out in the Gulf.
        Damb, when into International waters and GPS thought it was American waters

  4. Russell Seitz says:

    Bill, it does not inspire confidence that your “spectacular new high-def image shows a picture of the Americas ” in which the south 48 span ten time zones and extend almost to the equator

    The linked image is obviously a photoshopped dummy , not a hemispheric satellite collage.

    • Duncan Noble says:

      Yes it’s a composite photo, but not in the way you suggest. Check out NASA’s explanation of how it was created at http://www.flickr.com/photos/gsfc/ – see the Feb. 2 posts.

      Note that this image’s viewpoint is not the same as we are used to seeing on maps – so the equator and other reference points are not where you might expect them to be.

  5. John Tucker says:

    Natural Gas was the fossil carbon industry’s Trojan horse gift to environmentalists. Now abuzz on the denial blogs is the “defection” of Germany’s Fritz Vahrenholt ( http://www.spiegel.de/international/world/0,1518,813814-2,00.html ) to the denial camp. He lists some pretty unbelievable reasons (the sun, “climategate”,etc) but I suspect his company ( http://www.rwe.com/web/cms/en/66234/rwe/curriculum-vitae-prof-dr-fritz-vahrenholt/ ) is heavily involved in NG co-generation and he is herding and protecting his political party from its misguided German anti nuclear ultimatum and poorly deployed renewables. ( http://www.spiegel.de/international/germany/0,1518,809439,00.html ) [ he also sits on the "renewables panel" and is on the board of directors at Deutsche Shell AG ]

    Somehow now also Germany is even seriously exploring a major fracking push ( http://www.reuters.com/article/2012/01/27/germany-shale-exxon-idUSL5E8CR0U520120127 )

    I think more pro gas, “green denial” from Germany and elsewhere is on its way as the Gas industry takes root everywhere. It is a rapidly expanding infrastructure of a cheap multi-purposed base fuel/feed source that is going to be almost impossible to unseat. The west’s “new coal.”

  6. Leif says:

    Back in the old days, (before Corporations became “People”), they were duty bound to maximize profits for the shareholders. I see it all now… When the climate cat fully escapes the bag and corporations stand before us in defense of their actions, they will plead, “Your Honor, We had no other choice but to behave in a rapacious manor, the Bylaws handed down to us dictated our actions.. We were just following the Law!” Well, now that Corporations are “People” it is time they learn to play nice with others for starters. That defense has vanished as surely as I get fined for throwing a paper cup out the car window in front of a cop.

  7. NeoHelvetian says:

    ‘I Feel Duped on Climate Change’ – Fritz Vahrenholt

    I wish a “Cold Sun” really was the answer to our climate change situation. A solution with no pain or sacrifice. Heck, it even makes global warming look prescient and preemptive. Good thing we warmed things up before the sun cools things down! Right!

    I am afraid Herr Vahrenholt is still duped, just not in the way he thinks.

    http://www.spiegel.de/international/world/0,1518,813814,00.html#ref=nlint

  8. cervantes says:

    To be precise, that black goo doesn’t have to stay in the ground forever, it just has to come out a lot more slowly. That’s still a hit to shareholders, but a boon to humanity. Petroleum is extremely valuable as a feedstock for chemicals and materials and it will be great to still have it for that purpose, and maybe a little bit of fuel, for the indefinite future.

  9. M Tucker says:

    The nasty oil companies are simply supplying demand. There is very little storage capacity so what is pulled from the ground is pretty much used. Demand has actually gone down a bit in the US but world wide it is still a very busy market. As long as the majority of the world depends on gasoline and diesel and kerosene (India) just to get through one day, just to be able to put food on the table and keep a roof up, and power a few appliances, those nasty oil companies will continue to make enormous profits. There is nothing about the oil industry and its importance in daily life to compare with the tobacco industry other than the massive lobbying effort to stop congress from taking action. That massive lobbying expense is proof that they no longer need to get government handouts. We need to end the public subsidies and move to more efficient engines, electric vehicles, and biofuels to reduce and eventually eliminate demand. When the demand for crude oil slacks off the oil companies will produce less.

  10. It’s very simple.

    This is a fiduciary responsibility to maximize profits. Major oil companies have profits in the tens of BILLIONS of dollars. Their business is to deliver carbon based fuels. They serve their stockholders by preserving and enhancing that revenue flow.

    Spending a small percentage to influence public opinion is just a business decision.
    Any other questions?

    • Leif says:

      Did not “We the People” grant that “fiduciary” responsibility in the first place. Now that the wisdom of that call has become apparent is it not also “We the People’s” fiduciary responsibility to CHANGE the law to reflect REALITY? After all the current trajectory does look troubling.

  11. Sasparilla says:

    Excellent summary of the situation Bill.

    It would seem we’re on cruise control (in the hands of the fossil fuel industry) at the national level (meaning the world level as well) regarding fossil fuel policies until it is forced from their hands by some national undeniable sustained national crisis only attributable to climate change.

    • Solar Jim says:

      Don’t forget the reason why it is called the military-industrial complex. Just as nuclear power was promoted in the 1950′s by the military via insurance indemnification (now entrenched in law), they need fossil fuels. Without fossil carbon and uranium there would be limited ability for mechanized warfare, which is central to federal interest.

      Also, as you mention, tremendous fortunes are made from armaments and fuels-of-war.

      • Leif says:

        The civilizations of the future would like to see some of those fossil fuels for their security as well, don’t you think Solar? Should fertilizer take a back seat to 3,000 lbs of steel moving at 70 mph carrying 150 pounds of cargo.

      • Leif says:

        Another aspect that must be addressed is what Nation is the Military sworn to protect? The “We the People” Nation that now must include “Corpor-People” remember or the industrial-Military complex that now includes Capitalism, exploitative corporation, the largest and most powerful of which is the ecocidal fossil industry directly leading to serious jeopardy to living breathing First and Second Nation’s people? As well as the third world folks but they don’t count because they have no money. (If we gave them money they would just spend on food and fuel anyway. Keep the distribution chain small and Capitalism/Corporations make more money. We are at max production for both, it all gets used anyway.)

        Is the military more beholden to the Breathing People of the Nation or the cash flow, now, Corpro-People branch? One is killing the other and last I looked the “B-P” branch was not much of a threat.

        On top of that, there is that pesty problem of dead civilizations not contributing much to a GDP anyway so without siding with the Breathing People to build stuff the Military looses anyway. As well as the “C-P” but boy is it Pig City in the mean time.

  12. I think there is a huge element of trying to grab market share before global restrictions kick in. Whoever gets the production, pipelines and fossil fuel infrastructure in before the “oh *$#%” bell tolls can argue to be “grandfathered” in.

    • Leif says:

      If I am a corporation and I polluted the yards of my neighbors and legally got away with it, now that there is a law against pollution of my neighbors property it is no problem for me? Remember Corporations are now “People.” Does that change the picture.

  13. Jeff H says:

    Better Uses?

    Long ago, I was a chemical engineer. It seems to me that if we don’t use a great portion of the stored hydrocarbons (oil, gas, coal) for energy — as we shouldn’t — there should still be other uses (for some portion of them, at least) that are both environmentally friendly, or at least not unfriendly, and that have human utility. What are uses that are reasonably environmentally friendly, recyclable without using exorbitant amounts of energy (which would defeat the purpose), high-value, and could be stretched out over a very long period of time, thus creating utility and value for hundreds of generations?

    The idea, of course, is to find environmentally friendly uses that are high-value and thus could serve as some basis of value (of the stored hydrocarbons) going forward, over the long course of time, at least while they last as we use them in much lower quantities than at present?

    Cheers,

    Jeff

    • Leif says:

      The trouble is that Corpo-People, (C-P), look at quarterly profits where as we Breathing People, (B-P), have a fiduciary responsibility to look ahead a bit further. Some might argue for a year or two, which appears to have gone out of fashion, and others might vote for 7 generations or even longer.

      Can Corpo-People get to choose which “People” law it likes and thumb their nose at the ones it does not like or do they get the whole bag as we B-P must?

  14. scott says:

    Bill means to say 565 GtCO2e, not 565 GtC.

    http://capitalinstitute.org/blog/big-choice-0

  15. Why wouldn’t it make sense for the fossil fuel industry to leave more of the treasure in the ground? That would be sure to drive prices up and their profits with it, as well as the book value of their reserves.

    • Leif says:

      Part of the answer is that the Ecocidal Fossil Industry does not have the only dog in this hunt. Capitalism as well is a big bark and is designed to be mostly high maintenance parasitic. It has bled the large portion of humanity to the point of rebellion and exhaustion. To get the cash flow required, takes new impute, to retain Corpor-People lifestyle. i.e. invest in the highest profit, lowest overhead, most required, products available, energy and food! Corner the market and you are home free. (Distributed solar works for the wrong segment.) Capitalism is designed to keep the cost of each as high as the market can stand, (10% RoI for tar sands, 5% for distributed renewable power.) The bigger the spread the better for the Capitalistic-People branch. Do we call them “Cap-P” or perhaps Parasitic Capitalistic People, “PC-P”? It takes cash flow to be able to pump 50 gallons/hour of fuel through your bimbo yacht. Each feeds the other to a greater and greater degree, for we the B-P folks do not even get a seat at the table. A third of the Vote? What a JOKE! The “CEO” at the “Table”, which by all right’s of seniority alone should be ours. Clearly the democratic majority of the planet. “We the People”! Not the PC-P, the C-P, but the Breathing-People. B-Ps of the world UNITE! It is our last chance…

  16. Raul M. says:

    Then one day the people of the world turned to putting the carbon back into the groung.
    Some places it was biochar that gave them a better chance for regular good weather (climate) and better crops (farming),..
    Other areas started making biocrude to pump back into the ground all the while saying “I want nice weather to come back here today and tomorrow”.
    And even more areas began making methane with the extra carbon and energy of the world and put it back deep into the ground.
    The oceans of the world started releasing pent-up carbon so there was still a great supply of extra carbon in the air for a long time of many generations.
    They claimed “good morning” to be doing something about so much extra carbon in the air.

    • Raul M. says:

      They began the biucrude project by studying the tar sands to find a way to put carbon just tilled into the soil, for as the climate changed the urgency became greater and the ways to put the carbon back became more elusive. They reasoned to make the biocrude thick and non aromatic so it would sink into the soil over time and they said, “good evening” to be doing something to regain fair weather. For was it not fair to treat the weather as something to protect and desire.