Book Review Part II: ‘Public Responses to Fossil Fuel Export: Exporting Energy and Emissions in a Time of Transition’

In Ohio, one of the most blatant examples of such bluster is the Nexus natural gas transmission pipeline which promised the moon and stars only to deliver on a fraction of what was promised leaving counties and school districts standing when the music stopped! Fortunately for New Zealand and its environment, they weren’t as hasty and reckless in accepting the promises of an industry that has never delivered. Widener lays out the political machinations that lead us to the 2018 banning of future O&G permits by describing seemingly irreconcilable efforts by former Labor Party Prime Minister Helen Clark to simultaneously appoint a climate change minister and speak of becoming the world’s first carbon neutral nation while on the other hand looking to expand “oil and gas block offers independent of climate change discussions.” Whew, it is comforting to know that climate change hypocrisy is not exclusive to North of the Equator! Like our experiences here in the US with Donald Trump, we see that Clark was followed by John Key who withdrew from the Kyoto Protocol and while launching a very Trumpian “eight-step Petroleum Action Plan to expand the country’s commitment to oil exports.” Widener was told by one climate activist that “Both major parties are hell bent” on this energy transition toward extracting oil and natural gas.” In the wake of the Biden administration’s support for Carbon Capture and Storage (CCS), both parties implicit and explicit subsidization of fossil fuels, and the fact that no politician running for national office has been honest with the American public about oil & gas since Jimmy Carter’s “Malaise Speech” (Note: Carter went on to get crushed by Ronald Reagan just a couple months later in one of the biggest POTUS landslides this country has ever seen!) The sentiment captured by Widener is not unique to New Zealand and was uttered more than once by participants at the recent COP27 meeting in Egypt.

Widener went on to point out that New Zealand under Prime Minister Ardern went on to join countries like Belize, Costa Rica, Denmark, France, and Ireland in pioneering the concept of “keep it in the ground.”^13,14 To this point, the first line of defense presented by anti-drilling activists was to speak to what they thought was the true intention of industry which was to find oil but use natural gas as a “bridge fuel” as their cover making anything they did more palatable in Wellington. While this is not identical to how fracking was framed here in the US, it is true that the original language used by industry and their political operatives centered around “energy independence” appealing to American’s patriotism by wrapping the American flag so tightly around themselves that their goals become synonymous with the goals of the entire country. Another sentiment that Widener captured in her study that should ring true for anyone living in Fracking or related Petrochemical regions of the US is the deep divisions sowed by the promises made by Oil & Gas industry and the ways in which neighbors, family, and entire communities are adversely impacted by such promises and the marginalization of any discussion of economic or environmental risks. Dr. Widener went so far as to hypothesize that “the South Island’s inexperience and limited working knowledge of the industry” may have allowed for large multinationals to literally write their own regulations while also operating with such speed and overwhelming force that local politicians and businesses came to be mere conduits of their wishes and demands.¹⁵ There is evidence that this has also been the case here in the US along with a revolving door between industry, regulatory agencies, and the political sphere. It is a predatory tactic that I for one would not put past Big Oil & Gas. Another worry of the anti-drilling camp pointed out by Widener would also be familiar to the anti-fracking community here in The States and that is the fear that once industry and associated infrastructure are “locked in” communities will eventually “accept the risks and downplay the hardships.”^16,17 New Zealanders were also right to ask where the oil that was going to be produced would be going knowing full well that every drop would eventually be up for sale on the international market and that OPEC most notably Saudi Arabia not New Zealand would be the final arbiter of what they pay at the pump! One quote that stuck with me from Widener’s paper was that of an anti-drilling activist who told her, ”I think if we are serious about wanting to create jobs, we need to create them ourselves and within our communities and not rely on silver bullet multinational solutions that [are] made well outside of our city.” I wholeheartedly agree with this statement and having seen how little organic economic and job growth occurs in fracking communities throughout the Ohio River Valley the only silver bullet multinational solutions actual multinationals are focused on is automation, disruption of labor organizing, and job migration rather than job creation.

Meanwhile, Dr. Widener pointed to another story that New Zealand was telling and that is of a country that gets “75% of its electricity through a mix of renewables” behind only Norway and Iceland with the island nation being at the vanguard of geothermal specifically. This progress is happening despite many in the country’s capital of Wellington telling the renewable industry “We need the oil industry, the gas industry… [They] need to know that they can keep supplying gas and make some money locally because otherwise the costs of export are too great.” Regardless of these headwinds many of those that Dr. Widener spoke with were confident New Zealand would eventually become a leader not in oil and gas exploration but rather “renewable energy knowledge, inspiration, and technology.” Bolstering this sentiment was none other than Prime Minister Ardern herself who declared in 2020 a “climate change emergency committing her country to carbon neutrality by 2050. While there is the need for elected officials like Ardern to make such proclamations Dr. Widener really distilled for me what the key to a just transition requires and that is community actions and movements that build broad awareness “strengthen regulations, increase oversight, insert community involvement in key decisions, generate national discussions, and achieve bans or moratoria.”

In Chapter 7, we are taken nearly 11,000 miles Northwest to Norway’s offshore North Sea oil and gas fields just off the coast of Bergen, Kollsness, and Mongstad where Norwegians and their sovereign wealth fund have gotten very rich off one of the most historically reliable collections of oil and gas fields anywhere outside Saudi Arabia or Texas supplying “2% and 3% of global [oil and gas] demand, respectively.”^18,19 However, as the authors of this paper pointed out, almost all of Norway’s electricity production comes from renewables namely hydropower (90%) and wind (8%) allowing Norway to become the 3rd and 7th largest exporter of gas and oil, respectively.

These researchers from the Norwegian Research Centre and the University of Bergen are quick to point out that the debate about oil and gas in Norway can’t be understood without knowing how “out of sight out of mind” much of the country’s fossil fuel infrastructure actually is with 85% of “petroleum products…exported directly by pipeline (gas) on the seabed or loaded directly on to tankers (buoy-loading) far from the shore.” The other key to how oil and gas is viewed in Norway is the fact that profits are redistributed – and yes, we should envy this model! – directly to the public by way of the “Norwegian Model” which relies on a unique licensing system and a taxation scheme that plows a significant chunk of profits into the country’s state and more importantly to Norwegians themselves the country’s $1.1-1.3 trillion dollar Sovereign Wealth Fund (SWF). Yet, the authors note that there is risk in being subject to a “Dutch Disease” model whereby a country is so beholden to a certain sector of the economy that it functions as a macro version of what we know here in the United States are company towns. Some of this reliance was shaken free from the collective Norwegian psyche in the aftermath of the 2014-2015 oil and gas price crash but much like the United States memories are short and Norwegians appear to be quite comfortable seeing their SWF continue to grow and maintains its position as the envy of the entirety of the Organization of Economic Cooperation and Development (OEC) member nations.

The authors point out the risk is nontrivial given that 78% of investment costs “can be deducted from oil and gas company taxes.” In the age of the Climate Change realities facing so many nations including Norway this nation manages to justify its continued reliance on petroleum product exports by pointing to how clean its gas is vis a vis other nation and that if it doesn’t supply this demand those countries will fill the void with dirtier sources of natural gas and oil. A fair point but one you would expect from a country that relies on oil and gas exports for nearly half of all exports. These authors contended that this rationale along with novel “”scientific” economic models” and international climate negotiations buoyed what the Norwegian parliament called the global cost-effectiveness of Norwegian oil and gas. Since 2013 Norway’s small but mighty Green Party has been arguing for a managed decline of Norway’s oil and gas exports given that otherwise it is doing nothing more than “exporting emissions.”²⁰ The primary arrow in the Green Party’s quiver has been a reframing of oil and gas from a source of pride and welfare to one of economic risks and stranded assets in the long-term. A bold portion of this managed decline is a gradual increase of the country’s carbon tax from $60 to $202 per ton of CO2 by 2030. I for one love this idea of a gradual shift so as the lessen the pain inflicted on those that had the least to do with our current climate crisis and frankly even Norway’s current $60 per ton of CO2 seems like a dream when considering that the Gold Standard for such efforts here in the US The Regional Greenhouse Gas Initiative (RGGI) has only managed to get an average of $4.47 per credit on its exchange and has never generated more than $14 per ton.

This background drove the research questions for this paper which were as follows:

1. To what extent do you agree or disagree with the idea of oil and gas extraction in the sensitive Arctic archipelagos of Lofoten and Vesteralen, and the island of Senja?
2. Which of the following alternatives is closest to your view? Possible answers ranged from “In 20 to 30 years, the [oil and gas] industry should be as big as possible” to “In 20 to 30 years, the [oil and gas] industry should be discontinued”’
3. How worried are you about climate change?

Respondents to this survey that felt the oil and gas industry should shrink considerably grew “from 16.4% in 2016 to 23.8% in 2019” and in general Norwegians seemed to be growing more concerned about climate change from roughly 45% in 2013 and 2014 to slightly more than 50% in 2019 and 2020. This is a positive, but mixed, development in a country that has based nearly all its economy on pulling hard to reach sources of oil and natural gas out the ground.  Norway is also a country that appears to see the end is near with respect to its fossil fuel largesse and is taking the appropriate steps to transition away from this reliance on the state-owned Equinor’s contributions to their SWF and the public sector. It will not be all roses for Norway but at the very least they seem to be wrestling with very tough questions in real-time rather than when conditions are such that deep and broad pain is inflicted on all Norwegians. We could take a lesson from this type of journey here in the United States.

The editors of this compilation Hazboun and Boudet bring us back to their backyard in the Pacific Northwest (PNW) for Chapter 8 a region they called a ““thin green line” of resistance” and Zoltán Grossman called the Achilles Heel of the energy industry²¹ to discuss public views on fossil fuel exports. The PNW is all that stands between completely unfettered extraction in regions like the Powder River Basin or Alberta’s boundless energy reserves and highly profitable overseas markets. Hazboun and Boudet point out that the lack of export options specifically for coal is not for a lack of trying with seven export terminals, including the highly contentious Gateway Pacific Terminal in Bellingham, Washington, having been proposed and soon thereafter rejected since 2010. We all are very familiar with the progressive politics of the PNW states of Oregon and Washington as well as British Columbia but as the authors pointed out a significant chunk of this progressive bona fides especially with respect to energy is underpinned “by the region’s significant hydroelectric resources”, with the latter’s uncertainty increasing in recent years due to the regions’ rapidly changing climate. Another two points of hypocrisy is that Washington and British Columbia are home to seven oil refineries combining to process 3% of North American oil while Oregon derives 40% of its energy from natural gas power plants.

In their continued effort to get a pulse for PNW resident’s opinions on fossil fuel exports Hazboun and Boudet discovered: 1) the highest level of uncertainty about transport was for natural gas, 2) once again males can be counted on to be reliable supporters of oil and gas export but interestingly not coal, and 3) residents of British Columbia with its long history of fossil fuel extraction and export, while generally thought of as politically progressive, were more supportive of exports than those in Washington or Oregon. After reading this chapter and having recently read Ryan Busse’s “Gunfight: My Battle Against he Industry that Radicalized America” and Kathleen Belew’s “Bring the War Home: The White Power Movement and Paramilitary America”, both of which had a significant focus on the radicalization and arming of significant chunks of the regions where coal, gas, and oil is produced in the Interior Western States, I was left thinking that something has to give. We have largely urban and coastal PNW communities resisting all manner of fossil fuel exports for good and noble reasons and yet we have the Interior Western States with very few options for economic development other than the boom-bust cycles of fossil fuels. In the middle we have elected officials and industry continuously pitting these two demographics against each other as they get rich and the rest of us are left to fight among ourselves for the crumbs. It is a very dystopian future this scenario generates for me, but it is one we should be addressing.

I’ll conclude my review of this book in the coming weeks by examining Parts IV and V where the editors and their collaborators return to the Pacific Northwest and Norway as well as Russia and Northern Australia to examine community responses to export and oil by rail projects as well as the role that imminent domain, indigenous sovereignty, and the media play in shaping these conflicts and the regulatory process.

[1] The Department of Energy has had regulatory oversight of natural gas import/export since the Natural Gas Act was passed in 1938.