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America Should Buy Out the Fossil Fuel Industry
This time it’s not just about saving our banks, keeping our schools intact, or fighting a war. This time, it’s about saving the world
Back on October 13th, I wrote an article here titled When Will the Victims of Oil Companies’ Lies Get Their Day In Court? detailing how Big Oil has been deceiving Americans — and, thus, killing Americans and our climate — for more than a half-century. Their model, “Doubt is our product,” was borrowed from the tobacco industry and weaponized against us.
Suing the big oil companies like we did the tobacco companies is a good start, but we need more to get our climate-destroying emissions under control.
And the industry is doing everything they can to make sure we never hold them accountable. Taxpayers for Common Sense documents how the industry fielded over 700 lobbyists just last year, spending almost $120 million to buy legislators across Washington, DC.
They’re also not just lobbying intensely at the federal level, but have gotten their toadies appointed to boards that oversee state climate policy, as is happening in New York State right now.
They’re even making their pitch to voters. As InfluenceMap, which tracks online advertising spending, noted:
“This research found 25,147 ads from just 25 oil and gas sector organizations on Facebook’s US platforms in 2020, which have been seen over 431 million times. This indicates the industry is now using social media to directly reach a vast audience and influence public opinions on climate change and the energy mix. These ads had a spend of $9,597,376.”
And the ads weren’t backing up actual efforts the industry is taking to clean up their act, most likely because such efforts are insignificant relative to the industry’s profits, which were over $90 billion last year and have already surpassed $200 billion this year.
“Crucially,” InfluenceMap writes, “many of these ads either contained misleading content or present information that was misaligned from the science of climate change according to both the Intergovernmental Panel on Climate Change’s and the International Energy Agency’s reports on reaching net zero by 2050.”
On top of that, if the oil and gas industry were to take seriously the pledges they’ve made and the prescriptions of the IPCC to avoid climate disaster, they’ll end up with hundreds of billions of dollars’ worth of “stranded assets”: oil and natural gas that simply has to be left in the ground and thus taken off the companies’ books.
That process could trigger the largest bankruptcy in the history of the world, which is probably why they’re doing everything they can, PR-wise, to prevent the kind of accountability that may force them to change their behavior.
So, instead of trying to regulate or engage in a protracted and expensive PR battle with these companies, or bail them out when they go down in flames, why don’t we just buy them now?
The entire market capitalization of ExxonMobil, the largest US oil company, is a mere $451 billion, and we could purchase a controlling interest in the company for a fraction of that. Even if we splurged and bought 51% of shares in the open market (far more than necessary), that would only be a $230 billion expense.
Remember, we poured $6 trillion into keeping our economy afloat during the Covid pandemic year of 2020.
Just the stimulus checks that showed up in our mailboxes totaled $804 billion, we passed out an additional $567 billion in unemployment checks, and gave over a trillion dollars to American corporations, most of which will never be paid back (particularly the millions the Trump family and their buddies got).
We put $331 billion into our healthcare system to deal with the crisis, and delivered $254 billion to states and cities. Our schools and colleges got another $231 billion, and just the airline industry itself took home $73 billion. Rent subsidies, childcare support, and nutrition assistance added up to $166 billion.
Covid was bad, but we’re talking here about the survival of human civilization over the short term and the death of most life on Earth over longer time horizons if we don’t stop the fossil fuel companies from interfering with our nation’s and international efforts to transition to renewable energy.
And interfere they are.
Every single member of the Republican Party, so far as I can find, is in the bag for them: all are either blocking any actions to deal with greenhouse gasses, denying even the existence of global warming, or both.
“Conservative” radio and TV networks, shows, and hosts are also recipients of the industry’s largess to the point that they also deny the crisis our nation and world are experiencing right now.
So we can pick up ExxonMobil for roughly what we spent just keeping our schools viable for a year and a half. The second largest oil/gas company operating in the US, Chevron, has a market capitalization of $342 billion, Shell is $195 billion, and Conoco Phillips is $161 billion.
Acquiring controlling interest in the entire bunch of them could cost less than we spent just on unemployment checks during the Covid crisis.
And if ever there was an industry that merited our buying it out and eventually retiring it to pasture — nationalization, essentially — the fossil fuel industry is it.
They manipulate prices to both enhance profits and swing elections, bribe their way through the halls of Congress, and pump out a steady stream of lies about climate change. All while pouring hundreds of billions into the money bins of their morbidly rich CEOs, shareholders, and senior executives.
America has a long and proud history of taking on companies that put profits over the public good during a time of crisis. For less than a quarter of the cost of Trump’s billionaire tax cuts we could move a long way toward saving our nation and the world from climate destruction.
But is it even possible? Does our federal government actually know how to run nationalized companies? Is there a precedent for anything even remotely like saving our nation and the world through this sort of process?
Turns out that history says an emphatic, “Yes!”
During the crisis of World War I, President Woodrow Wilson nationalized the country’s railroads, phone companies, and telegraph operators. He did the same with the nation’s radio networks and radio stations. All were returned to private ownership after the war, but that temporary nationalization helped get America through the crisis.
President Franklin D. Roosevelt did the same during World War II, nationalizing airplane manufacturers, gun manufacturers, over 3,300 mines, the nation’s railroads, dozens of oil companies, Western Electric Co., Hughes Tool Co., Goodyear Tire and Rubber, and even one of the nation’s largest retail outlets, Montgomery Ward. He also nationalized 17 foreign companies doing business in the US.
After FDR died, President Harry Truman continued seizing companies that were using the war as an excuse to jack up profits to the detriment of the nation. He nationalized meatpacking facilities across the country, the Monongahela Railroad Company, the nation’s steel mills, and hundreds of railroad companies.
Like with Wilson’s nationalizations, nearly all were returned to the private sector after the war was over, although it took until 1965 before all were re-privatized. Many had had their boards of directors and senior management replaced with people who would put the interests of the nation ahead of their greed for profits.
In the 1970s, in the wake of the collapse of the Penn Central Railroad, President Richard Nixon oversaw the voluntary nationalization and transfer of 20 railroads into the newly created National Rail Passenger Corporation, now known as Amtrak.
In 1974 Congress created another nationalized entity to deal with freight rail, the Consolidated Rail Corporation (Conrail), which absorbed dozens of failing rail companies. Conrail was government held until 1987, when it was privatized in the then-largest IPO in American history.
In 1984, when the Continental Illinois National Bank and Trust Company was in a crisis, President Ronald Reagan’s administration oversaw the FDIC nationalizing it by acquiring an 80 percent ownership share in the company; it wasn’t re-privatized until 1991, and was bought by Bank of America in 1994.
Also in the 1980s, after Reagan recklessly deregulated the Savings & Loan industry, banksters made off with billions leaving the wreckage of crushed S&Ls all across the nation.
When the government agency that insured them, FSLIC, went bankrupt itself in 1987, Reagan and Congress created an umbrella agency — the Resolution Trust Corporation (RTC) — to nationalize over 740 of America’s S&Ls with combined assets of over $400 billion.
Their assets were sold back into the private market in 1995 as the RTC shut itself down, having averted a 1929-style banking crisis through temporary nationalization.
When George W. Bush was handed the White House by 5 Republican appointees on the Supreme Court, the nation’s airline security system was entirely in private hands.
The airlines’ minimum-wage security screeners failed miserably on 9/11, so Bush didn’t even bother with the normal acquisition process that would protect the hundreds of small contractors running security at airports across the nation.
Instead, Bush simply nationalized the entire system and created a government agency, the Transportation Security Administration (TSA), to take over airport and airline security.
President Bush also partially nationalized the nation’s airlines, creating the Air Transportation Stabilization Board that traded around $10 billion in loans to airlines in crisis (air traffic collapsed after 9/11) in exchange for company stock.
We (through our government) ended up holding 7.64 million shares in US Airways, 18.7 million shares of America West Airlines, 3.45 million shares in Frontier Airlines, 1.47 million shares in American TransAir, and 2.38 million shares in World Airways.
Congress had deregulated the nation’s banks in 1999 when Newt Gingrich’s Republicans pushed through an end to the Glass-Steagall Act and Bill Clinton signed it into law.
The resulting banking system crash in 2008 forced the Bush administration to nationalize the country’s two largest mortgage lenders (they held about 40% of all US mortgages), Freddie Mac and Fannie Mae.
The Bush administration then additionally nationalized a 77.9% share in AIG, a 36% share of Citigroup, and a 73.5% share of GMAC, forcing out GM’s CEO Rick Wagoner, who’d been a particularly terrible manager of that company and was actively lobbying against what Bush thought were America’s interests.
As President Barack Obama came into office in 2009, GM and Chrysler were on the brink of collapse. His administration created a new company, NGMCO, Inc., that nationalized the assets of GM and was 60.8% owned by the federal government.
GM was finally fully re-privatized by the Obama administration in 2013. Chrysler went through a similar process, although both the UAW and the Canadian government were part owners when it was temporarily nationalized.
Thomas M. Hanna, Director of Research at The Democracy Collaborative and author of Our Common Wealth: The Return of Public Ownership in the United States, compiled most of the data above in a brilliant paper titled “A History of Nationalization in the United States 1917-2009.”
Toward its end, he summarizes brilliantly the case for nationalizing — perhaps only temporarily — America’s largest oil and gas companies:
“In such times of political and economic crisis, policymakers of all ideological persuasions in the United States have never been hesitant to use one of the most powerful tools at their disposal: nationalization of private enterprises and assets.
“This included the Democrat Woodrow Wilson, who nationalized railroads, and the telephone, telegraph, and radio industries (among others), and the Republican Ronald Reagan, who nationalized a major national bank; the Democrat Franklin D. Roosevelt, who nationalized dozens of mining and manufacturing facilities, and the Republican George W. Bush, who nationalized airport security and various major financial institutions; the Democrat Barack Obama, who nationalized auto manufacturers, and the Republican Richard Nixon, who nationalized all passenger rail service.”
Today’s climate crisis dwarfs the threat of Nazism in the 1940s, Bin Laden’s 9/11 attack, the massive bank robberies that took place during the Reagan and Bush administrations, or even the Covid crisis. It literally threatens all life on Earth.
Yet the fossil fuel industry continues to fund climate denial and to lobby against any meaningful solutions, as we saw when every Republican in the Senate along with Joe Manchin killed the $500 billion investment in clean energy the Biden administration proposed in their Build Back Better legislation.
Squeals of “socialism!” and “Venezuela!” aside, we know how to nationalize industries that are working against our nation’s interests and we have done it before, repeatedly.
This time it’s not just about saving our banks, keeping our schools intact, or fighting a war. This time, it’s about saving the world.
Buy out the fossil fuel industry!