Don’t look now but the anti-fossil fuel movement is quickly building momentum.
Climate activists have campaigned against oil, gas, and coal for years. And while legislation in the U.S. Congress addressing climate change seems as remote as ever, outside of the beltway, the anti-fossil fuel movement is building support at a breakneck pace.
Consider the series of wins that environmentalists continue to rack up.
The Keystone XL pipeline seemed destined for approval several years ago with an oil-friendly Secretary of State in Hillary Clinton and a largely indifferent president in the White House. That all changed when environmental groups led by 350.org made the project a defining issue for the Obama administration. Nearly five years after protests began, the pipeline appears close to being killed off for good.
Or look to New York, where late last year, after several years of grinding opposition, Governor Andrew Cuomo finally banned fracking indefinitely. With vast reserves of shale gas located in the Marcellus and Utica shales in large swathes of southern and western New York, the fracking industry was stunned by the defeat.
That decision was in no doubt influenced by the People’s Climate March in New York City a few months earlier, which saw an estimated 400,000 people clog up city streets, calling for action on climate change. The march has been described as the largest rally for climate action in world history. Meanwhile, polls continue to show strong support for government action to reduce greenhouse gas emissions, including around half of Republicans.
California Governor Jerry Brown surely paid close attention to the fracking ban in New York. He is under increasing pressure to follow suit. Thousands of protestors rallied on February 7 in Oakland to demand a ban on fracking in the Golden State. Gov. Brown already has a very strong record on clean energy and environmental issues, including overseeing the roll out of a strong cap-and-trade program, continued growth in the nation’s largest solar industry, and the passage of an ambitious renewable portfolio standard. But environmentalists continue to dog him on fracking, and may yet force his hand.
Meanwhile, even in states that are friendly to drilling, the red carpet for oil and gas companies is no longer being rolled out. The city of Denton proved that fracking bans are possible even in red states like Texas. Voters approved an initiative in 2014 to block fracking within city limits, overcoming an onslaught of campaigning by the industry.
Elsewhere, Ohio Governor and rumored presidential candidate John Kasich (R) has made an aggressive push to increase taxes on oil and gas production. Having previously called the current tax regime on the industry a “complete rip off” for Ohioans, Kasich renewed his call in February 2015 for much higher taxes on oil and gas production.
Even in Pennsylvania, ground zero for the shale gas revolution, the business climate is not as friendly as it once was. Pennsylvania proved to be one of the few exceptions in an overwhelming victory for Republicans in the 2014 mid-term elections, electing a Democrat in no small part because of the former excessively gas-friendly Governor Tom Corbett. The new Governor is now proposing a 5% tax on gas extraction, a level that could bring in $1 billion for education.
But evidence of a growing backlash to fossil fuels is probably most obvious with the iconic divestment campaign, which is tallying up wins and gaining attention. Calling on major financial institutions to divest their assets from fossil fuel companies, the movement is expanding worldwide.
February 13-14 was dubbed “Global Divestment Day,” and a 2013 study from the University of Oxford found the fossil fuel divestment campaign growing faster than any previous divestment movement. In the past month alone, The New School in New York announced that it would fully divest from fossil fuels. And Norway’s massive $850 billion sovereign wealth fund revealed that it has divested from 114 companies in recent years, aimed mostly at steering clear of coal companies, but also the Canadian tar sands.
Proof of the growing success of the divestment movement can be gleaned from the oil and gas industry itself, which launched a public relations blitz in mid-February attacking divestment. Funded by the Independent Petroleum Association of America, the “Divestment Facts” campaign sought to undermine the rationale for divestment. The existence of such a campaign suggests that oil and gas companies are beginning to see divestment as a real threat, an idea that needs to be snuffed out before it gets too big.
To be sure, the world is still awash in fossil fuels, so much so that prices have collapsed under the weight of too much supply. Nevertheless, the anti-fossil fuel movement is making strides in pushing back the industry.
Originally written for OilPrice.com, a website that focuses on news and analysis on the topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.