The oil god delusion: What ancient pantheists got right

Long, long ago, humans tried to make sense of the world by imagining whole pantheons of self-absorbed jerks with outsized power: so-called “gods” whose family quarrels, personal tantrums, dysregulated sexual behaviors, and violent insecurity about others doing anything even close to as well as them shaped the fate of all consigned to suffer in their world.

When following the news today, one has to hand it to the ancient pantheists:

They understood human society pretty well.

Today our pantheon is filled with a mess of 1%-ers: some old money powers-that-be who invest in media and politics behind the scenes, Silicon Valley grifters and influencers from new or coarsely used family money, a handful of world leaders coasting for decades on delusions of grandeur, and a select group of CEOs convinced that their profit matters more than the environment.

And they’re as harmful to human thriving as ever.

Maybe more so, on account of being real.

The oil gods and the rest of us

This week, Oil Change International published their September report, Planet Wreckers: How 20 Countries’ Oil and Gas Extraction Plans Risk Locking in Climate Crisis. As the cheerful title suggests, this research and advocacy group finds that 20 countries will be responsible for 90 percent of CO2 pollution “from new oil and gas fields and fracking wells planned between 2023 and 2050”. Far from helping us cap global warming at 1.5°C, as per international standards, these countries are tolerating industry growth that could make our climate goals unattainable.

According to the report, none of these 20 countries are acting as responsible “first movers”: global powers that committed in Glasgow in 2021 to “end their trade and development finance for fossil fuels by the end of 2022”. These 20 are countries with “high incomes, a high degree of ability to transition away from fossil fuels, and outsized historical responsibility for causing the climate crisis”. They could be leading the way for reform. And yet, even when they agree to support change, domestic policies do not reflect all the transformations required.

The US is the worst offender by this metric: the largest historical emitter of CO2, the country responsible for almost one in five global barrels in 2022, and the country “poised to be the world’s largest expander of oil and gas extraction from 2023 to 2050, singlehandedly representing more than one-third of planned global expansion”. The next four, Canada, Australia, Norway, and the United Kingdom, raise the overall number to 51 percent of planned expansion projects.

And the consequences could be dire. As the study authors note:

If these countries proceed with their new extraction plans, carbon pollution would be 190 percent over the 1.5°C budget, risking locking in more than a dangerous 2.0°C of warming. Already, nearly 60 percent of the fossil fuels in existing fields and mines must stay in the ground to keep global temperature rise to 1.5°C. Oil and gas expansion threatened by the Planet Wrecker countries would make this situation even more dire. To compensate for extraction from new fields and licenses, more than three quarters of the oil, gas, and coal within already active extraction sites need to stay in the ground.

Page 10, “Planet Wreckers”, Oil Change International, September 2023

But how can this be, when we also keep hearing about how we’re reaching “peak” demand for fossil fuels? Just this summer, the Canadian Energy Regulator modeled scenarios that would see a decline in oil and gas production as early as 2026, due to falling prices and demand amid new energy alternatives. And in March, Pioneer Natural Resources CEO Scott Sheffield argued that the US would never see another record-breaking year in oil production, due to natural limits.

So what in blazes is going on?

Sacrifices to the gods

We get a hint of an answer in how the International Energy Agency is trying to appeal to petro-states (countries heavily reliant on nationalized or private fossil fuel companies) to change their ways. This week Executive Director Fatih Birol ambitiously predicted that fossil fuels were reaching “the beginning of the end”. The IEA is expected to publish a promising projections report in October, which will find that oil, gas, and coal are set to reach peak usage this decade, and permanently decline thereafter, as international policies take effect. It’s not anywhere near fast enough to limit global warming to 1.5°C, but it’s a step in the right direction, and a rare bit of good news in a year of grim climate change reports.

So what’s the deal with all these commitments to new oil and gas projects, amid the blatant global turn toward renewables?

It’s not just about sustaining fossil fuels during the transition to green economies.

And it’s not just about Russia’s invasion of Ukraine, although US President Joe Biden expressly invoked that justification last October, when calling on energy companies not to use their profits for stock buy-backs or dividends:

“Not now. Not while a war is raging. You should be using these record-breaking profits to increase production and refining.”

No, it’s also deity thinking: acting as if with impunity. Acting as if, by sheer will alone, certain industry players can keep demand for oil and gas high enough to justify their last-ditch expansions in the field.

The hubris of such industry leaders is well known to regulators. Birol has been addressing oil execs all year in his IEA speeches, and most recently warned them that “new large-scale fossil fuel projects not only carry major climate risks, but also business and financial risks for the companies and their investors.” He noted that, while oil companies claim the world is underinvesting in oil and gas, they should pay attention to “the demand trajectories [the IEA] is seeing.” Failure to do so “could lead them into taking very unhealthy, unwise economic and climate risks.”

Citing financial hazard is perhaps the only way to get through to these actors, because environmental concern alone won’t cut it. However, the IEA has competition for oil and gas messaging from a financial perspective.

Last year, energy strategist Andrew Gillick told the Associated Press “folks that think oil and gas will be gone in 10 years may not be thinking through what this means. Both supply and demand will increase over the next decade.” This comment from an Enserva representative emerged amid a slew of concerns about the US’s 2022 Inflation Reduction Act (IRA): a document heralded as ambitious climate change legislation, despite being riddled with concessions to oil and gas.

The IRA does not guarantee local reductions in US oil and gas production. Instead, the act tethers the development of renewable energy to ongoing permissions for new fossil fuel leasing. The US government cannot use land for renewable energy development unless it has offered 2 million acres of federal land and 60 million acres of federal waters for oil and gas leasing in the previous year.

This is because the fossil fuels industry is still striving to expand, irrespective of social movements for change. Oil and gas players are trying to adapt to the new green economy in part by shifting to exports, which would allow them to offload C02 emissions while keeping production strong. And if local emissions are eventually offset by carbon sequestration? The US could still achieve the illusion of “net zero” while sustaining petroleum markets. Would emissions increase among countries buying US fossil fuels? Probably. Would there still be an uptick of local production emissions, along with other environmental pollutants? Definitely.

But does it really matter if locals want a different future for their natural resources?

What business is it to mere civic mortals, if the gods of this immortality-seeking global industry decide to take their locally extracted products elsewhere?

Other pantheon members concur

The US is not the only country in the “Planet Wreckers” list openly committed to growing its oil and gas economy amid an overall transition to green energy.

While announcing over 100 new North Sea drilling licenses, UK Prime Minister Rishi Sunak vowed this July to “max out” the kingdom’s oil and gas reserves. Sunak claimed that this growth would be compatible with net zero plans, because it would support a transitional reliance on fossil fuels on the way to green technologies. Energy experts disagree, because importing along existing UK oil and gas pathways is far less environmentally destructive than breaking new ground. Nevertheless, Sunak is also keen to start drilling into the UK’s “largest untapped reserves”, of around 500 million barrels in the Rosebank field.

Meanwhile, this summer Canada released new climate adaptation and resilience plans. Unfortunately, they downplay any role for energy transitions, even when discussing vital infrastructure reforms and disaster prevention projects. This is in part because, while the Canadian oil industry acknowledges a global peak on the horizon, it too is keen to develop oil and gas for foreign markets amid rising local interests in green reform. MEG Energy CEO Derek Evans deferred to the invisible hand of the markets when he argued that business is driven by demand, not growth, and anticipates a future where “we can reduce the carbon footprints on both of those products, but … should be selling those and supplying the rest of the world.”

Who is actually driving this demand, though?

The Canadian Association of Petroleum Producers (CAPP) boasted $40 billion in fossil fuel investment this year, up 11% over last year’s figures, and driven significantly by the return of global markets. The IEA predicts that Canada will hit an all-time record for oil production this year, with all the consequences for carbon emissions that this entails. Although there are 25 proposed carbon capture projects in Alberta, CAPP cites ongoing negotiation with provincial and federal powers for how slow they’ve been to take off. Meanwhile, there are tens of billions of dollars waiting in the wings for further investment in fossil fuel projects themselves.

Why is there such a disconnect between public interest in green technologies, and industry interest in upping petroleum production? Because oil and gas markets are not beholden to Canadian citizens. They’re following capital investment, which currently favors fuel projects over carbon sequestration. It does not matter that citizens would be just as content with green jobs as petroleum ones, and would probably prefer fewer climate disasters to boot. Nor does it matter if local citizens are keen to reduce their reliance on petroleum products in general.

So long as the state still props up oil and gas with expansive leasing agreements and subsidies, these industries will keep extracting locally and selling overseas, if necessary, to ensure their own immortality.

After all, capitalism is never beholden to a single state. Why should its top performers aspire to anything less than omnipresence, too?

Rushing toward the end times

But why do investors even want to drive up investment in a dying industry?

Well, that’s the bitterly funny part: because it’s dying. If oil and gas demand are indeed reaching global peaks, as the IEA suggests, then the next few years might be the last chance for major investors to make it big on fossil fuels before whole economies collapse: never to disappear for good, but certainly to become less lucrative in the same, tried and true ways.

And if pursuing this last stab at huge returns only tips us further into climate crisis? If all these rushes to open new extraction sites only add to existing carbon strain?

Well, so be it, for the folks who think they’re living on Mount Olympus.

Maybe they are, for all that states keep deferring to their ruinous power games.