“We are vastly underpaying for fossil hydrocarbons, given what they do for us, and given what their widespread use is doing to the biosphere.” —
No 2801 by fw, November 30, 2021 —
At the height of the carbon pulse, for us to speak about the subsidies that governments provide fossil fuel companies, is really inconsequential and energy blind. Compared to the power, affordability, and vast physical work – 500 billion human laborers worth – that fossil carbon gives humans, the subsidies we give them is a rounding error. Society is now acutely aware of the problems with too much pollution on our one and only planet. Despite the accounting sleight-of-hand, the core sentiment of the IMF report on fossil fuel subsidies is correct – and that is, we are vastly underpaying for fossil hydrocarbons, given what they do for us, and given what their widespread use is doing to the biosphere. Fossil hydrocarbons are the enablers. Exxon and Shell, and the like, are the distributors. We are the addicts. Blaming oil and gas companies is easy but misguided. There is no possibility of a greener planet unless humanity in total consumes less of everything, not just fossil energy – because fossil energy is in everything.” —Nate Hagens, Myth #5
Briefly, Nate Hagens is a brilliant systems synthesist and well-known speaker on the big-picture issues facing human society. Before becoming a professor of an Honors seminar at the University of Minnesota, Nate was President of Sanctuary Asset Management and a Vice President at the investment firms Salomon Brothers and Lehman Brothers. He has appeared on PBS, BBC, ABC and NPR, and has lectured around the world. He holds a Masters Degree in Finance with Honors from the University of Chicago and a PhD in Natural Resources from the University of Vermont.
Nate’s Myth #5, titled, “It’s the fault of Fossil Fuel Companies (and subsidies), is just one of 33 myths that Nate covered in his May 21, 2021 Earth Day talk, Earth and Humanity: Myth and Reality. The beauty of his 2hr, 52min long, information-rich talk is that it is more of an indexed reference tool for recurrent consultation than a lecture meant to be assimilated in one sitting.
Below is my repost of Nate’s 6-minute talk on a growing theme in modern media and universities — that fossil fuel companies are evil. And his sub-theme is that if we politically stopped giving fossil fuel companies subsidies, we would quickly move to a green clean future. * [See, for example, Taxpayers have spent at least $23B on pipeline subsidies and supports since 2018: report. By David Thurton, CBC News, July 6, 2021 – “As calls to end government subsidies of fossil fuels grow in intensity, a new report finds that Canadian governments have allocated billions of taxpayer dollars to building and expanding new pipelines in the past year alone.”]
As Nate points out in the above introductory excerpt, if anyone is to blame for “the problems with too much pollution on our one and only planet” caused by the burning of fossil fuels, it is us: “There is no possibility of a greener planet unless humanity in total consumes less of everything, not just fossil energy – because fossil energy is in everything.”
My repost, below, includes an embedded video of Nate’s 6-minute, Myth #5 talk, along with my transcript, and two graphs. The video segment of Myth #5 starts at the 1:57:03 time stamp. (Although segment #5 ends at 2:03:01, the video will continue to play until it is stopped manually.)
At the bottom of this post is a complete time-stamped list of the titles of all of Hagens’ 33 myths, plus his opening Introduction and closing Interventions (and Wild Ideas). The myths can be watched in any order — but, as Hagens mentions, the order decided on seems logical.
For those who would prefer to watch Nate’s address on You Tube, without the transcript, click on the following linked title, which is also pre-set to begin at 1:57:03.
Myth #5: It’s the fault of Fossil Fuel Companies (and subsidies) by Nate Hagens, Earth and Humanity: Myth and Reality / You Tube, May 16, 2021
TRANSCRIPT: Myth #5 (Starts at 1:57:03, Ends at 2:03:01)
There’s a growing theme in modern media and universities that fossil fuel companies are evil. And its sub-theme is that if we politically stopped giving fossil fuel companies subsidies, we would quickly move to a green clean future.
This myth, comforting as it is, has to be addressed. Okay, on Earth Day especially, I have to point this out:
From the human perspective, fossil fuels aren’t “bad” any more than deer or mice are bad. Humans are foraging for energy at a vast scale using hydrocarbons to the detriment of nature. But these hydrocarbons and the benefits they provide are also supporting vast goods and services and life for billions.
Having said that, from a non-human perspective – say a dolphin alive now or in a hundred or a thousand years – fossil fuels are unequivocally bad. And if dolphins had a sound for evil, they would use it to describe fossil hydrocarbons.
From the perspective of the natural world, it would have been better off, far better off, had humans never puzzled out how to add vertical farming – a.k.a. drilling of ancient sunlight — to their repertoire of horizontal farming the land.
But this myth about fossil fuel companies and subsidies – let’s get back to that.
Facebook isn’t inherently evil. It’s how we’re “using” Facebook and society that has deleterious impacts. There are many corporation processes, and things, that aren’t inherently bad. Fossil fuels are near the top of that list.
Fossil fuel companies are organizations of people following the same rules as other corporations that society created. The difference they provide [is] a highly polluting, increasingly-dangerous-to-the-biosphere, product that people are starting to become aware of — not sandwiches or computers or furniture. However, their product, despite its pollution, actually enables the sandwich, computer, and furniture companies to exist and to be profitable.
Okay. First of all, let’s consider the myth that without subsidies fossil fuels couldn’t compete and we’d gradually stop using them.
This myth has several layers.
First, the IMF [International Monetary Fund] recently had a report stating the total subsidies to fossil fuels amounted to over five trillion dollars per year. This caused quite an uproar when it came out because these subsidies would have amounted to seven percent of global economic output.
But it turns out there was a bit of semantic gimmick involved. Over 90% of what the IMF referred to as “subsidies” were actually “externalities” * — those impacts on humans and nature outside of the economic system. [*externalities — In economics, externalities are a cost or benefit that is imposed onto a third party that is not incorporated into the final cost. For example, a factory that pollutes the environment creates a cost to society, but those costs are not priced into the final good it produces.]
It’s true these impacts are real, but if we internalized all externalities there wouldn’t be a single industry on earth that would remain profitable.
Okay. So, of the 500 billion or so left of fossil fuel subsidies, over 90% of those are not to fossil fuel companies themselves, but rather to poor people, mostly in oil-producing countries like Venezuela, Iran, Malaysia, for their citizens to be able to afford gasoline and diesel.
Yes, these subsidies are real and lead to greenhouse gas emissions, but they are not being “given” to, for example, Exxon or Shell. Most oil subsidies are tax credits and not subsidies.
All industries, corporations, and most people get tax credits. If you go out and buy an electric vehicle, today you get a tax credit, not a subsidy. But it does promote more EV sales and manufacture.
Same case with fossil energy. These tax credits for oil and gas came into being 40 years ago when governments realized how important energy was to our economies, they put in tax laws to incentivize drilling.
But these are in the 10 to 20 billion-per-year range, not 5 trillion.
When compared to renewable technology, feed-in tariffs and the like, these fossil fuel subsidies and tax credits are very small in comparison.
The blue columns are direct subsidies to fossil fuels in the USA, compared to the gray bars which are renewables. Renewables get many more subsidies – apples to apples.
A final and most important point.
At the height of the carbon pulse, for us to speak about the subsidies that governments provide to fossil fuel companies, is really inconsequential and energy blind. Compared to the power, affordability, and vast physical work – 500 billion human laborers worth – that fossil carbon gives humans, the subsidies we give them is a rounding error.
Society is now acutely aware of the problems with too much pollution on our one and only planet. Despite the accounting sleight-of-hand, the core sentiment of the IMF report on fossil fuel subsidies is correct – and that is, we are vastly underpaying for fossil hydrocarbons, given what they do for us, and given what their widespread use is doing to the biosphere. Fossil hydrocarbons are the enablers. Exxon and Shell and the like are the distributors. WE ARE THE ADDICTS!
Blaming oil and gas companies is easy but misguided. There is no possibility of a greener planet unless humanity in total consumes less of everything, not just fossil energy – because fossil energy is in everything.
***** Ends at 2:03:01 *****
LIST OF THE 33 MYTHS (plus opening introduction, Interventions (and Wild Ideas and Closing thoughts)
To go directly to the beginning of any numbered myth or to the opening Introduction and closing Interventions and Wild Ideas, just click on the hyperlinked time stamp in front of the term “Myth” .
Time stamps: // 0:04 Introduction // 2:20 Myth #33: The Experts Have ALL the Answers // 4:16 Myth #32: Humans Are Separate From Nature // 6:45 Myth #31: Humans Are Mostly Selfish // 12:17 — Myth #30: More Is Better // 18:12 Myth #29: “Someday I’ll Have enough” // 21:18 Myth #28: We Care About the Future // 23:38 Myth #27: Everyone Has Their Own Truth // 26:37 Myth #26: Truth Matters // 29:31 Myth #25: Energy Is Merely a Commodity // 34:28 Myth #24: The American Dream is Based on Hard Work and Cleverness // 36:05 Myth #23: Oil: The USA Will Be the Next Saudi Arabia // 41:46 Myth #22: We Can Always Get More Resources if We Have More Money // 44:42 Myth #21: Renewables Can Power THIS Civilization // 50:55 Myth #20: In the future we won’t need oil due to Peak Demand!! // 55:01 Myth #19: We Can Achieve Net Zero!! (by 2050 or any date) // 59:54 Myth #18: As Earth runs out of resources, We’ll Colonize Outer Space!! // 1:02:26 Myth #17: Growth Is Forever // 1:05:04 Myth #16: GDP Is the Right Goal for Society // 1:10:56 Myth #15: Overpopulation Is the Main Driver // 1:15:21 Myth #14: Technology Will Solve It // 1:21:16 Myth #13: The Environment Is Part of the Economy // 1:24:04 Myth #12: The Natural World Is Ours // 1:27:03 Myth #11: Climate Change Is the Core Problem // 1:32:44 Myth #10: Billionaires and Politicians Are in Charge // 1:38:56 Myth #9: Financial Markets Give Us the Right Signals for the Future // 1:43:22 Myth #8: Stimulus Is Permanent // 1:48:37 Myth #7: We Need to Crash the System to Get a Fresh Start // 1:52:43 Myth #6: The Use of Nuclear Weapons Is Unthinkable // 1:57:03 Myth #5: Fossil Fuel Companies Are at Fault // 2:03:01 Myth #4: Capitalism Is to Blame // 2:07:54 Myth #3: Humans Are Bad // 2:11:37 Myth #2: We Face a Shortage of Energy // 2:14:17 Myth #1: We Are Doomed // 2:19:56 Interventions (and Wild Ideas)
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