Report from CIEL describes COVID-19 impacts on O & G industry

Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries

From the Center for International Environmental Law (CIEL), April 2020

Amidst a global pandemic caused by the novel coronavirus, the oil, gas, and plastic industries are exploiting the crisis by aggressively lobbying for massive bailouts and special privileges in a desperate attempt to revive an oil and gas industry already in decline.

Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries documents how long-term systemic declines in the oil and gas industry had been accumulating long before the coronavirus pandemic emerged. Compounded by the impacts of the pandemic and related economic crisis, the industry’s collapse has accelerated, with leading companies losing an average of 45% of their value since the start of 2020.

While the current crises have exacerbated the industry’s collapse, its underlying risks remain unchanged. Ultimately, government bailouts and regulatory rollbacks will not reverse the inevitable decline of the oil, gas, and plastic industries.

Recommendations:

>> Public Officials taking policy action to respond to COVID-19 and the economic collapse should not waste limited response and recovery resources on bailouts, debt relief, or similar supports for oil, gas, and petrochemical companies.

>> Institutional Investors and Asset Managers should recognize the overwhelming evidence that the risks of continued investment in fossil fuels now substantially outweigh the benefits, and they should rebalance their portfolios to eliminate their exposure to volatile and declining oil and gas assets.

>> Frontier Countries considering whether to open their lands, waters, and democracies to new oil and gas extraction should urgently reassess their prospects in light of the collapse in oil prices and demand, demonstrated severe risks of economic dependence on volatile oil markets, ongoing long-term decline of the sector, and its fundamental incompatibility with climate action.

>> Local Communities and Decisionmakers should reject demands from the oil, gas, and petrochemical sectors for public subsidies, tax abatements, lax environmental enforcement, or other special concessions. They should interrogate industry promises of long-term sustainable employment actively and skeptically, and they should require evidence to support those claims that goes beyond simplistic assumptions of market growth. In the rare circumstances where these burdens are met, affected communities should require project proponents to irreversibly commit the funds required to restore communities and the environment when the project reaches the end of its economic life.

Read the full report here: Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries, CIEL, April 2020, pp. 28.

CIEL Overview — Since 1989, the Center for International Environmental Law (CIEL) has used the power of law to protect the environment, promote human rights, and ensure a just and sustainable society.

>>> CIEL (Headquarters), 1101 15th St NW, 11th Floor, Washington DC, 20005. E-mail: info@ciel.org

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See also: Bankruptcy looms over U.S. energy industry, from oil fields to pipelines – Oil & Gas 360, April 23, 2020

More shale producers are expected to seek bankruptcy protection in coming weeks, industry and banking sources say, following Whiting Petroleum, which announced such steps earlier this month. Many small and mid-sized producers, including Chesapeake Energy Corp., have retained debt advisers.

The forecast loan default rate for 2020 among energy companies is 18%, according to Fitch Ratings, while nearly 20% of all energy corporate bonds are trading below 70 cents on the dollar, indicating distress, according to data from MarketAxess.

Seneca Lake is largest Finger Lake

Pledge to Protect Seneca Lake – “We Are Seneca Lake”

UPDATE: This cold morning, Wednesday, Nov. 19, we are having an extremely successful blockade. Now in their fifth hour today, 12 Seneca Lake Defenders are continuing our blockade of Crestwood. 7 are at the north gate, 5 at the south gate.  Yesterday, Tuesday, there were eight (8) arrested here.  Ten (10) arrested on Monday!

PLEDGE TO PROTECT SENECA LAKE (Largest Finger Lake)

Because I know–

• that Seneca Lake is the largest body of fresh water wholly contained within the New York State, creates a climate perfectly suited for the growing of wine grapes, is a world-class tourist destination and serves as a source of drinking water for 100,000 people;

• that Houston-based Crestwood Midstream plans to store highly pressurized natural gas (methane) and liquefied petroleum gases (butane and propane, also known as LPG) in abandoned salt caverns near the lake;

• that old, unlined salt caverns are dangerous vessels for the storage of flammable gases (as was illustrated in Hutchinson, Kansas when salt cavern-stored natural gas leaked through subterranean fissures and fractures and caused deadly explosions seven miles away) and can also be structurally unstable (as was illustrated by the 1994 collapse of a salt cavern in Livingston County, New York, in a calamity that created sinkholes, methane-contaminated basements, and a permanently poisoned drinking water aquifer );

• that Seneca Lake caverns are vulnerable to roof collapses that could allow pressurized gases to escape, as is evidenced by the 400,000-ton roof collapse that has already occurred in a Seneca Lake salt cavern now slated by Crestwood for natural gas storage;

• that the Federal Energy Regulatory Commission, over the strenuous objections of citizens and independent geologists, nevertheless approved Crestwood’s natural gas storage expansion plan in May 2014;

• that on August 11, 2014, the New York State Department of Environmental Conservation (DEC) called a temporary halt to Crestwood’s plans to stockpile LPG in the Seneca Lake salt caverns by announcing a special Issues Conference to investigate ongoing health, safety, and environmental concerns of lakeside gas storage here;

• that one day later, on August 12, Crestwood outrageously announced a plan to commence construction of a compressor station to pressurize natural gas for underground storage in salt caverns ;

• that dozens of winery and business owners from the Finger Lakes region have traveled to Albany to urge Governor Cuomo to express opposition to BOTH natural gas and LPG storage on the grounds that they are an industrial menace to the tourism and wine industry;

• that, dozens of Schuyler County health care professionals have called for a halt to BOTH natural gas and LPG storage in these salt caverns on the grounds that they raise unacceptable risks of catastrophic accidents, injuries; and contaminated water and air.

• that it is a cynical shell game to move forward with the storage of one type of pressurized gas even while DEC has issued a cease and desist order on the storage of another type.

• that Crestwood is a dangerous intruder in our community, willing to flout the will of residents in flagrant disregard for our security and wellbeing, in order to build out the infrastructure for fracking;

Hence, I pledge–

to join with others in this region and elsewhere to engage in peaceful, nonviolent acts of protest, up to and including civil disobedience, until additional storage of LPG and methane in Seneca Lake salt caverns is halted.

I make this pledge to ensure the protection of Seneca Lake, which nourishes the vitality and enjoyment of the communities surrounding it; to prevent the destruction and poisoning of water, air, and food systems on which safety, health, and economic prosperity of our communities–and those of future generations—all depend. My abiding concern for the health and safety of my community compels me to take this action.

See also: “We Are Seneca Lake” and FrackCheckWV