Oil & Gas Journal opinion piece / riots in Santiago, Chile ......................................
THE EDITOR’S PERSPECTIVE
Oil & Gas Journal
Nov. 11, 2019
Protests show flaws
in assumptions about
future regulation
by Bob Tippee, Editor
Mere coincidence can be distinctly instructive.
While the New York attorney general’s office
argued a shareholder fraud lawsuit against
ExxonMobil, riots were rocking Santiago, Chile.
Connecting the events are heavy-handedness
with climate change.
The state of New York says ExxonMobil
doesn’t adequately account for future regulation
related to climate.
The case assumes strict regulation will
seriously devalue oil and gas assets and concludes
shareholders should know the risk so
they can dump their holdings.
The argument comes directly from climate
activists, who try to make political ambitions
come true by insisting they already are.
They want governments to tax affordable
energy into disuse while lavishing incentives on
costlier alternatives like solar power and wind.
But governments trying to oblige usually
encounter backlash and moderate or scrap the
effort.
Chile is the most recent example. Protests
erupted on Oct. 25 in response to mass transit
fare hikes.
Some observers blame the increase on rising
oil prices. But oil prices are falling.
Fares increased because Metro de Santiago
converted its subway system, Latin America’s
second largest behind Mexico City, to renewable
energy, mostly solar and wind.
Yes, the protests derive momentum from
social tension born of income inequality. But
costs stemming from the forced use of expensive
energy provided the initial shove.
The Chilean protests also coincide with the
approach of an international climate summit.
The UN’s 25th Conference of the Parties,
addressing implementation of state and
environmental activism embodied in the 2015
Paris Climate Agreement, was to have been
held Dec. 2-13 in Santiago.
Because of the protests, the Chilean government
withdrew the welcome.
COP25 originally was to have been held
in Brazil. But the government there abdicated
after Brazilians elected a president loath to impose
the economic pain of climate mitigation.
Events increasingly indicate that assumptions
made now about future climate regulation
will prove to have been exaggerated. New
York lawyers arguing otherwise aren’t paying
attention.
In climate politics, they should see, exaggeration
is everything.
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