First, let me compliment Marathon Oil Corp. for doing something nearly unheard of in corporate America: The company cut the pay of its directors and top managers by 20 percent this year after a disastrous 2020 caused by the pandemic.
To be sure, mine is a back-handed compliment. Regular readers know I’m no fan of big corporations, especially those that profit from extracting and selling fossil fuels. Not to worry, though. I’m not going to launch into a screed about rapacious corporate culture and outrageous greed. And in the case of Marathon, it’s far from the worst of the energy companies. From what I’ve gleaned from news reports and its proxy statement, Marathon is managed well. I’m only using it as an example; any other large oil and gas producer would have served to make my point.
So with that bit of throat-clearing, what am I writing about?
A couple of weeks ago I read an article in The Guardian newspaper headlines: “A US oil company cut nearly 2,000 jobs — and reaped $2.1bn in pandemic benefits”. Here’s the link:
The article begins with a look at the plight of recently laid off Louisiana oil and gas workers and their bleak prospects for finding comparable jobs in a state where 18,000 workers in their field lost jobs in 2020. Is it surprising that Marathon laid off workers in 2020 (a total of 1,920 across the country)? Of course not. That happens in severe economic downturns. And layoffs will continue as demand for fossil fuels tapers off, as it must if our grandchildren are to have any chance of living in a climate that’s anything like what recent generations have enjoyed.
So our government, working hand in glove with lobbyists from the oil and gas industries, crafted a bill that ostensibly made it possible for companies to retain employees during the downturn. You’ve heard of the PPP — the Paycheck Protection Program, a part of the CARES Act. These were grants made directly to companies that enabled them to retain employees. The parish I serve in Louisiana (St. Anna’s in New Orleans) received such a grant and used it to plug a budget gap, thus enabling us to pay our staff and lay off no one. The PPP worked in that case.
However, the CARES Act didn’t just help the little guy. It also benefited large corporations. Marathon received tax refunds and outright cash payments totaling about $2.1 billion at the same time it lopped 1,920 employees off of its payroll last year. It was all perfectly legal, and who can criticize Marathon management for taking advantage of generous tax breaks and government handouts during a severe business downturn? Their lobbyists wrote the law with enough loopholes to allow them to have their cake ($2.1 billion worth) and lay off employees. I suppose Marathon would say more employees would have been laid off without a $2.1 billion gift from Washington.
So those billions of dollars in tax breaks and grants didn’t prevent layoffs. They merely shored up Marathon’s financials during a difficult period. The company spent $2.6 million in 2020 on Washington lobbyists whose work paid off handsomely — but not for workers on its bottom rungs. The real winners were Marathon’s shareholders, its board of directors, and its top management. But the 1,920 laid-off employees? Finding jobs that pay comparably outside of the oil and gas sectors will be tough.
Now, let’s look at this story through another lens — an environmental one.
Marathon makes money by extracting, refining and selling fossil fuel. The greater its sales, the more our climate deteriorates. We all know this the model can’t last. Consider last week’s 110-degree-plus temperatures at my sister Gracie’s home in the Cascades.That’s about 40 degrees hotter than normal. Even if the flat-earthers of the Republican Party don’t get it, the nation as a whole does — we must stop burning fossil fuels at the current rate to protect the environment.
If we do, oil and gas consumption will slow and some of the industry’s workers will become redundant. But they shouldn’t have to confront this seismic change without help. Isn’t it the proper role of government to help cushion the blow with creative programs to re-train them for other careers while helping them pay their bills with long-term unemployment aid? I’m not advocating permanent unemployment payment but, say, a year’s worth.
Instead of spending money to support laid-off workers, though, our government shored up the balance sheets of private corporations. Their highly effective lobbyists helped write laws that essentially prolonged the prosperity of their corporate clients. In doing so, we’ve enabled energy companies to continue extracting and refining more fossil fuels. When viewed through the environmental lens, this is bad policy.
Our governments — both state and federal, both Democratic and Republican — have for generations subsidized the fossil fuel industry with generous tax breaks and other incentives. I suppose it was justified by the theoretical imperative that our country become energy independent. But it’s no longer justified and I have no confidence that the Biden administration will do anything to begin dismantling the myriad tax laws and government incentives that encourage fossil fuel consumption.
As a nation we haven’t summoned the will to tackle climate change aggressively; indeed, we’ve done the opposite by continuing to infuse public money into oil and gas companies. If we ever do cut off the money, these companies won’t suddenly disappear. But they will have to shrink and alter their business model. Any government largesse directed their way must encourage this while protecting workers who will have to find new careers.
If our elected officials can’t get it done, then our political system has failed us. I don’t say that lightly. The two-party system to which we’re wed isn’t conducive to bold moves, particularly when it comes to attacking extremely complex crises like climate change. All this would be daunting enough, even if we all agreed there is a crisis. But we have one party that flat-out denies the planet is warming and that won’t change its mind unless its emperor, His Orangeness, changes his. The other party is split between two groups: One that is made up of establishment politicians in thrall to “Sen. No” from West Virginia and that recoils at the thought of bold action; and the other, rambunctious progressives who advocate drastic change at almost any cost. Count me among the progressives.
As I’ve said before, I’d welcome an evolution toward more of a parliamentary system, consisting of multiple parties. But I don’t see our situation changing unless and until the Republican Party rejoins the civilized world.
One can hope.