Are You Secretly Invested in Oil?
Conscientious citizens the world over are disgusted by the oil industry, hating the environmental destruction, greed, corruption, violence, and political repression it spawns. They refuse to purchase shares of oil companies because they do not want to invest in a destructive industry. Many support the growing movement which lobbies governments, foundations, and other large shareholders to divest their oil company holdings.
Yet, most such citizens, along with 99% of car owners, have a substantial, long-term investment in the oil industry parked in their driveway. Each gasoline or diesel-powered car represents a consistent, long-term source of cash flow for the industry. Fueling that car (assuming the U.S. national averages of 25 miles per gallon and 15,000 miles driven per year) requires about 600 gallons a year or 9000 gallons over the average 15 year life of the car. Those 9000 gallons translate into about $18,000 in cash flow to the oil industry and about 225,000 pounds of CO2 released into the air.
The projected cash flows from gas-powered cars underpin oil companies’ exploration and drilling. Without the steady, long-term cash flows provided by consumption of gasoline, the enormously capital-intensive oil exploration and drilling projects would become financially untenable and grind to a halt. The petroleum reserves of oil companies, especially in unspoiled and difficult to access areas, would become worthless and go untapped. For the oil companies, your gasoline-powered car is money in the bank.
People who buy new gasoline cars not only prop up the income projections of oil companies, they send a message to car manufacturers that electric cars aren’t wanted. They send a message to governments that building a charging infrastructure can be further delayed, and to oil companies that it will be business as usual for a long time to come. They perpetuate an unhealthy and unsustainable status quo.
Until recently, conscientious citizens could fairly claim, “What alternative do we have? We need to get around just like everyone else.” That excuse is losing force. Electric and plug-in hybrid vehicles now offer excellent alternatives to gas vehicles. Many fully-electric cars, including the new Nissan Leaf and Tesla, offer more than 100 miles of range. The Chevy Bolt, which will come onto the market in late 2016, will offer 200 miles of all-electric range and the space of a Toyota Corolla, at a cost of about $35,000 For those needing more range than a fully-electric car can offer, the plug-in BMW i3 with range extender provides 80 miles of electric range (sufficient for 95%+ of most vehicle trips), backed up by a small gasoline-powered engine for longer trips. The operating cost of electric cars is less than for gasoline cars. Even at today’s low gas prices, an electric car in the U.S. costs about $0.03 per mile in energy cost, compared to about $.10 per mile for a gas car. In most of Europe, the cost is about € 0.03 per km, compared to about € 0.10 per km for gas cars.
The environmental benefits of electric cars are enormous. Most electric cars are three times as efficient as gas-powered cars per unit of energy. Where electricity is predominantly generated from carbon-free sources, such as in France, Spain or Washington State, the electric car results in less than 10% of the carbon emissions caused by a petroleum-powered vehicle. A small 3kW rooftop solar system (costing less than $10,000) provides sufficient energy to power an electric car for 30+ years.
The continued use of gasoline-powered cars is a major hindrance to the effort to meet the Paris climate goals of limiting global warming to 2 degrees. Vehicle emissions constitute about 30% of total CO2 emissions in the U.S. and many other industrialized countries.
In Laudato Si, Pope Francis wrote:
A change in lifestyle could bring healthy pressure to bear on those who wield political, economic and social power. This is what consumer movements accomplish by boycotting certain products. They prove successful in changing the way businesses operate, forcing them to consider their environmental footprint and their patterns of production. When social pressure affects their earnings, businesses clearly have to find ways to produce differently. This shows us the great need for a sense of social responsibility on the part of consumers. ‘Purchasing is always a moral – and not simply economic – act.’ Today, in a word, ‘the issue of environmental degradation challenges us to examine our lifestyle.” (Laudato Si, Para. 206)
Pope Francis is right. We need to use our buying power to express our values and our morals. For conscientious people, that means disinvesting in the oil industry and buying electric cars or other non-petroleum transportation options instead. If we are conscientious with our money, business will follow us to a cleaner, lower-carbon future.