A bi-weekly publication in support of informed public discourse. Our inspiration is I.F. Stone’s weekly, a digest published from1953 to 1971 that made sense of the news coming out of Washington. 

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Vol 4, No 3. May 3, 2020


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Why is Divestment so hard to achieve?


As we see it:

Eons ago, we decided to do a Bulletin on why it is so hard to get divestment going.  Divestment means weaning countries (plus institutions, investment and pension funds, corporations and people) off their fossil fuel dependence.

We had been perplexed why the President of Harvard University barely gave the time of day to experts who made the case.  But opposition to divestment is obviously not Harvard's alone. 

Where is resistance coming from - other than from the obviously interested parties?  Why are most countries so far behind on their Kyoto commitments?

This Bulletin looks at the barriers to divestment, the mostly invisible walls that short-circuit significant change.   Barriers do fall or are crushed, as the cliche goes, but only if we understand what and where they are.

We talk about six barriers. Some are well known (but not less important) but a few are not:

    • one: Opposition/religion
    • two:  The aftermath of the Covid crisis
    • three: Demand for energy
    • four: State dependence on fossil fuels (GDP, exports and employment)
    • five: Corporate dependence on fossil fuels (oil, gas and coal)
    • six: "Way of life dependence" on oil's by-products

Note that this Bulletin does not address pollution, CO2 emissions and it only indirectly addresses climate change.



Six barriers to divestment

One: Opposition

Divestment depends upon changing opinion and political priorities.  

If anything has been learned in the past few months, it is that opinions/beliefs can be solidified to the point where no one or nothing will alter them. 

Many evangelicals happen to live in fossil fuel rich areas. According to such publications as christianitytoday and baptistnews (see websites) and at least one academic book, some evangelicals believe that their beliefs have been vindicated by their good fortune from oil.  Some of these people also believe that it would be for all for the best if existence-as-we-know-it came to an end (the rapture), say by climate change.  

Fundamentalist or not, a substantial portion of the electorate in every country fails to appreciate - as a matter of belief - the significance of climate change.  For them, divestment holds no attraction.

Beliefs are not amenable to change nor are they responsive to science or argument.

We haven't seen much evidence yet about political priorities being changed.  Indeed there seems to be a certain pride taken in pursuing politics as usual...weird.


Two:   the Covid crisis

The Covid crisis plus the volatility of oil prices combine to make divestment seem more attractive, even to the point where those heavily invested in fossil fuels consider the possibilities.

However, as production ramps up afterwards, there will be limited time or political will to deal with alternatives to fossil fuels or with any major restructuring of energy production. As well, oil prices will rise, sooner or later.

Conservative governments everywhere (and the interest groups) will likely make a convincing pitch about the need to postpone divestment. They will say: debts run up during the crisis are so big that new initiatives (often supported through government programs but also dependent on corporate investment) will fall far down the list of actions requiring credit and money.


Three:  energy consumption

When divestment is considered, it is often in terms of energy consumption.

Sad to say, despite Kyoto style rhetoric, energy consumption remains firmly in the fossil fuel camp in most countries, and worldwide generally. Here then is the third barrier. Ever increasing energy consumption seems to be intimately connected with industrialized society's ways of life and also with economic development in the third and fourth worlds.


Moreover, government subsidies for fossil fuel development worldwide are huge! (oecd figures):

However, there is good news here: Reducing energy consumption is where most government action, albeit not nearly enough, has been focused.  Consumers are currently being nudged to indulge in less energy consumption, through smart metering, the purchase of energy-efficient products and recycling.  Here is where innovation is undertaken, although much is heavily subsidized by the state.

In short, this third barrier to divestment could at least crack.  Alternative energy has now become a major part of energy production in many countries; corporate greenwashing is not always rhetoric, several government's policies and subsidy programs have driven a search for alternatives to fossil fuels.

 Four: state dependencies

In the Middle East, and Russia, Nigeria and several other countries, the economy, employment and government revenues are so dependent on fossil fuel production that it is almost inconceivable that they would adopt measures to limit fossil fuel production.

In the Middle East, fossil fuel production accounts for up to 90% of government revenues. In Russia, by 2017, 63% of exports were fossil fuels, and fossil fuels comprised about 36% of the government budget.  Undoubtedly these percentages have increased in Russia in the past three years.

Other countries - for example, Canada, USA, the Scandis, India, China, and countries in the EU - are not quite so completely dependent on fossil fuels.  Even so, a significant portion (around 10%) of their exports, GDP and/or employment is fossil fueled. 

Note: Canada has the only major tar sands production. In the last three years 12 companies (and maybe more to come) withdrew from the Tar Sands, including Shell, Exxonmobil and the Koch industries. Their withdrawal leaves quite a few of the majors and minor players still involved.

Even the poorest countries might well be fossil dependent just for daily living.  For example, in some places, daily life is often sustained by scavenged fossil fuel, say lumps of coal that fall out from transport.

A chart from 2013 provide a picture of which countries are fossil fuel dependent for exports.

Oil, gas and coal fields have limited lifespans.  But exploration continues, and vast undiscovered field suggest that the "breaking point" for expanding fossil fuel supply is not imminent. The expiration of existing fossil fuel resources will occur (when it does) in different places at different times.

Five: Corporate dependencies:

Let no one discount the high levels of past investment in fossil fuel production, including in deep sea oil, fracking and tar sands.  These are sunk costs that will need to be recouped. Add the sunk costs of refining and transport facilities.

It is not just large corporations involved. Fracking supports small companies as well as large ones. Some First Nations and US tribes have negotiated a piece of the fossil fuel action.  They now count on it.  Individual shareholders (and their pension funds) are heavily involved.

Major oil well production is done in the Middle East, Nigeria, Venezuela, USA and Canada.  Major multinationals include: Shell, BP Exxonmobil and Chevron.  State owned companies operate in Middle East countries, China, Venezuela, Mexico, Iran and Malaysia among others.

Fracking is done in N.Dakota, Texas, New Mexico and Pennsylvania, and in Canada in northeast BC.  Argentina is also in the fracking business. There is a huge, but as yet mostly untapped potential shale deposit in China. The major players in fracking (there are lots of minor ones) include Chevron, Exxonmobil, Haliburton and ConocoPhillips, but much is leased out to subcontractors.

Deep sea oil drilling is done almost everywhere, from the South China Sea to the Arctic, to the Gulf of Mexico, to the Middle East, to the west coast of Africa.  The major oil companies, plus some of the state-owned ones are involved.

The total value invested in oil production is approx. $86 trillion.

Major gas (as opposed to oil) fields are in Iran, Qatar, Russia, Algeria, Turkestan, and the Netherlands. The US is the leader in its production, followed closely by Russia, and less closely by Iran, Canada Qatar, China, Norway and Australia.  Major gas production companies include: Gazprom, Exxon Mobil, China National Petroleum, Royal Dutch, Shell,BP, Chevron,Total, and Equinor.

We could not find the total value of gas production, but we do know that it has increased more than 2-5% in each of the last few years, despite some countries weaning themselves off coal.

The value of coal production is now a close second to oil, greater than gas.

Major coal fields are in China, USA, Australia, India, South Africa and Russia. The major coal producers are China, India, US, Australia and Russia.  Major companies involved (as well as state-owned ones) are BHP, Rio Tinto, Glencore, Anglo American and Vale (Brazil). 


Here is a map showing all fossil fuel production related hotspots in North America:


Six:  an oily way of life:

A huge proportion of most products depend on oil by-products.  We see the plastic, but do not notice most of the other oil-dependent elements of everyday living.  (needless to say, getting to the stage where these by-products can be used consumes vast quantities of fossil fuels in itself).

Petrochemicals are the “blind spots” of the global energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve. (from the IEA Report)

Start with the Internet, a current lifeline. It is a huge energy gobbler.  Although not all server farms draw on fossil fuel energy, it remains true that the technological transmission of information will require ever more energy. One of this Bulletin's sources argued: "combinations of plastics in electronic equipment are increasingly displacing paper as the medium for conveying information in a digitised world."

Think carbon fibre (now essential, for example, in manufacture including airplanes, bridges and 3D printing) asphalt, some chocolate and candy, perfume and food colouring.  Think about the soles of shoes, the walls of houses and big buildings, many fabrics used especially for less expensive clothes, cotton production, cleaning fluids, dyes, aspirin, pharmaceuticals and fertilizers, insulation, and the innards of computers for starters. 

To quote another source:  "the global petrochemical industry uses about 14% of the world's energy, and with refining, produces about 75% of the industrial emissions. It has experienced more than 15 years of strong volume growth. Value creation has also risen at a 4 %compound annual growth rate since 2005."

Direct greenhouse gas emissions from petrochemicals is likely to increase 20% by 2030 and 30% by 2050. (from the NYTimes).

Without petrochemicals, there would be no wind turbines or solar panels for renewable energy.

The major petrochemical companies are BASF (Germany) Dow (US) ExxonMobil (US) Lyondell Basell (Netherlands), INEOS (UK) Saudi Basic, (Saudi Araba) Sumitomo (Japan), Sinopec (China),  Sabic (Saudi Arabia) Formosa (Taiwa.n), Dupont (US) and Chevron (US).   

Unpacking today's petrochemical-based ways of living (not just in industrialized societies) is the dream of radical environmentalists (more power to them).  It is hardly a strong selling point for the vast majority of people.

Recycling matters, plastic bags can be banned, coal can be phased out. but even this Bulletin is dependent on the petrochemicals embodied in the technology.

The bad news first:

Alternatives to fossil fuels are not without significant costs, environmental or other. Although biomass can replace oil by-products as feedstock for petrochemicals, Biomass is hardly an environmentally sound alternative.

"...but the burning of trees to generate electricity - the latest science is showing this so-called biomass energy to be more of a problem than a solution " (Bill McKibben quoting from a WHO report)

Years have been spent documenting the hazards of nuclear energy. 

We can do something about plastic packaging and waste disposal. Diminishing the significance of petrochemicals in manufacturing is a different matter.

These days it would be great to think that the prognosis for divestment will necessarily be much greater, given Covid and the current oil slump.  Unfortunately, there is little evidence that all (state, corporations and people) will willingly and meaningfully give up their sense of entitlement in the future. Given a choice, they are unlikely to cast aside their enjoyment of resources.  It took a plague to get most people to stay home.

The good news:

Wind and solar are increasing. These technologies offer something for individuals (as well as corporations and governments) to do, for example, installing solar panels.

The changing fortunes of companies dependent on fossil fuel production (their stock prices, the price of oil) might make difference. 

A good guess is that Saudi oil can be produced at less than $30.00 a barrel, maybe much less (although the Saudi budget is based on sales at $80.00 a barrel).  Fracking production costs $30.00 to $40.00 per barrel.   Offshore drilling requires huge expenditures up front and has higher operating costs than onshore wells. Its profits are higher than from fracking. Tar sands oil is produced at a cost of about $50.00 a barrel. Transportation (pipelines, ships and barges, rail and trucks) and further processing (refining) always add to the cost of production.

Countries dependent on fossil fuels give at least lip-service to re-orienting their economies.  In some cases, they are serious.  It is reported that UK now gets more than half its energy from alternative sources, good if true. Consciousness has been raised, albeit slowly.   Covid has at least a short-term impact on how fossil fuels are viewed, maybe more.

Nothing is impossible. Simply, the task of achieving divestment is a bigger task than just getting Harvard (and others) to wake up.

As Pete Seeger once sang: even the smallest step is important, and one step often leads to another. 

A bit of background information:


Everyone knows what an oil well looks like (remember Dallas on TV or drive through Alberta).   Each well is a single bore hole. Some are 7 inches wide, others about 40 inches. Deep sea oil constitutes another form of oil drilling.

Tar sands involves open pit mining.  The "sand" from the pits is scooped up to be processed to extract the oil. Tar sands oil is used for both oil and bitumen, the latter used in road construction.

Fracking produces oil from deep (one mile, for example) deposits of shale rock.  A hole is bored from the surface, often directly below an almost-depleted oil well deposit.  Once the required depth is achieved, the boring switches to a horizontal direction where the goal now is to locate cracks in the shale.  Drilling at this deep level to open up the cracks in the shale requires serious pressure with water and hydrochloric acid.  The chemicals are sucked out. Sand is then driven down into the cracks to hold them open to facilitate the extraction of oil and gas.  Fracked oil and gas must be transported, for processing. 

Oil must be refined, partly to remove impurities but mainly to produce its commercially viable and valuable components. It is transported via pipelines, rail, ship and truck.


Most, but not all oil wells, throw up natural gas, often of sufficient quantity and/or quality to be commercially viable. Gas has fewer uses than oil.  It is mainly used for energy/heating. Gas is processed and transported through pipelines, or liquified to be transported also by rail and ship.
Even without the state ownership and subsidies being taken into account, natural gas is much cheaper to produce than oil. 


Coal comes from both open pit and bore hole mines, involving large underground "caverns" from which coal is dug out and transported to the surface.  Coal (more and less dirty) must be processed (cleaned) before it is usable. Historically coal was the cheapest fossil fuel to produce, but given the current cost of oil, it is currently much more expensive. Coal is transported by rail, ship/barge and truck.



Plainspeak.ca is a Canadian non-profit organization dedicated to facilitating informed debate. In existence for more than 20 years, Plainspeak has been supported through contract work with social justice and aboriginal groups and by the authors of this and other Muckraker Bulletins, Rick and Liora Salter.

Muckraker Bulletin is a Plainspeak publication. It is available free of charge (email: liorasalter@icloud.com).  The Bulletin has a subscription list of about 250. Please feel free to copy and/or distribute.  Plainspeak has published Muckraker Bulletin for four years. Bulletins have dealt with money laundering, cryptocurrencies, the Arctic/Antarctic, and the unknown Middle East among other topics (see Website).  

Sources include, among others: Financial Times, IEA reports, Proquest, Thoughtco, McKinsey, Petrochemical Europe, NYTimes, Science Digest, Plastics Europe, American Chemical Council, IPIECA, Frac-tracker Alliance, World Economic Forum, Climate Reality, IHS Markit, Toxic News., Bellona, Carbon Brief, The Guardian, Petrochemical Update, Chemical and Engineering News, Global Data, Oil Sands Magazine, Moon of Alabama, FX Empire, Daily FX and Energy Factbook.

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