The Saudi Arabian state-owned oil company, Saudi Aramco, will soon sell shares to the public for the first time. It sounds like a good investment, doesn’t it? I mean, when’s the last time one had the opportunity to invest in a massive oil company’s initial stock offering to the public?
It’s a sure-thing, as far as those go. Seems like a no-brainer. At least, that’s what I thought upon first glance at the headlines announcing its IPO. Then I unexpectedly received A Planet to Win: Why We Need a Green New Deal in the mail yesterday and read through it.
Less than a quarter of the way through the book, I realized that oil companies — as vehicles for capital growth — are largely moribund.
Saudi Aramco is going public just before everyone realizes its assets — oil reserves — are worthless. If they were to pump and burn those reserves, it would doom the world ecologically. Thus, Saudi Aramco’s actual value is zero — or, rather, it’s just one huge liability.
Don’t believe me? Bill McKibben did the math way back in 2012:
We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We’d have to keep 80 percent of those reserves locked away underground to avoid that fate. Before we knew those numbers, our fate had been likely. Now, barring some massive intervention, it seems certain.
Yes, this coal and gas and oil is still technically in the soil. But it’s already economically aboveground — it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide — those reserves are their primary asset, the holding that gives their companies their value. It’s why they’ve worked so hard these past years to figure out how to unlock the oil in Canada’s tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.
Investing in Saudi Aramco’s IPO is, essentially, just giving the Saudi royal family and other early stockholders a final cash infusion before it all goes belly-up. Purchasing Saudi Aramco stock won’t make you an investor, it’ll make you a willing-if-unwitting perpetrator and, ultimately, victim:
Emissions traced to 31 majority state-owned companies, including Coal India, Gazprom, Kuwait Petroleum, Pemex, Petroleos de Venezuela, National Iranian Oil Company and Saudi Aramco, were responsible for about 15 percent of the global temperature increase and approximately 7 percent of the sea level rise between 1880 and 2010.
A Planet to Win is a good, easy and quick read on a “radical” program for a Green New Deal (as opposed to the to-be-expected milquetoast alternatives offered and sure-to-be-offered by the likes of free marketers, Republicans, neoliberals and “centrist” Democrats). It isn’t an explainer or even a deep-dive into the specifics of any legislation. Instead, it covers four areas of our lives that will require tremendous change in the coming years to adapt and prevent an environmental disaster that reduces my two-year-old niece’s Earth to a few walled gardens surrounded by ashen wastelands.
Of course, since the goal of capitalism is to accumulate as much money and property as you can no matter the consequences, it’s probably too much to ask that the royal family and other oil executives save some of the money invested to pay for the environmental disaster they’ve caused.¹
¹ Instead, they’ll probably continue funding stuff like this:
Saudi promo video labels feminism, atheism, homosexuality as extremist ideas
DUBAI (Reuters) - A promotional video published by Saudi Arabia's state security agency categorizes feminism…
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