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New York’s fight against the oil giants is political posturing at its worst

11 January 2018

12:41 PM

11 January 2018

12:41 PM

Was there ever a more pathetic piece of political posturing than the attempt by New York mayor Bill de Blasio to sue five oil companies, including BP and Shell, for the cost of building £14.8bn ($20bn) worth of sea defences to protect vulnerable parts of the city? To add to his virtue-signalling, de Blasio has also announced that the city’s pension funds will seek to divest from the shares of oil companies.

One should never under-estimate the ability of the courts, whether in the US or elsewhere, to come up with perverse judgements but it ought to be pretty improbable that New York could win the case. While there is scientific evidence to link an element of sea level rise to higher global temperatures and in turn to carbon emissions, New York needs better sea defences global warming or not. It is built in a very vulnerable, low-lying location in a channel where southerly winds tend to be funnelled. New York City’s own report on sea level rise admits that it is down to a ‘complex suite of factors’, saying:

“Local sea levels are affected by ocean currents, gravitational forces, prevailing winds, and rise and fall of the land mass. Within the coastal regions of New York State, the land mass is slowly sinking, with the exception of the Hudson estuary north of Kingston. This movement is a result of geological forces and impacts of human activity and development.”

I suspect the oil companies’ defence teams might just be quoting that in court. Given that it admits sea level rise in New York is partly down to development, are the city’s authorities going to sue themselves, on the grounds that they sanctioned the development?

There is widespread agreement that reliance on fossil fuels must be cut, possibly their use eventually eliminated for good. But in the meantime no-one can deny that the global economy runs on oil and gas. Moreover, the gas industry in particular is part of the short-term solution to cutting carbon emissions – gas-fired power stations could very quickly replace coal-fired ones, cutting carbon emissions by half in the process. That we still have coal-powered stations is down to the climate change lobby pressing too quickly for entirely renewable solutions – for which the technology is not yet ready. We simply don’t have the storage capacity to deal with intermittent forms of generation on a large scale.

What does de Blasio want? For the oil industry to go away, tomorrow? He wouldn’t like the result if it did. If I were an oil company executive I know what I would be thinking of doing in response to de Blasio’s legal case: cut off the oil and gas supply to New York for a day and see how the city copes without no heating, lighting or transport other than that which can be provided by solar panels, wind and nuclear. Not very well, I suspect.

And no, before the backlash arrives, I am not a stooge of the oil industry, or receive any payment from it. I have a balanced portfolio of investments which includes shares of renewable energy companies as well as oil companies, and according to an analysis of my portfolio I am under-invested in the latter relative to the market as a whole.

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