Lobbying hard
A century ago, the strong Internal Combustion Engine or ICE lobby decimated the Electric Vehicle (EV) manufacturers club successfully. This time around, the die has already been cast. The EV is winning, hands down. Elon Musk of Tesla single-handedly proved that EV is economically viable by selling millions of EV cars in markets where it matters the most: the United States, Europe, the United Kingdom, and above all, China.
The massive ICE lobby, whose members are global auto giants, conceded defeat by gradually committing themselves to include EV as part of their product portfolio and promising to weed out their carbon-emitting ICE over the next decade to support the global climate change challenge.
The death of ICE will impact the oil and gas giants internationally, who again have sunken shiploads of money in exploration, refining, and distribution of the non-renewable fossil fuel, the basic ingredient to energize ICE vehicles, courtesy of the climate change challenge yet again. Added to this is the stakeholder activism forcing polluters to change tack to embrace renewable energy business: wind, solar, hydro, etc. Even stock markets across the globe have cottoned onto the EV bandwagon, much to the consternation of the ICE team.
Undoubtedly, all these changes are happening not voluntarily but under tremendous pressure. The losers, finding the noose tightening, have not admitted defeat fully. If possible, they would like to delay the death of polluting businesses, viz., oil and gas.
New battle lines are drawn in the United States wherein the American President Joe Biden is deploying extra pressure to achieve his climate change goals. His decision to nominate Sarah Bloom Raskin as vice-chairman of the Federal Reserve responsible for supervising lending operations has unnerved the oil and gas lobby. She has been a known anti-oil and gas advocate for a long. When her appointment is confirmed, she is most likely to shut the fund flow tap anything to do with the oil and gas vertical.
Therefore, alarm bells began to bugle loud and clear. Stop Sarah Bloom Raskin any way which way from entering the Fed is the new orchestrated chorus.
Tim Stewart, the President of the US Oil and Gas Association, and Kathleen Sgamma of Western Energy Alliance took to the Wall Street Journal, arguing that in the current scenario where the inflation in the US is reaching new highs (7% for the first time after several decades), Sarah would “drive capital away from oil and natural gas firms.” They argue that the Fed is expected to be non-political and good monetary policy requires the Fed leaders to set partisanship and personal preferences aside.”
These duos do not leave out some cogent and logical arguments too. “There is no renewable energy that could feasibly replace oil and natural gas, which produce 70% of the nation’s energy, so punishing investment in them would only raise only the already inflated American cost of living.” According to them, the US oil and gas segment contributes 8% of US GDP and employs 10 million Americans, mostly blue-collar.
They go for the jugular when they declare Sarah has been nominated to be a vice chairman at the Fed, “not the head of an environmental, social and governance fund.” Notwithstanding that Americans pay 40% more for fuel today over the past, the reality that energy pricing’s impact on inflation is undeniable is not cutting much ice with lawmakers.
Will, the US Senate pay heed to Stewart-Sgamma’s plea and deny Raskin confirmation is a moot question. On the surface of it, such an outcome is unlikely. But the imminent defeat of their lobbying effort has not deterred the vested interest.
