Some truly bananas footage from the U.S. Coast Guard shows dozens of oil tankers anchored off of the coast of California, from Long Beach to the San Francisco Bay, stuck without anywhere to unload.
The 27 ships are carrying enough oil to cover a fifth of the world’s consumption—at least, if consumption were at pre-coronavirus levels. Due to a global decrease in car, truck, and airplane travel under lockdowns to prevent the spread of covid-19, the price of oil has plummeted into uncharted territory. But since the oil industry just kept drilling and drilling, the world is now experiencing a massive oversupply.
It’s not like the oil industry was doing great before the covid-19 pandemic began, but this absurd footage makes it all the more clear that it’s in an unprecedented crisis. With refineries and tank farms on land rapidly filling up, oil traders are spending millions of dollars a day to charter these tanker ships. With demand so low—and no end to the current pandemic in sight—all those gallons of crude could be floating along California’s coast for quite some time.
Despite all this, oil companies are continuing to pump out even more oil, and officials are discussing ways to bail out the industry, but they’re still not taking basic steps to help vulnerable people struggling during the crisis or discussing anything to bail out the workers in the fossil fuel sector.
Major oil-producing countries did agree to reduce their production last weekend but by nowhere near as much as they’d need to to meet the rate at which demand is falling. That means traders will need even more storage space.
I’m here to offer some free advice to the industry: You wouldn’t have to find more storage space if you’d keep the damn oil in the ground. Plus, doing so is necessary to avoid climate catastrophe. Right now, the world has a historic chance to begin a just transition into a renewable energy future.