It’s titled “Cooperation Impossible” and states that there is not much hope for American oil producers to cooperate with OPEC efforts and reduce production.
The “Scorpions” in the title comes from a story about a frog and a scorpion with which Crooks starts the post. That story doesn’t make any sense on its own, since it starts with the idea of a frog agreeing to carry a scorpion over a river. Why should the frog do such a stupid thing?
And then, in the middle of the river, the scorpion stings the frog, sinking and killing them both in the process. Asked why, the scorpion explains “I can’t help it. It’s my character”.
In Crooks’ column, the oil companies are like the scorpion. They can’t help themselves. They know that expanding production will kill the market, and do it anyway.
Bill McKibben might agree that oil companies are dangerous, evil creatures like scorpions. But even he would have to concede that they are probably smarter.
“We can’t help ourselves” doesn’t seem to be a good rational foundation for deciding on your market strategy.
One rational reason comes next in the column. Crooks points out (correctly) that antitrust law prohibits cooperation on production levels.
That in turn means that the first policy change needed is to enact an exception from antitrust law for fossil fuel production cooperation.
Might the oil companies be persuaded to support such a move? It would mean the serious pain of higher prices for their esteemed customers, something oil companies are likely very worried about. But this sacrifice can’t be helped. In a warming world, the planet just can’t afford oil prices under $200 a barrel anymore.
And, as a bonus, they would not need to deny scientific facts anymore. It’s starting to become difficult to fool everyone all of the time.
The resulting windfall profits for the oil industry would be something that “can’t be helped”.
Cutting out the irony for a moment, yes, of course the industry would support enacting an exception from antitrust law giving them more freedom to cooperate. And potentially massive profits. And Bill McKibben and his crowd would support that move as well.
The Standard Oil case that established antitrust law in the first place was decided when there was no global warming problem and “setting limits on production” was something to be avoided. Circumstances have changed. The enormous threat of global meltdown trumps any concerns for low gasoline prices.
I may be wrong and the oil companies may be unable to start limiting their production in their own interest.
But “we can’t help ourselves, we’re scorpions” seems rather thin as a reason.