This Monday, two days before Earth Day’s 50th anniversary, oil futures went negative for the first time in history. Buyers were so eager to offload oil commitments that they were willing to give their crude away at cost.
“At cost” is at the price of production. Oil has a positive price of production. Selling it at a negative price is thus to be giving is away at less than cost.
Any further economic analysis from people this stupid is going to be pretty useless, isn’t it?
This pressure is in no small part due to its unsustainable investments: rough calculations suggest that Harvard may have lost $700m through its fossil fuel holdings alone. This is merely a symptom of broader institutional ties, including a trustee who also serves as Exxon’s top lawyer.
For years, economists have warned of how the carbon bubble’s rupture might take much of the economy along with it. What we’re seeing now is a preview of what that will look like. Broad societal entanglements with the fossil fuel industry make crashes like this all the more dangerous, and if even the richest and most powerful institutions are paying the price, imagine what the consequences are for those without a multibillion-dollar endowment to fall back on.
They don’t disappoint either, do they?
The capitalists have lost, sure they have, as asset prices fall. And consumers are making out like bandits as the consumption of energy becomes ever cheaper. The consequences for non-asset owners therefore being positive.
Ilana Cohen, Connor Chung and Joseph Winters are organizers with Fossil Fuel Divest Harvard
And there we were thinking that Harvard is where the bright kids go.