Note: The article below focuses on Vermont and the economic impact of cheap oil on pipelines being planned in that state. But, there is a much larger story about how the extreme energy extraction industry is built on cheap money from the Fed that led to high risk loans that are now becoming junk loans. The finance industry is heavily into extreme extraction like fracking and tar sands. Last week, Jamie Dimon the CEO of JPMorgan was calling individual members of Congress to make sure that tax payer dollars would protect their derivatives gambling. Perhaps he spent so much time on getting tax payer insurance because he sees what is coming as well: the whole financial system is threatened by cheap oil and high risk investments in fracking and tar sands. We re-published an article on our economic site, It’s Our Economy, that goes into the risk to the world economy in detail. It is pretty hair raising and worth the read. Here’s one key point:
As in 2008, companies started to decommission drilling rigs once again. The shale industry may have written off $35 billion in the last 10 to 15 years – but right now bond holders are staring down almost $12 billion of losses in the last few weeks.
The crash may already be beginning. JPMorgan, a massive holder of derivatives, may have gotten tax payer insurance just in the nick of time.
Climate Justice Advocates Respond to Second Cost Increase, Vermont Gas Request for Delay
Vermont Gas Systems announced today a second cost increase for Phase 1 of the Fracked Gas Pipeline and requested a hold on the permitting process for Phase 2, affirming pipeline opponents claims that the pipeline is too costly for Vermonters.
“Since the first cost increase in July, we’ve known that costs would continue to rise, at the expense of Vermonters who are struggling every winter to pay their heating bills,” said Will Bennington, a volunteer with Rising Tide Vermont. “Once again, Vermont Gas has shown that their word can’t be trusted.”
Groups and individuals from across the state have been working for two years to stop the project, which represents the biggest fossil fuel infrastructure project in Vermont in over 50 years.
Rising Tide Vermont, along with other groups, has appealed to the Public Service Board, taken action at construction sites, and staged a massive sit-in at the Governor’s office to convince state regulators to deny permits for all phases of the project, which they say will lock Vermonters into decades more of dependence on dirty fossil fuels.
“This news from Vermont Gas shows that the growing movement against new fossil fuel infrastructure is effective, and that we have what it takes to win, representing enormous benefits to the climate, to Vermonters and to the people in Alberta whose water is contaminated by fracking.”
Opponents of the project are also concerned about the vulnerability of rate-payers, who face higher rates due to increased project costs, and who will bear the pain of sky-rocketing increases in gas prices in the future. A coalition of landowners, rate-payers and climate justice advocates delivered a petition signed by over 500 rate-payers to the Public Service Board in July, calling on them to re-open the Phase 1 CPG in light of the first round of cost increases for the project.
“We expect to hear shortly that Vermont Gas is pulling the plug on the entire project. It is clear as day that costs will continue to rise and that this project offers no benefit to Vermonters,” Bennington added. “It is time for Vermont Gas, the Public Service Board and Governor Shumlin to cut their losses and put an end to this fossil fuel folly.”