Saturday, July 30, 2011

Blacks Do Not Own Any Energy Resources or Infrastructure

And The Energy Sector Does Not Care

Blacks do not own the oil, natural gas, coal, electricity, pipelines, electricity transmission lines, refineries, tankers, oil fields, outer continental shelf drilling platforms, power plants, or oil, gas, coal mines and utility companies that distribute energy in the United States. Blacks, who make up 13% of the American population, also do not exert influence from the demand side of energy use. We do not own, distribute nor use energy to our advantage. Blacks must utilize energy policy to become owners and suppliers of energy.

One response to this dilemma is "buy stock."  Well not even the oft cited Oprah has enough money to buy enough stock to own an ExxonMobil or a BP. But what about the smaller energy companies?  Well the energy business is very capital intensive and involves significant federal government subsidies.  An 'Oprah' would have to commit all of her considerable wealth to get a foot in the door of even a small energy operation. Moreover, Blacks have been designated, and appear to be restricting themselves, to the green energy sector.  Yet the renewables sector of the energy economy (less hydro) represents less than 1% of the energy marketplace.  Some seem to want to keep Blacks in the conservation and renewables section of the energy sector.

The energy sector is not about to voluntarily incorporate Blacks into ownership positions when it comes to resources and infrastructure.  The federal government is not going to facilitate such ownership out of the goodness of its heart.  AAEA has spent decades trying to work with the energy industry in order to gain equity.  Even when the projects would have significantly helped in getting approval, prospective partners appeared to prefer to let the project fail instead of partnering to possibly give the project a prospect to be approved. And low-rating AAEA is not the answer because no Blacks own energy infrastructure and resources in the United States.

Blacks are hired as vice president for government relations, outreach or human resources in corporate energy America.  They represent much of the membership of the American Association of Blacks in Energy.  Just as the handful of Black professionals working at environmental groups are restricted to the environmental justice area within the group.  Energy corporations utilize these vice presidents to attend Black conferences, sponsor certain events and in some cases, serve as the gatekeeper to proposals for various forms of Black participation.  Energy companies enthusiastically see this as their significant contribution to 'minority outreach.' Some of these vice presidents reach out to the extent that they can, but they cannot green light an ownership stake in the company.  They can, and probably should, be reluctant to promote an proposal that could threaten their high-paying job.  Part of our frustration comes from seeing some energy corporate executives getting multimillion dollar cash and stock bonuses for running the companies into bankruptcy.

So we know the problem.  What is the solution?  One solution is the Congressional Black Caucus (CBC).  The other solution is international energy trading.  The federal government owns a great deal of land that is a storehouse of energy.  Some of this land needs to be privatized and targeted to Black ownership or control.  The CBC must insist that if energy companies want access to energy public lands, they must partner with Black-owned energy firms.  The CBC should also insist that current energy leases include Black ownership stakes.  These resources belong to the American people but Blacks have been completely excluded from participating in this area.  It takes a huge investment to develop energy reserves and the only practical way to accomplishment energy market penetration is to partner with companies that have the capital to develop the resource.

Nigeria has the best crude oil in the world.  African Americans and Nigerians should own, control and trade this precious resource.  The current corporations can still be minority partners, but ownership is its own reward.  This same ethic goes for other natural resources throughout Africa, particularly rare earth elements.  Again, the CBC is the nucleus of formulating this international trade.  Ownership stakes in international trade (owning tankers, cargo ships, ports, resources, etc) combined with ownership of infrastructure and resources in the United States will put Blacks squarely in the energy sector.  Hopefully, such equity and wealth generation can go far in reducing the staggering unemployment in the Black community. (What A Good Energy Policy Means For Blacks, AAEA)

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