The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Thursday, April 14, 2022

Strategic CSR - Fossil fuels

Announcing calls and setting targets to get rid of fossil fuels are easy; actually getting rid of them is incredibly complex and challenging, as the article in the url below reports:

"Oil and natural gas aren't needed to only generate energy. They're also critical for an array of products including face masks, diapers and vegan leather."

The article contains many examples, but here is only one – fertilizer. Making fertilizer is not possible without fossil fuels and the implications of the constraints currently being imposed on oil and gas (together with events like the war in Ukraine) ripple throughout the food supply chain:

"Consider fertilizer, which is produced using hydrogen from natural gas (the molecule CH4). Natural gas accounts for about 75% to 90% of fertilizer production costs. Russia and Belarus are large producers, and uncertainty about sanctions has reduced their exports. But skyrocketing natural-gas prices in Europe have also pushed fertilizer producers such as Norway's Yara and Hungary's Nitrogenmuvek to curtail production. Some suspended operations last fall when Russia slowed natural-gas deliveries. As a result, fertilizer prices last month hit a record. Many farmers are scaling back land in cultivation. Some say they plan to use less fertilizer, which could reduce crop yields. Others are switching from planting corn and wheat to soybeans, which require less fertilizer. The fertilizer shortage couldn't have come at a worse time. The war is disrupting grain shipments from Russia and Ukraine, which account for a quarter of global wheat exports. Wheat prices last month hit a record. While Americans will have to pay more for cereal and pasta, Africans could experience severe food shortages. At the same time, food manufacturers report that the cost of plastics for containers and packaging is soaring. Plastics are made from oil and natural gas, which are in short supply globally."

In short, while the article is not exactly sympathetic to the cause, it is making the extremely valid point that we are in no way prepared to phase out fossil fuels from our economy. The problem, of course, is that we needed to have phased them out many years ago:

"The inconvenient truth for progressives is that petrochemicals are ubiquitous and indispensable. … As much as progressives loathe fossil fuels, they can't live without them. Drive an electric car or ride a bike? Streets are paved with asphalt, which is made from petroleum bitumen. The cost of asphalt, by the way, is also soaring in tandem with oil prices."

Take care
David

David Chandler
© Sage Publications, 2020

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You'll Miss Fossil Fuels When They're Gone
By Allysia Finley
April 5, 2022
The Wall Street Journal
Late Edition – Final
A15