PANDEMIC CRISIS, SYSTEMIC DECLINE

The report analyzes how the COVID-19 pandemic acted as an accelerant for the decline of the oil, gas, and plastic sectors. It details the immediate impacts of the pandemic, such as the collapse of air and cruise travel and the resulting oil price war, while emphasizing that the industry was already weakened by high corporate debt, underperforming stocks, and the rise of renewable energy. The document specifically critiques industry lobbying for bailouts and regulatory exemptions, using ExxonMobil as a case study for the intersecting financial and operational risks facing the sector.

• The oil and gas sector experienced a severe financial crash at the start of 2020, with leading companies losing an average of 45% of their value between January and early April.
• The pandemic caused a massive demand shock for petroleum products due to the curtailment of commercial air travel and shelter-at-home orders, which in turn triggered an oil price war that drove prices to their lowest levels in two decades.
• The petrochemical and plastic industries are also in decline because they are deeply integrated with oil and gas; the industry is investing over $200 billion in new infrastructure despite slowing demand and increasing global legislation against single-use plastics.
• The oil and gas industry is using the COVID-19 crisis to lobby governments for bailouts, regulatory rollbacks, the suspension of environmental law enforcement, and the criminalization of environmental protests.
• Systemic weaknesses existed before the pandemic, including massive corporate debt, long-term stock market underperformance, and the decreasing economic viability of natural gas as a 'bridge fuel' due to the falling costs of renewables.
• Financial institutions are increasingly withdrawing support from the sector, with some banks restricting lending for tar sands and asset owners with over $12 trillion pledging to divest from fossil fuels.
• The US fracking sector is on the verge of collapse, with over 200 drillers going bankrupt since 2015 and an estimated $200 billion in debt coming due over the next four years.
• Low oil prices have rendered new production frontiers in Guyana, Argentina, and Mozambique economically unviable or highly risky.
• ExxonMobil serves as a case study for the industry's crisis, facing a combination of losses in its chemical segment, legal challenges in Guyana, and a decade of shareholder distributions that exceeded its free cash flow.

APA

Feit, S., & Muffett, C. (2020). PANDEMIC CRISIS, SYSTEMIC DECLINE. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2020/04/Pandemic-Crisis-Systemic-Decline-April-2020.pdf

Chicago

Feit, Steven, and Carroll Muffett. PANDEMIC CRISIS, SYSTEMIC DECLINE. Center for International Environmental Law, 2020. https://www.ciel.org/wp-content/uploads/2020/04/Pandemic-Crisis-Systemic-Decline-April-2020.pdf.

Wikipedia

{{cite report |last1=Feit |first1=Steven |last2=Muffett |first2=Carroll |title=PANDEMIC CRISIS, SYSTEMIC DECLINE |publisher=Center for International Environmental Law |date=2020 |url=https://www.ciel.org/wp-content/uploads/2020/04/Pandemic-Crisis-Systemic-Decline-April-2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{feit2020pandemic, author = {Feit, Steven and Muffett, Carroll}, title = {{PANDEMIC CRISIS, SYSTEMIC DECLINE}}, institution = {Center for International Environmental Law}, year = {2020}, url = {https://www.ciel.org/wp-content/uploads/2020/04/Pandemic-Crisis-Systemic-Decline-April-2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }