Oil industry expresses concern, not alarm

26 October, 2020 12:00 AM printer

HOUSTON: Joe Biden’s promise that he would “transition” the country away from oil and natural gas might hurt him politically in Texas and Pennsylvania, but it did not come as a surprise to many in the energy industry.

Oil and gas executives have been keenly aware that the world is starting to move from fossil fuels toward renewable energy, although they strongly argue that their industry will continue to provide cheap and plentiful energy for decades to come. And several of them said Friday that while they did not like Mr Biden’s comments, they were not alarmed by them either, report agencies.

What ultimately matters to the industry is not whether there would be an energy transition, but how rapid it would be and whether the companies would be allowed to exploit oil and gas reserves by offsetting their environmental impact by capturing and storing greenhouse gas emissions.

Large European oil companies are embracing the change that Mr Biden called for as concerns over climate change grow and investors begin to shun fossil-fuel businesses. For example, BP has announced that over the next decade it will shrink its oil and gas production by 40 per cent and increase investments of renewables tenfold, to US$5 billion a year.

But the US oil industry, which has donated much more to President Donald Trump’s campaign than to Mr Biden’s, has been more reluctant to change its business models.

Executives note that natural gas is rapidly replacing coal, the dirtiest fossil fuel. Gas also complements renewables by providing power when the sun does not shine and the wind is still. Some energy executives have even endorsed levying a tax on the emissions that are causing climate change, arguing that it would create incentives for carbon capture and storage, which would reduce emissions.

“There needs to be a large workhorse, and ultimately that is what we are,” said George Stark, director of external affairs for Cabot Oil and Gas, which has extensive natural gas operations in Pennsylvania. “We complement wind and solar. You need something that can run on an ongoing basis.”

Mr Stark, like others in the industry, said he found Mr Biden’s comments concerning, but stopped short of criticising the former vice-president harshly. “The opportunity will be there for a greener dialogue that has to take place regarding this whole notion of a transition,” he said.

In Thursday’s debate, Mr Biden said he would seek to replace fossil fuels with renewables “over time”, noting that the oil industry “pollutes significantly”. But he had previously said he was against ending hydraulic fracturing of shale fields, a common practice in Pennsylvania, Texas and Ohio. And some oil and gas executives said they liked parts of an energy plan that Mr Biden put out this summer.

After the debate, Mr Biden sought to clarify his remarks by saying fossil fuels would not be eliminated until 2050.


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