How to produce oil and gas responsibly
It might come as a surprise that two scientists with dramatically different perspectives on the oil industry –– one of us with over 30 years in the industry and the other with an academic career dedicated to addressing climate change — can agree on a policy that addresses the climate crisis. It’s even more surprising in the present moment, when energy security and environmental responsibility are often pitted against each other. But there is, we’ve discovered, a way through that can give us both.
As a recently released assessment by the United Nations’ Intergovernmental Panel on Climate Change reminds us, we must take urgent action. You might think the climate crisis would be bad news for the oil and gas industry given that most greenhouse-gas emissions –– over 80 percent in the U.S. –– come from burning fossil fuels. On the contrary, oil and gas profits have skyrocketed.
Let’s look at the two largest U.S. oil companies: ExxonMobil’s share price has more than doubled since its pandemic-era lows, and Chevron’s stock remains historically high despite recent turbulence. Both plan to continue expansion, spending tens of billions of dollars on producing more oil and gas.
Why are oil companies doing this? The answer is simple. They don’t believe society will stop burning oil and gas anytime in the near future. And many investors don’t either. They’re still buying shares in Big Oil because they’re betting that exploration and production will be profitable for years to come.
This isn’t an unreasonable assumption. Oil and gas have fueled our economy for more than a century. But we have to stop treating Earth’s atmosphere like a garbage dump. Every time we burn oil or gas to heat our homes or power our cars, we pump CO2 into the air. Since 1850, over 2 trillion tons have been emitted, heating our planet to the point of today’s climate crisis. Stated simply, the dump is full.
You, the consumer, can’t take the CO2 your car is emitting back out of the atmosphere. But luckily, we don’t have to look far for a group with the vast resources and capabilities needed to address this challenge. The same producers that are profiting from and searching for more oil and gas can and should be held accountable for the safe and permanent disposal of the CO2 generated by their activities and — crucially — the products they sell.
Government regulation is the driver that the industry needs to make this happen. Governments should require companies to meet what we call the Carbon Takeback Obligation: the requirement for producers to dispose of a progressively rising fraction of the CO2 generated by the products they sell — or else face financial penalties and, eventually, have their right to produce oil and gas taken away. The same concept, called Extended Producer Responsibility, has already been applied by governments to a number of products such as plastic bags and electronics.
Unlike a carbon tax, which simply makes polluting more expensive, a carbon takeback obligation will ensure that we limit global warming and achieve net zero emissions by 2050. And unlike a tax credit for capturing and storing carbon, a carbon takeback obligation would not take the cost of that carbon sequestration out of taxpayers’ pockets.
Technologies to capture carbon and store it deep underground already exist. More advanced technologies, like Direct Air Capture, which removes carbon from the atmosphere for storage, are under development. But additional, more economic approaches must be invented — and will be, as a takeback obligation drives companies to develop and deploy the capability to permanently store carbon at a reasonable cost.
We have given ourselves until 2050 to reach net zero. For the oil and gas industry to meet this goal, that means raising the fraction of carbon stored by 3.5 percent per year, on average, from now on –– not 100 percent overnight. In a race to achieve the safest and most cost-efficient ways to store carbon, oil and gas companies would unlock enormous innovative potential.
We don’t need to choose between meeting our energy needs and limiting global warming. By implementing a carbon takeback obligation, we can do both.
Helferty, Ph.D., led major research and engineering organizations for ExxonMobil, the largest U.S.-based oil company. He is a member of the advisory panel for Rice University’s Carbon Hub. Allen, CBE, is director of the Oxford Net Zero initiative and professor of geosystem science at the University of Oxford.