Cooperation is key to climate solutions
For decades, the energy industry has been seen as the villain in the world’s battle against climate change. Today’s reality, however, is different. The energy industry is ahead of Washington, D.C., in recognizing the truth of climate change and the need for a lower-carbon energy system.
Last week, Houston hosted CERAWeek, one of the world’s largest energy conferences. The conference had the strongest focus on climate I have seen in my 12 years of attendance. The energy industry has good reason to be concerned. In the absence of federal climate policy, public concern about the climate is growing. A July 2018 survey by ABC News, Stanford University and Resources for the Future showed that 61 percent of Americans say the federal government should be doing “a great deal” or “a lot” about climate change, and 62 percent oppose President Trump’s decision to leave the Paris Climate Accord. Nonetheless, senior government officials at the conference, such as Energy Secretary Rick Perry, generally ignored climate or were antagonistic toward the issue.
The energy industry often takes the blame for the climate problem, but its innovative culture is well positioned to develop and advance technologies to address the challenge. Oil and gas companies can apply their core competencies to lowcarbon technologies. Expertise in the subsurface is directly applicable to carbon capture and sequestration technology, where carbon emissions generated by fossil fuel use are permanently stored underground.
Understanding how to operate in offshore environments translates readily to offshore wind. Refineries and petrochemical plants use temperature, pressure and catalysts to create useful products. Research to make these processes less energy-intense, thus reducing carbon emissions, could be applied to other industrial processes as well. The industry’s expertise in infrastructure could be called upon to build a distribution system for hydrogen.
Even innovations designed to improve oil and gas recovery have a place in our low-carbon future. Production from oil reservoirs declines at an average rate of five percent per year. Even the lowest forecasts of global oil demand do not envision demand declining that quickly. Thus, the world will still need to invest in oil and gas production for many years to make up for declining production. Innovative technologies that improve recovery from existing fields and reduce the energy-intensity of production can lower the environmental impact of the oil and gas that we still need — a clear win for the environment.
The energy industry also has the capital and reach to provide low-carbon solutions at the necessary scale — a significant business opportunity for the industry. According to the International Energy Agency, global energy investments in 2017 totaled $1.8 trillion. More of these investments need to be directed toward low-carbon energy, but the industry’s ability to invest in profitable low-carbon technologies is clear.
The industry is laying the groundwork, but federal policy is still needed to achieve a transition to lower-carbon energy. Policies such as a meaningful carbon price create a robust investment environment for low-carbon energy. The federal government also has an important role in supporting early-stage research into new technologies. But the Trump administration is still denying the science of climate change. At the same time, some states and cities under Democratic control are suing the oil and gas industry for its past contributions to greenhouse gas emissions.
Instead of ignoring the climate challenge or vilifying the energy industry, cooperation between government and industry is a better path to achieve progress toward a lower-carbon future. The energy industry recognizes that it must achieve reductions in carbon emissions, and I believe its strong innovative culture will continue in that direction. Washington needs to join the industry in laying the groundwork for climate progress.