Preparing for siege

Triumphant in minor victory after negotiations in Paris, US President Barack Obama will spend his last year in office demonstrating how his approach to climate mitigation differs from most others. The oil and gas industry should prepare for siege.

Obama and other national leaders attended the 21st Conference of the Parties (COP21) determined to forge an agreement and sure to hail as transcendentally important anything signed by a majority of participants. That's largely what happened. While affirmation by 195 countries of the need to act on climate change certainly demonstrates diplomatic accomplishment, the agreement itself represents slight progress from its predecessors. Little of importance is obligatory-not the $100 billion/year demanded by developing countries from their industrialized counterparts, not the hope to balance human greenhouse-gas (GHG) emissions with natural uptakes during 2050-2100, and not the ambition to lower emissions enough to hold growth in global average temperature from preindustrial levels to "well below" 2° C.

High-mindedness

The Paris agreement is another exercise in international high-mindedness destined to influence temperature little if at all. It's important mainly because failure to produce an agreement-any agreement-would have derailed climate politics, in which much money and many careers have been invested. It culminates years of well-organized, well-funded activism, much of which is propelled by socialist agendas and financial attachment to renewable energy. And to most of the world's people, it addresses a concern far less important than terrorism or economic welfare.

COP21 gave full voice to groups hostile to oil and gas. Limiting temperature rise to 2° C., activists claimed, would require leaving at least 80% of oil and gas reserves in the ground. To keep temperatures lower, energy consumers would have to quit using fossil energy altogether.

Not all countries let anxiety about the climate become thoroughgoing hostility to fossil energy. Neither China nor India is abandoning hydrocarbons, of course. And before COP21 began, the UK announced plans to end coal-fired power generation but to emphasize the production and use of natural gas instead. The country also ended costly subsidies for wind energy, having done so earlier for solar. Alberta, too, promised a measured approach. A new, left-leaning government there moved away from coal in power generation but did not satisfy the activist dream of limiting production from the province's prolific oil sands. Instead, it set emission targets for oil sands work that allow production to keep growing and encouraged gas use in power generation.

The Obama administration has broader goals. While coal was its first target for energy-mix atrophy, oil and natural gas won't be spared. Rejection of the Keystone XL border crossing aligned Obama firmly with the pressure groups committed not only to lowering consumption of fossil energy but also to thwarting development of hydrocarbon resources. Activist obstructionism now targets pipelines essential to development of gas in prolific Appalachian basin shales, and the administration resists legislation to streamline project approvals. The US Environmental Protection Agency further shows gas will receive no mercy-despite the fuel's contribution to recent declines in US emissions of CO2-with its proposal to regulate methane emissions from oil and gas facilities.

Until at least January 2016, COP21 will haunt every energy decision by the Executive Branch. Oil and gas lease sales will be delayed or canceled. Projects accommodating oil and gas development will be studied forever. Regulation of GHG emissions by refineries, for which air-pollution standards already are tightening, probably will be proposed.

Challenging motives

On every question, the oil and gas industry will have to fight on multiple levels. It must address specific issues, such as costs and benefits, of course. But it also must challenge motives of the extremists now writing talking points for Obama and his regulators. Those motives were on full display at COP21. They're uncompromisingly hostile to all fossil energy. And they issue from state-centered, anticapitalist advocacy Americans should find alarming.

The oil and gas industry must not hesitate to say so.