Oil’s climate agenda

March 25, 2019
What’s the best way to respond to climate change? Watch oil and gas companies.

What’s the best way to respond to climate change? Watch oil and gas companies.

This suggestion contradicts received wisdom of the day, according to which fossil-energy companies deny the need for climate precaution or lie about it to protect their profits. And activists naturally scoff at any intimation that oil-industry efforts to mitigate climate change merit emulation.

Yet received wisdom, contorted by political advocacy and the frenetic churn of social media, gets more things wrong than right. And climate activists discredit themselves by demanding too much, too soon and becoming hysterical when they don’t get it. Some of them now say doom lurks a mere dozen years away.

Meanwhile, oil and gas companies are responding to climate change—really responding to climate change as opposed to nagging everyone else about it.

What companies do

A recent Oil & Gas Journal article by Editor-News Mikaila Adams described actions oil companies are taking in anticipation of a gradually decarbonizing energy market (OGJ, Feb. 25, 2019, p. 18). Approaches and ardor vary company to company, of course. Across the industry, though, the effort is as real as climate change.

Many companies have corporate targets for reducing emissions of greenhouse gases. Some of them make progress toward those targets a performance metric for executive pay. They pursue the goals largely by improving energy-use efficiency, such as by increasing the use of cogeneration of electricity and steam in the processing of hydrocarbons. They’re also trying to cut gas flaring, venting, and leaks, even as their production of oil and gas increases. Many such efforts improve financial performance by cutting costs and waste. Earlier, without the priority boost now accorded projects that mitigate climate change, the initiatives might have been overlooked or unfunded as immaterial to company business.

Oil and gas companies also address climate change with effort promising little or no quick payoff. Some are exploring carbon capture and storage—especially where captured carbon dioxide can be used for enhanced oil recovery. A few such projects have reached commercial scale.

Another research target is biofuels. Oil and gas companies are developing or improving technologies for ethanol from sugar, cellulosic ethanol, biologically derived gasoline additives and diesel, fuels from algae, and diesel from nonplant wastes. Some of them also are investing in solar and wind energy. In the latter category, expertise in offshore operations proves especially helpful.

Mitigation of climate change, of course, still claims a small share of total investment by the oil and gas industry, the core functions of which remain the production, processing, and transportation of fluid hydrocarbons. To the climate lobby, for which those activities are anathema, investment targeting reduction in GHG emissions will not be politically satisfactory until it totally displaces capital flowing to core ventures. Because the world will need oil and gas for many more years, though, the climate lobby’s standard is fanciful. In fact, it’s self-defeating.

A false issue promoted by some opponents of fossil energy is the supposed hypocrisy of oil and gas companies that work to lower GHG emissions of GHGs and invest in nonfossil energy yet oppose demands for the rapid decarbonization of energy. The charge is self-illuminating. It betrays the either-or exclusionism typical of the activist agenda and central to its futility.

What’s possible

The world needs reduction of GHG emissions AND oil AND natural gas AND whatever other low-emission energy forms prove economic. With their narrow and unyielding declarations about energy and environmental needs, climate activists demand the impossible.

By addressing GHG emissions where and how they can, oil and gas companies—like companies with similar programs in other industries—record measurable and affordable progress. The progress won’t satisfy the most zealous advocates of climate-change response. But it’s progress in the realm of what’s possible, as determined by physics, economics, and politics. The beginning of real wisdom in the mitigation of climate change is that what’s possible is all that’s possible. Activist hysteria notwithstanding, that should be enough.