Oil to Get Greener, Faster as Climate Change Policy Shifts

One of the stated goals of President Biden’s administration has been the push for more clean energy policies which are focused on reducing the effects of climate change. This can be seen in his immediate rejoining of the Paris climate agreement, along with his assignment of former Secretary of State John Kerry to the newly created position of special presidential envoy for the climate. With these new changes, the oil and gas industry has now decided to drastically ramp up its efforts to reduce its carbon footprint.

Speaking at the annual CERAWeek by IHS Markit energy conference, Dan Yergin, IHS Markit Vice Chairman, stated that the “oil and gas industry is calibrating itself to what has become the new benchmark — net zero carbon by 2050.” While Yergin noted that there are many different strategies out there for how to reach this goal, “the big cross-cutting themes that jump out this week are hydrogen, carbon capture, innovation — and the need for large companies with engineering capabilities that can operate at scale — which is where the oil and gas industry happens to be.”

Occidental Petroleum CEO Vicki Hollub also stated at the conference that her goal is to produce net-zero carbon soil. Hollub said that in 15 to 20 years, Occidental will not just be an oil company, but also a carbon management company as well, and that “the good thing is the Biden administration and President Biden understand and know how important carbon capture and sequestration to mitigate the impact of climate change.”

Oil prices took a significant hit early on during the Covid-19 pandemic, mainly due to the decrease in air and sea travel along with trade disputes among OPEC+ members. While prices have recovered since, they aren’t expected to return to pre-pandemic levels until after vaccines are made widely available, which has only further increased the emphasis on oil companies to pursue other, cleaner alternative energy sources for the future.