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Saturday, April 1, 2023

Big Oil Gets Its Mojo Back

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“We saw in 2018, particularly with a lot of the climate emphasis, that people were pulling back from oil and gas,” Darren Woods, the chief executive of Exxon, said at one session. “We leaned in. We were heavily criticized for doing that at the time, but we recognized that, at some point, that supply was going to be needed.”

What’s next?

While the industry was opposed to the Inflation Reduction Act, the landmark legislation passed last year that included $370 billion in incentives for clean energy development, oil and gas executives are eager for some of those technologies, like hydrogen as fuel and carbon capture technology, to become commercially viable. That means you can expect energy companies to try to cash in on some of those incentives programs.

Carbon capture in particular, which would remove carbon dioxide from the atmosphere and lock it away in rocks, would guarantee a future for oil and gas without the worry that burning those products would continue to heat the planet.

“The issue of how we best move toward a lower-carbon energy system is one that is getting reframed,” said Mike Wirth, the Chevron chief executive, who said that a “disorderly transition” to clean energy could be dangerous.

“We have to be very careful about turning System A off prematurely and depending on a system that doesn’t yet exist and hasn’t been proven,” he said. (For the record: carbon capture itself has yet to be proven at scale.)

I also sat down with John Kerry, Biden’s special envoy for climate change. Kerry said he saw some encouraging signals from companies, including the interest in carbon capture and hydrogen, but he said the industry as a whole was not making a serious enough effort to cut emissions and move away from fossil fuel development.

“There is a need to make this transition as rapidly as we can,” Kerry said. “I think there’s a big question mark about what they’re really prepared to do.”

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