Now is the time for the United States to develop a coherent policy framework to address climate change and transition to a mix of clean-energy sources.
It is also time for the oil and gas industry to step up and be part of the solution.
More than 60 years ago, the phrase “peak oil” entered the American lexicon. It is a theory that suggests the world’s crude oil production will reach a peak—similar to a tipping point—where a maximum amount of oil has been reached and oil production will begin to decline.
In other words, it would be a sign that we’re halfway through using all the available oil stored in the earth.
Over the years, scientists have made many predictions as to when peak oil would occur, but with continued advancement in oil extraction technology, none of the predictions have come to fruition. The theory has been more or less debunked, but the fact still remains that crude oil is a nonrenewable resource and at some point the supply will dwindle.
Oil extraction, production and refinement is big business across the U.S. and accounts for close to 10 million jobs, or 5.6 percent of the nation’s labor force. In 2019, approximately 100 million barrels per day (mb/d) were extracted worldwide. The U.S. stands as the top oil-producing country in the world, averaging more than 19 mb/d accounting for 19 percent of the world’s production.
It is understandable that legacy oil companies are happy with how things are right now. If the fear of running out of oil has been unable to drive an internal shift toward renewables, it is unclear if environmental concerns will.
While alternatives to crude oil in some parts of the energy section have begun to take shape, derivatives such as gasoline and jet fuel do not yet have clear and readily available clean-energy counterparts.
As the cost of establishing sources of renewable energy continues to decline, it is time to take a long, hard look at moving towards wind, solar and geothermal technologies.
During the four years of the Trump administration, discussions to that end were virtually nonexistent. As President Joe Biden and his administration take control of the White House, there is signaling that Americans will tackle climate change head on.
We call on the oil and gas industry to work with the Biden team and to leverage its resources and its workforce to move toward the development of renewable energy.
While it is usually difficult for large companies to pivot, they have had decades to consider alternatives. And if they are unable or unwilling to do so, they will find themselves edged out of the energy economy by more nimble startups that have an eye on the future.