The White House is reaching out to the US oil and gas industry in the hope of blunting criticism of President Joe Biden's ambitious energy transition agenda and securing co-operation on at least some climate initiatives.
Biden's administration is keen to work with all segments of the energy industry when tackling climate change, White House national climate adviser Gina McCarthy told chief executives of large US oil and gas companies during a virtual meeting on 22 March. The meeting discussed "shared priorities around addressing the climate crisis", protecting jobs and ensuring US leadership in the clean energy revolution, the White House says. Biden's administration "is not fighting the oil and gas sector", according to McCarthy.
That the White House needs to state on record that it does not view oil and gas firms as an enemy is testament to the backlash its early actions have created from an industry that had grown accustomed to adulation from former president Donald Trump. A year ago, Trump's administration was looking at ways to pump billions of dollars into a sector confronted with collapsing demand amid the pandemic and the breakdown of the Opec+ agreement. A year later, the new administration's stance has created deep unease among many producers. "I believe that it is their goal to effectively shut down our industry," an upstream executive told a Federal Reserve Bank of Dallas survey this month.
McCarthy has pressed oil executives to share ideas for addressing the climate crisis and reducing emissions. The administration's messaging has deepened fissures within the US industry as the larger, more diversified companies and industry groups representing them have expressed readiness to meet the administration halfway on its climate goals. The American Petroleum Institute on 25 March formally endorsed a carbon price as capable of "harnessing the power of markets to drive innovation and to drive emissions ever lower" — a remarkable reversal for the leading US oil industry group, which has torpedoed past attempts at climate legislation. But smaller producers see any regulatory change as an economic hit and prefer to fight it.
The industry and its allies in Congress and state governments are already pushing back against Biden's agenda, with 14 states suing the administration to overturn a pause on new oil and gas leases on federal lands. Rescinding federal permits for TC Energy's 830,000 b/d Keystone XL pipeline project resulted in thousands of pipelayers being laid off, according to Republican critics, who contend that even more jobs are at risk. But "oil and gas jobs aren't going anywhere", the White House says, and Biden's efforts to accelerate the energy transition and decarbonise the US economy is "where the industry is largely going anyway". Biden's energy transition plans would create millions of clean energy jobs, including through the passage of infrastructure bills, it says.
One such bill — unveiled this month by the Democrats on the House of Representatives Energy and Commerce Committee — would spend tens of billions of dollars on infrastructure for electric vehicles, power grid modernisation, increasing the federal vehicle fleet powered by alternative fuels and spurring US manufacture of electric vehicle batteries. Republicans have criticised the bill for trying to "take America back to the dark ages". Oil and gas production on federal lands "will be key to ensuring the US remains a key player in the worldwide energy picture", industry group the Independent Petroleum Association of America said at a 25 March online forum held by the Interior Department before it finalises its next steps on federal oil and gas development.
By Haik Gugarats