The Natural Gas and Oil Climate Opportunity

Mark Green
Posted December 5, 2018

The recent National Climate Assessment – projecting significant impacts to the country and the economy in the absence of more measures to address climate change – has garnered a good deal of attention, as well it should. The report raises a number of important questions for the national climate conversation, leading to a consensus path forward for the United States.

While we don’t know all the ways our country may address climate in the years ahead, we must define meaningful progress as taking action and producing results – both of which our industry has been doing and will continue to do. (More below.)

Climate progress must be based on a credible foundation – one that is achievable, scalable to a country the size of the United States and one that doesn’t wreck the economy, trading one set of problems for others that could deprive millions of Americans the chance to be secure and prosper.

This foundation rejects the notion advocated by some that the U.S. should simply end its use of natural gas and oil, the country’s leading energy sources today and projected to be the leading sources for decades to come. It is a faulty course that’s neither realistic nor beneficial to Americans, given the role natural gas and oil play in making their lives better. Just a few examples:

• Reliable and affordable power generation, product manufacturing, the Internet and more
• Modern pharmaceuticals and 21st-century health care
• Clean water
• Better air

An “off oil” approach would be harmful across our society – robbing Americans of millions of jobs, disposable income, affordable energy and products they use every day, from smartphones to clothing to transportation fuels. (BTW, gasoline that costs less than $2 a gallon can be found in about 20 states.) Taking this path could reverse important gains made for Americans’ prosperity and freedom, brought to them by domestic natural gas and oil abundance.

The U.S. energy revolution has made and is making the United States richer, stronger and more self-sufficient. As an energy superpower the U.S. has the ability to help allies around the globe while deterring potential adversaries. Read Walter Russell Mead’s recent piece in the Wall Street Journal, describing how energy from U.S. shale has reshaped the world’s balance of power:

Ever since the shale boom began, diplomats and politicians have underestimated its importance. The U.S. has regained the position it lost in 1973 as the world’s largest oil producer, which it will likely hold through at least the 2040s. The consequences for energy markets and world politics will be far-reaching.

Contrary to the false narrative that increased energy production, economic growth and climate progress can’t coexist, the natural gas and oil industry has accelerated the first two while facilitating the third, advancing climate goals.

Consider: The U.S. is the world’s leading producer and refiner of natural gas and oil and has been for a number of years. Domestic crude oil production in October reached 11.2 million barrels per day (b/d), a record for October and the third consecutive month over 11 million b/d.

And, at the same time, emissions have declined to the benefit of our air and climate:

• Greenhouse gas emissions are down 2.7 percent since 2016, according to EPA. Methane emissions from natural gas systems are down 16 percent since 1990, a period when natural gas output increased more than 50 percent.
• U.S. carbon dioxide emissions have reached 25-year lows, according to the U.S. Energy Information Administration – even as the rest of the world’s CO2 emissions have increased 50 percent since 1990.
• Releases of carbon dioxide, methane and nitrous oxides from fossil fuel extractions on federal lands declined from 2005 to 2014, according to a new U.S. Geological Survey report.
• One more report, the Second State of the Carbon Cycle report, also shows falling North American CO2 emissions over the past decade – down 1 percent, compared to a 3.8 percent increase globally.

All of these are actual emissions reductions and the kind of real climate progress attendees at the COP24 conference should be focused on; if other nations followed the United States’ lead, the world could be making significant headway on climate.

In the U.S. this progress has been achieved without undercutting the economy and weakening U.S. energy security. Quite the opposite: Our nation is more secure, with a growing economy and a brighter, cleaner future largely because of increased use of clean natural gas, cleaner transportation fuel technologies and industry advances in capturing emissions from its operations, encouraged by industry-led initiatives such as The Environmental Partnership. There’s climate talk and then there’s climate action that’s producing results. Kyle Isakower, API vice president for regulatory and economic policy, in a syndicated op-ed:

The U.S. leads the world in reducing greenhouse gas emissions. Carbon dioxide emissions in the United States have plunged to their lowest level in a generation, while CO2 emissions around the globe have risen 50 percent since 1990. As the American Enterprise Institute reported, 2017 marked the ninth time this century we're reduced emissions more than any other nation. How did we do it? Increased use of natural gas in power generation is the single biggest factor.

As the national climate discussion continues, Americans must not lose sight of the opportunities – based on U.S. natural gas and oil abundance – to leverage technology and innovation to keep reducing emissions while continuing society’s modern standard of living. ExxonMobil Chairman and CEO Darren Woods at the 2017 IHS CERAWeek conference:

“We understand the risk to climate associated with fossil fuels. What we think is we have the opportunity to contribute and help mitigate that risk through technology. There are roles for renewables, roles for solar and wind, but there’s also opportunities for technology breakthroughs to address the longer-term challenges associated with climate change risk. And that’s where we’re focused.”

The U.S. natural gas and oil industry is cognizant of its unique opportunity – and responsibility – to develop energy solutions for today and tomorrow that make the world better – for Americans to live healthier, freer lives while also addressing climate issues. Woods:

“All of us share the same aspirations, to live in a world that is clean and safe and prosperous. A place where our children can grow up looking forward to healthy and happy lives with higher standards of living. Affordable energy plays an important role in achieving this. I believe the assumption that affordable energy and a cleaner environment are a zero-sum game is mistaken. It underestimates the power of technology. The zero-sum view is a static one, and the world of energy is anything but static. All things being equal, this view is understandable. But technology changes the equation. It makes a dream – growing the economy while reducing emissions – a reality.”