Both True — What if we’re not even on the menu?

When it comes to policy, we all buy into the adage, “If you’re not at the table, you’re on the menu.” But what’s worse than being on the menu? Not being in the restaurant at all.

That’s what’s happening with the current opposition we’re seeing to “blue hydrogen,” which should be a stark warning to game-changing industry leaders. Academics and activists are actively working to turn the public and policymakers against decarbonization strategies that are perceived as benefiting the oil and gas industry. If we want to keep policy doors open for these strategies — for decarbonizing fuels, carbon capture and sequestration, and hydrogen — we need to aggressively promote these initiatives before we may feel ready to.

We don’t want to see our industry decarbonization strategies become obsolete before we even imagine their full fruition. Below, I look at blue hydrogen as the sign you need to fast-forward promoting your decarbonization efforts.

Both of these things are true:

  • Oil and gas companies are quietly investing in research, innovation, diversification, and sustainability strategies that will make the decarbonizing energy future a reality.
  • Ensuring future opportunities for low-carbon deployment of oil and gas infrastructure requires policy decisions today that keep those doors open. And opposition could derail those decisions.

The situation

There is entrenched opposition to technology and policy options that are considered friendly to oil and gas. Recent developments within the world of blue hydrogen highlight the growing consequences of oil and gas falling behind forces of opposition.

  • Blue hydrogen is at the table! As a low-emission energy carrier that complements the repurposing of fossil infrastructure, blue hydrogen has amassed significant attention and excitement as a key innovation that will help facilitate the industry’s low-carbon evolution. Many companies are already jumping on board, trying to make the most of this promising decarbonization tool. For example, Equinor is leading a project that aims to develop the first at-scale facility for producing blue hydrogen; Shell has made major investments into the R&D of blue hydrogen; and in March, BP proposed the UK’s largest blue hydrogen project.
  • Opposition to blue hydrogen has arrived. Last month, a study on the environmental impact of blue hydrogen was published by researchers from Cornell and Stanford. The report’s key finding: Blue hydrogen emits more carbon throughout its value chain than natural gas. Notably, the report’s authors said, “There really is no role for blue hydrogen in a carbon-free future. We suggest that blue hydrogen is best viewed as a distraction, something that may delay needed action to truly decarbonize the global energy economy.” The study made a splash on several news sites, including the New York Times, S&P Global, and Politico, and was widely shared throughout the environmental community. However, the report also received fierce criticism by energy and environmental experts.
  • Activists weigh in. In August, Earthjustice, an environmental advocacy group, released a widely circulated report condemning hydrogen as a false solution to climate change. The report labeled hydrogen a misleading “marketing effort” by the oil and gas industry and criticized using fossil fuel infrastructure to harness and transport hydrogen. A senior researcher from the organization said, “Hydrogen isn’t the silver bullet it’s marketed to be. Worse, the deluge of hydrogen hype from fossil fuel companies threatens to delay the clean energy transition. …”

The lesson: As an industry, we cannot wait to announce decarbonization initiatives until they’re mature and then play PR “catch-up.” Oil and gas companies are inclined to quietly pursue decarbonization opportunities, wanting to prove their value before they make announcements or commitments. This strategy is not going to work.

Seize the day

Game-changing oil and gas companies have the opportunity to engage in policy and public opinion conversations about decarbonization options today, while doors remain open. If we remain silent until we are ready to roll out transformative technology and infrastructure, we will face cemented opposition from the public, stakeholders, and policymakers. Let’s do this:

  • Get your toolbox in order. Wherever you are in creating a strategy for decarbonization, it’s time to have a menu of decarbonization and investment priorities identified. Knowing your future tools is essential to helping you prevent barriers to your future success. To explore this work, check out the second segment of this two-part series from Adamantine’s Anne Carto: ESG Part 2: Everyone Needs a Decarbonization Strategy.
  • Get ahead of the curve. Companies work with many partners on their innovation opportunities — including research organizations, think tanks, eNGOs, universities, federal laboratories, and trade associations. Have conversations with your partners about policy options and political opposition. Part of our shared aspirations for the energy future is ensuring we keep all our options open. Together.
  • Say the quiet part out loud. Oil and gas leaders are by nature intellectually conservative. They want to do the math and ensure they can deliver before articulating any goal. Game-changing leaders today will have to override that instinct, and begin sharing their ideas, investments, and aspirations.

No one knows how the energy transition will unfold. We do know that we need to share ambitions, invest in innovation, and engage proactively with our stakeholders. Want to figure out where your company fits in? Hit reply to set up a series of strategy sessions to define your company’s risks, opportunities so you can chart your company’s course.

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