Tisha’s Insights

The Moment: Walk and Chew Gum, But Don’t Run

June 27, 2024 Tisha Schuller
Image of a brick wall filled with chewed gum stuck to it. Three ladies standing in front of the wall adding chewed gum to the wall.

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I’m writing my next book about The Moment and exploring the forces shaping it in this summer’s BothTrue editions. Few recognize The Moment for what it is: the most important opening of our lifetimes to lead into the energy future. Join me!

Whenever geopolitical pressures appear poised to slow action on climate, we start to hear a lot about the need for oil and gas to “walk and chew gum at the same time,” as Secretary of Energy Jennifer Granholm put it not too long ago.

Translation: Our companies are expected to both (1) take concrete actions to decarbonize their operations and (2) increase production, prioritize secure supply chains, adjust suppliers, and do whatever else it takes to meet national priorities. Contradictory, right? Not really. Welcome to The Moment.

Recent actions from the Biden administration highlight why the current geopolitical environment is one of the forces creating The Moment—and therefore also creating an opportunity to have more nuanced and practical conversations with our key stakeholders about the energy transition.

In recent Both Trues I’ve introduced the forces shaping The Moment; the conviction, grit, and resilience our industry needs to seize this opportunity and what happens when net-zero aspirations meet net-zero reality.

Today: geopolitics as a force. Yes, we can walk and chew gum. And our stakeholders are about to figure out that keeping us out of the conversation about the energy future will mean a far dimmer energy future. As the complexities become plain, we cannot run toward immediate decarbonization.

Both of these things are true:

  • Each individual force shaping The Moment might seem like yet another pretext for you to expert-splain the difficult tradeoffs inherent in the energy transition. (Not an awesome idea because—alone—expert-splaining simply doesn’t work.)
  • The forces combined will make these difficult tradeoffs obvious to policymakers and climate advocates—and make them look for ways to “walk and chew gum at the same time” with you if you play your cards right.

The situation

Geopolitics will drive The Moment in a number of ways. Here are some of the most salient:

  • Allies need us. The United States and Canada are the suppliers of choice whenever energy shortfalls are foreseeable. Whether the catalyst is military conflict or a natural disaster, the United States can provide energy when it’s needed to a broad swath of international allies. The most dramatic ongoing example? LNG exports to Europe after Russia’s invasion of Ukraine. Recent domestic political measures do not contradict this imperative; reassuring statements from the Biden administration indicate that the “LNG pause” will not affect allies or national security.
  • Energy security meets kitchen table. Every country is incentivized to ensure it can meet its own energy needs, address supply chain upsets, and keep costs affordable. One reason given for the LNG pause is to ensure that the United States can meet its domestic natural gas needs in the face of rising exports; however, there is little legislative heft behind this view, and recent studies show that LNG exports have little impact on domestic prices.
  • Friends trump foes. Recent opinion pieces have emphasized that the Biden administration’s recent tariffs on China would slow progress on climate action in the U.S. Although the tariffs received broad, bipartisan support, critics claim they will undermine access to goods that will accelerate decarbonization. But our examination of the selected tariffs reveals that the loudest objectors are Chinese businesses directly impacted, which use climate change objectives as a red herring. Bottom line: When it comes to national priorities and climate action, it’s complicated.
  • Demand grows in emerging economies. As billions of people around the world come closer to a middle-class lifestyle, increasing access to energy is at the core of this pursuit. A consensus is building that we should raise the threshold at which we define “energy access”—which is changing the politics about where climate action should be prioritized.

Similar to the other two forces we’ve covered, projected power demand for AI and the challenges of net-zero implementation, the geopolitics force contributes to The Moment for three reasons:

  • Geopolitics complicates the long game of climate action. When an ally is being invaded or Congress comes together in a bipartisan fashion(!) to prioritize global economic and political influence, we see how relevant and pressing geopolitics is for leaders. Climate action efforts are long-term and complex by nature. In the face of more dramatic and urgent geopolitical priorities, climate action will often take a back seat.
  • Geopolitics shatters the myth of a simple, easy energy transition. Everything about climate action is global in nature, and the force of geopolitics serves to shatter the myth of an inevitable and easy energy transition. There is nothing simple about the ways that geopolitics interfaces with climate action.
  • Geopolitics will just keep disrupting. Ever-changing circumstances ensure that geopolitics will regularly displace a domestic climate agenda. We will see this ever more often as early adopters run into trouble with redundancy and need to rely on their energy-producing allies to manage conditions caused by extreme weather, military conflict, or unusually high demand.

Seize the day

Stepping into The Moment begins now, even as we observe and understand the shaping forces. Here’s what you can be doing now to prepare your team for the opportunities ahead:

Catalogue the forces relevant to your operations. Where are the forces overlapping with your stakeholders’ interests? In what way you can begin to game-plan solutions? Create a regular, internal framework for exploring the forces and the ways your company will step in.

Seize each opportunity to engage in The Moment. For every civic, political, or business leader faced with a new challenge of climate action (tariffs on Chinese goods!), there is a Moment for you to engage differently. Will you double down on old “I told you so” arguments, or will you open up a new dialogue where you are a change agent and solutions partner?

Thank you to Rebecca Keller Friedman for her research contributing to this piece. Do you want to get ahead of the forces shaping The Moment? We can prompt a conversation with your leadership! Reach out now for a fall engagement. Was this email forwarded to you? Sign up here.

To walking purposefully—while enjoying gum!

Tisha

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Both of These Things Are True

By Tisha Schuller