It’s been maddening to watch the unfolding drama around rising gasoline prices in the United States. The conversation has been completely untethered from the reality of the need for oil supply and relevant infrastructure; instead, it settles for blaming petroleum companies for price-fixing. As a result, many observers are simultaneously arguing that we (1) eliminate fossil fuels and their infrastructure ASAP, (2) increase oil imports, and (3) blame companies for supply-and-demand price fluctuations. Wow.
What’s a game-changing leader to do? Transcend the bitter, superficial conversation — and seize the opportunity for robust engagement.
Both of these things are true:
- The public conversation about oil and gas supplies often focuses on the immediate elimination of all fossil fuels and their infrastructure.
- Public outcry about the increasing price of gasoline has policymakers scurrying to increase oil imports to the U.S.
It’s tempting to approach this moment as many industry supporters did in the Texas freeze: doubling down on unproductive partisan gamesmanship around energy. I have often argued in Both True that there will not be a political reckoning to restore the public’s interest and faith in the important role of oil and gas. Indeed, the current federal investigations into price fixing — while entirely unfounded and absurdly unfair — prove that when supply shortfalls result in increasing prices, key stakeholders seek to blame the industry. So, if we choose to “explain” the realities and complexities of the energy system to an often-hostile public, we’ll waste the opportunity created by this moment.
Instead, the current dichotomy sets up two spectacular opportunities for conversation with policymakers, pundits, and stakeholders about the energy transition. But these opportunities only exist if (1) we embrace the need for urgent climate action, and (2) we seize the opportunity to lead into the energy transition. Only then we can consider how rising gas prices threaten the current climate-hawk playbook:
- Affordable energy trumps climate action. Consumers will always seek abundant, affordable energy when faced with a long, unclear path to addressing climate. Pundits and policymakers who place these ideas in opposition to one another face certain doom in inspiring urgent climate action that will undoubtedly increase energy prices.
- A pragmatic transition does not seek to eliminate fossils today. By acknowledging the importance of current and future energy affordability, even the most aggressive climate hawks must assess the need to provide an abundant energy supply. This undermines the “stop everything” playbook reaping havoc on energy infrastructure projects across North America.
Nothing is more inefficient — both for energy provision and emissions reduction — than meeting fuel shortages through emergency action. But inefficient happens when oil gets transported from unfriendly countries unconcerned with climate across oceans. When oil gets transported by rail instead of pipeline across continents. And when fuel oil gets trucked across states to homes because natural gas pipelines do not exist.
The antidote to this outdated climate playbook? A proactive, accelerated, pragmatic energy transition plan that accepts certain realities. This approach is only possible when incumbent energy companies — that’s you! the game-changing leader — engage proactively and positively in the opening created by the inevitable ongoing conversations about energy prices.
A new climate playbook will include three elements:
- First, a planned transition that acknowledges both the need for urgent climate action and the decades-long need for oil and gas.
- Second, a pivot to dual-purpose energy infrastructure that will both meet growing energy needs today and serve a repurposed role in a future, decarbonized energy economy. This pivot includes decarbonization tools you know well: oil and gas wells repurposed as carbon storage wells; natural gas pipelines to hydrogen carriers; refiners creating future carbon-neutral fuel.
- Third, climate leadership from today’s oil and gas leaders that embraces your dual roles of meeting current energy demand while repurposing your operations and facilities to a decarbonizing energy future.
Rising gasoline prices offer us the opportunity to lead conversations around a new climate playbook, one that acknowledges energy demand and infrastructure needs. This vision also challenges us to embrace urgent action and a new future role.
Seize the day
A new conversation about the energy transition only happens when we start it. So let’s:
- Start the conversation. The burden is on oil and gas leaders to show up with a new leadership vantage point in conversations about energy infrastructure and the future.
- Leave defensiveness in the past. The current blame game about gas price fixing is wildly unfair. Defensiveness never won any arguments — leave it in your rusty, retired toolbox.
- Acknowledge the urgent need for action. Stakeholders are understandably skeptical about oil and gas’s sincerity in leading into the energy transition. Sharing the public’s aspiration for urgent action is a critical initial step.
- Innovate dual-purpose operational and infrastructure future. The burden is on us to prove that we are going to put our 150 years of entrepreneurial spirit to work on building the decarbonizing energy future while meeting the operational imperatives of today. Get your innovation team on the job.
Not many incumbent oil and gas companies will be ready to jump into this new climate conversation. Our team at Adamantine can guide your board and executives through the analysis required to understand how to future-proof for this new day. Hit reply and let me know how we can help you.