The Stark Truth About the Green Revolution

There's only one practical path forward

Recently, I shared the disappointment I felt with (some) big oil companies, specifically between their professed commitment to transitioning towards renewables, and the paths they were actually choosing. I recounted my recent experience moderating a panel at the MIT Energy Conference, discussing the pressure oil companies were getting from the public and their shareholders on ESG, and how they were responding. At that panel, Occidental CEO Vicki Hollub and Former North Dakota Senator Heidi Heidkamp took the opportunity to gloat about recently expanded Federal 45Q tax incentives for carbon capture, a technology that *might* push us along a green road, but certainly helps oil fracking profits along the way. When I mentioned something more universally beneficial like market-based Carbon pricing, Hollub was flatly opposed and Heidkamp dismissed it with “Cap and Trade? It doesn’t work!” I declined to push back with the multiple, decades-long successes that the Euro markets have had with various forms of carbon markets, none of which much resemble the old ‘cap and trade’ formulas of the 1990’s. I also didn’t point out that the American Petroleum Institute (API), the largest US oil trade association had officially supported carbon pricing - meaning that Exxon, Chevron and Conoco were now behind it too. It seems that carbon pricing may not “work” for small independent E&P’s in North Dakota and Texas — but for the big boys, they’ve figured out how to make it work just fine.

But enough hammering on big(gish) oil. In this post, it’s time to turn the tables and express some major disappointment with the environmentalists as well - through another anecdote I recently experienced.

I’ve been promoting my latest book, Turning Oil Green and mostly failing, and I’m starting to understand why: The book finds (unequal but significant) fault in both the Right and Left in the slow progress this country is making transitioning away from oil. It points out the dire need of fully engaged multinational oil and gas companies in the Green revolution. Without them, I don’t see any way that disastrous 1.5C climate targets won’t be breached. But instead of embracing the serious efforts big oil are making towards carbon zero or carbon neutral initiatives, I’ve observed nothing but villainization of oil companies from the Left. This blanket vindictiveness seeks to block big oil from participating in the upcoming energy transition, whether that includes hydrogen, solar, wind, geothermal, electric smart grids, battery tech, carbon capture — anything. I’ve realized that my trouble finding platforms to promote my practical-actions-and-possible-outcomes book is largely because it has no echo chamber audience it can speak to. Finding both sides a little to blame isn’t a happy message that either one wants to hear.

Here’s my latest example from the Left (knowing how appreciated my thoughts already are from oil companies on the Right):

I had sent my book to several of the largest ‘green’ blogs and podcasts for review and possible interview, and heard back from none of them. Finally, I chose to follow up with one of the biggest and received this reply:

“Hi Dan. Yes, I did read it, and thanks for sending it, but I decided that it wasn't a thesis I wanted to cover. You know a lot about oil and gas but I don't think you understand the project of energy transition, and I think your idea for artificially supporting oil prices is counter-productive. Sorry.”

The statement doesn’t require much translation. This podcast host isn’t particularly interested in an argument that might actually move the transition ball forwards in a practical and meaningful way, not if that argument advocates for oil company involvement and oil company profits. He knows his audience won’t listen — climate help from oil companies? That’s just ridiculous fox in the henhouse stuff.

It’s how all the folks I’ve approached on the Left feel. I’ve just not seen it this bluntly spelled out before.

Well, I’ve got some news for them, having been a trader, analyst, advisor, media expert and (left-wing) observer of the energy markets for the past 35 years:

They better get over it. Fast. Here one truth of the country we live in: 8 states have their economies tied up in oil and gas for at least 30% of their revenues. That’s 16 senators out of 100 who will knee-jerk vote against anything in Washington that might affect their oil folks’ jobs. The oil companies further spend $200m a year lobbying and another $150m during every political cycle (that we can see) trying to “convince” the other 84 senators to vote with them. History proves they've spent their money to great effect. Do you think you can create a sustainable Green revolution in this country without the help of Congress?

And while the left hopes for a clean energy future that eliminates fossil fuels (and fossil fuel companies) entirely, here’s another truth: There isn’t another system anywhere that can price, transport or deliver energy in any form, whether green or not, outside of the pipeline/processing/refining/grids/train/trucks/power lines etc. that current energy companies already own, finance and derive their livelihoods from. You want to try recreating all of that in order to exclude big oil and gas? You’re just making your job a lot tougher - for no good reason other than spite.

We’re living through some of the most politically charged and divisive times this country has ever seen. Every issue comes with its own brick wall dividing the two sides, with nothing seemingly able to penetrate through. With climate change, however, we may not have the luxury to bathe in our own self-righteousness and distain, not if we’re really looking to avoid some nasty environmental outcomes that will hurt us all.

My book is not the only path - but it does suggest ways in which both sides can win in the ways most important to them: the Right can protect the economic growth, jobs and other benefits of a robust US fossil fuel industry, and the Left gets the quickest and most efficient path of transitioning from oil towards sustainable energy sources.

But first, both sides need to recognize and understand each others’ goals and show a willingness to listen to some possible and practical measures that will further both of them.

The march toward sustainable energy isn’t about to stop. But global demand for oil is projected to continue to increase for the next 10 years at least, according to….well….everyone. So, neither is the power and influence of the oil and gas industry in the United States about to shrivel up and die, either.

Start with that immutable truth and work from there. And don’t be afraid to take yes for an answer, even if it’s from someone you’ve been told to hate.