The greening of the American oil industry has gone into overdrive.
Dan Yergin, IHS Markit vice chairman, said it’s an important turning point for the fossil fuel sector, which has been anticipating big changes with President Joe Biden’s climate-focused, clean energy policies.
“The oil and gas industry is calibrating itself to what has become the new benchmark — net zero carbon by 2050. There’s a lot of variation in strategies and thinking about what will be the new map to get there,” said Yergin. “But the big cross-cutting themes that jump out this week are hydrogen, carbon capture, innovation — and the need for large companies with engineering capabilities that can operate at scale — which is where the oil and gas industry happens to be.”
Yergin was speaking from the annual CERAWeek by IHS Markit energy conference, held virtually this year, and he said a hot topic at the conference among energy producers this week was how to reduce their carbon footprint long term.
The chief executive officers from BP, ExxonMobil, Chevron, Occidental Petroleum and ConocoPhillipsspoke about the industry transition to a lower carbon world. Exxon separately holds its investor day Wednesday and is likely to cover the same ground.
Occidental Petroleum CEO VIcki Hollub told the conference her goal is to produce net zero carbon oil. She said that in 15 to 20 years, Occidental will be a carbon management company, not just an an oil company. Carbon, a byproduct of fossil fuels, is blamed for accelerating climate change
“With respect to the Biden administration, I would say the good thing is the Biden administration and President Biden understand and know how important carbon capture and sequestration to mitigate the impact of climate change,” said Hollub. “They know that. I believe they’re going to take steps to address it. This is a big opportunity for them. It’s a big opportunity to make a huge difference for the United States and be a leader in the world.”
The oil and gas industry has already been moving toward a cleaner future, even as the U.S. sat out of international climate discussions during the Trump administration. Biden immediately put the U.S. back into the Paris climate agreement.