Carbon emissions have been down in recent weeks because of the pandemic because far fewer people are driving or flying. But that has also meant less demand for fuel, and less revenue for oil and gas companies. As a result, some European-based companies are investing more of their resources into renewable energy production. But American oil and gas outfits are not.
Ron Bousso reports on the oil and gas industry for Reuters, and he told Texas student host David Brown on Thursday that companies on both sides of the Atlantic have had to slow spending on oil and gas production since the pandemic. But European companies have redirected some of their remaining resources toward renewable energy.
“The share actually rose from their overall spending plans,” Bousso said.
The difference comes down to how each continent’s producers view the future of oil and gas. European companies had already committed to a zero-carbon-emission plan by 2050, even before the pandemic. And the past few months have shown that so-called peak oil demand could be coming sooner than expected. Meawhile, American firms like Chevron and Exxon still expect oil and gas demand to rise for at least the next 20 years.
“[It] strengthens their case for investing in oil and gas,” Bousso said.
Social factors also play a role in the divergent approaches. The degree to which a company is confident in the future of oil and gas runs parallel with prevailing attitudes about climate change. The 2015 Paris climate agreement exemplifies the American-European divide. President Donald Trump pulled the United States out of the Paris agreement in 2017, while the European Union stayed in. Almost 200 countries have signed the agreement, committing to limit carbon emissions to slow global warming.
“The political climate in Europe is definitely gearing towards this transition, whereas in the U.S., we’re seeing strong support for the traditional oil and gas business,” Bousso said.
What’s more, some European and Asian governments are expected to incentivize energy companies to invest even more in renewable energy through pandemic economic stimulus packages.
Web story by Caroline Covington.
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