Oil & Gas 360 Publishers Note: Robert Bradley, Jr, Founder and CEO of the Institute for Energy Research Principal, MasterRsource: A Free-Market Energy Blog, has put a great article together on Chevron’s view on diversification into the “Greenout”. There is a right way to look at power generation – “Balanced”. Use the lowest kWh to get power to the people to elevate everyone on the planet from poverty. Using the “Greenout” methodology is simply not a good Steward of our planet.
The loaded title: “Chevron’s Answer to Climate Change Is to Keep Drilling for Oil” (August 13, 2020). The condemnatory subtitle from Bloomberg Green’s Kevin Crowley and Bryan Gruley: “The energy giant believes it can still wring years of profits from fossil fuels while its European rivals embrace renewables.”
Go Chevron! The global and U.S. market share of fossil-fueled energy is 84 percent and 80 percent, respectively. And these percentages could well increase, not decrease, due to strong consumer demand for dense, reliable energies–and taxpayer fatigue for inferior substitutes (wind, solar, ethanol, batteries/EVs).
Fossil-fuel optimism is not only realistic but a great story. Speaking truth to Greenout Power demotes political correctness and promotes economic understanding.
The Bloomberg article follows with my interspersed comments:
Speaking to the Texas Oil & Gas Association in July, Chevron Corp. Chief Executive Officer Mike Wirth assured his audience that the global clamor for clean energy “doesn’t mean the end of oil and gas.” On the contrary, Wirth said, the energy business is simply undergoing another of its natural transitions. “We’ll find ways to make oil and gas more efficient, more environmentally benign,” he said. “And it will be a part of the mix, just as biomass and coal are still enormous parts of the mix today.”
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Comment: Quite true. Oil and gas remain dominant as they have been for a century or more. (Coal, when viewed globally, remains an energy powerhouse too.)
To activists alarmed at the urgency of the climate crisis, Wirth’s comments are as out of touch as they are predictable, coming from someone who profits from the status quo. For unlike its rivals in Europe, Chevron is betting its future less on renewable energies such as wind and solar and more on the subterranean stuff derived from hydrocarbons. It’s a multibillion-dollar gamble that would have been even less surprising before the coronavirus reared its spiky head. By eviscerating demand for petroleum products when business and consumer activity suddenly slowed, Covid-19 has shown the world’s biggest oil and gas companies a vision of a bleak future in which they’re neither wanted nor needed.
Comment: Out of touch? Or just politically incorrect? Media bullying by climate alarmists and keep-it-in-the-ground obstructionists will come and go; a pro-consumer, pro-taxpayer company should not lose focus.
Tying Chevron’s viability to what is going on in political hot-spots and pretending that Covid is a negative game changer for fossil fuels is disingenuous.
A chastened BP Plc responded on Aug. 4 by announcing dramatic steps to address climate change, including an unexpected vow to reduce oil and gas production 40% over the next decade; CEO Bernard Looney said the strategy was “amplified by Covid.” In sharp contrast, Exxon Mobil Corp. has reiterated its commitment to being oil’s last man standing decades from now. Chevron, for all of Wirth’s prognosticating about crude’s bright future, is pursuing a more nuanced path that embraces something frequently alien to Big Oil: flexibility.
Comment: False. This is propaganda trying to get a free-market company to go political. Resist.
Wirth pointed to whales as a case in which oil companies were able to expand their traditional business while producing positive change for the environment. Back in the 19th century, the creatures “were being whaled into extinction,” Wirth said, because their oil was needed as fuel for lighting. Then crude oil companies came along with kerosene to replace it. “Ironically, ‘Save the whales’ is a catchphrase for saving the environment,” he said. “In fact, our industry helped save the whales.” Whether sticking with fossil fuels will make endangered species of Chevron and its brethren remains to be seen.
Comment: Chevron CEO Wirth is right. Fossil fuels have been–and will be–good for the environment, a story for another day.
For the full article please go to: Natural Gas Now
Robert Bradley, Jr.
Founder and CEO of the Institute for Energy Research
Principal, MasterResource: A Free-Market Energy Blog..
