LANCE: Although this administration regularly meets with environmental groups that want to eliminate all fossil fuel use immediately, there is very little dialogue with the oil and gas industry. We have had some meetings – but to be honest, there have been no real discussions on energy supply issues, energy security, regional North American cooperation and planning for a rational and coordinated energy transition to a low-carbon economy.
Oil and gas together supply 68 percent of U.S. energy today, while renewables supply only 12 percent, even after decades of wind and solar construction encouraged by government mandates and tax breaks. Because oil and gas will remain in the energy mix well beyond 2050, we need a constructive dialogue with the Administration, Congress, and the American people about energy security, diversity, affordability, the energy transition, and low-carbon technologies. Demonizing the industry does not solve the problem.
FRIEDMAN: If there was a “Biden Green Transition Plan,” what would you want and what do you think the industry could provide?
LANCE: What we need from the government is stability and predictability. Sensible, predictable regulatory policies can foster a better investment environment. For example, from December 2019 to April 2020, oil prices fell from around $70 to $19 per barrel. barrel. Few industries ever see such a large percentage of revenue disappear so quickly.
Drilling permits alone are not enough. To encourage investment, the government should resume orderly and consistent leasing of federal lands for exploration and development – not sporadic and inconsistent – and expedite the approval not only for drilling, but also for the pipelines, roads and other infrastructure needed to facilitate the production of new oil and liquefied natural gas. These investments are typically a longer cycle and require even greater regulatory certainty.
FRIEDMAN: And which green commitments must the oil industry undertake?
LANCE: All producers should have net-zero obligations. And our industry – and that means everyone, public and private companies – should deal with methane emissions, leaks and flaring once and for all, while maintaining our demands for energy affordability and security. We should ensure that all “orphan” wells are plugged in a timely manner, make real progress in carbon capture and storage, explore such low carbon sources as hydrogen, and assess the potential of nature-based carbon offsets.