Washington’s attack on oil and gas could backfire

That the Biden administration and the Democratic-majority Congress set their sights on the oil and gas industry as the ultimate culprit of climate change was clear even before last year’s election. Now it looks like Washington is doubling down on its pledge to crack down on oil and gas in any way it can. But the movement can turn against you.

Last week, the House Oversight Committee wrote to executives of the largest oil companies operating in the United States as well as to the American Petroleum Institute and the American Chamber of Commerce to inform them that it is currently investigating these companies for disinformation about climate change. The letter also called on leaders to come to Congress next month to testify on the issue.

“We are deeply concerned that the fossil fuel industry has reaped huge profits for decades while contributing to climate change that is devastating American communities, costing taxpayers billions of dollars and ravaging the natural world,” he said. writes the committee.

“We are also concerned that to protect these profits, the industry has reportedly conducted a coordinated effort to disseminate disinformation in order to mislead the public and prevent crucial action to combat climate change.”

The letter cites a number of reports from media outlets such as The Guardian, Mother Jones, The New York Times and Inside Climate News, largely summarizing the information in those reports and stating very clearly that it is going after Big Oil for spreading disinformation and hiding facts about climate change.

Related: The Global Pipeline For Green Hydrogen Projects Grows Now, a House committee hearing is certainly not the end of the world for any of the companies summoned, although the letter’s writers note that their primary target is Exxon. However, news of the convocation comes shortly after it became clear that the New Democrat’s plan to decarbonize the network has excluded natural gas as a clean energy source. In fact, the plan will penalize electricity providers who use natural gas to generate electricity while rewarding those who generate it from renewable sources.

This is not all, however.

Last week a group of progressive Democrats introduced a bill that seeks to prohibit US banks from financing fossil fuel projects from 2030. Called the Fossil Free Finance Act, the legislation would require the Federal Reserve to require all banks with more than $ 50 billion in assets and all systemically important non-bank financial institutions that they reduce their funding of polluting industries by 50% by 2030 and by 100%. by 2050. Fossil fuel funding, under the bill, is expected to end by 2030.

“For too long our federal government has looked the other way as our nation’s biggest banks fund the dirtiest fossil fuel projects, exacerbating the climate crisis and preparing us for a massive climate-induced economic collapse. This has to change, ”said Rep. Ayanna Pressley, one of the bill’s sponsors.

Now, these are all bills and plans that may never see the light of day as actual laws. Given the internal divisions of Democrats along energy lines, it is highly unlikely that the latest bill will become law. However, the direction the Congress is taking on energy may, on the basis of recent events in Europe, be a bit reckless.

Related: US Set To Set Another Solar Record Despite Rising Costs

What we are currently seeing in much of Europe, notably the UK, is a large-scale case putting the cart before the horse. The UK is currently in pangs a major energy crisis as gas prices have tripled since the start of the year and the country’s wind capacity has recently been underperforming, causing an electricity crisis that has driven up energy bills. electricity much higher than anyone who is comfortable. Earlier this month, the UK was even forced to reopen a coal-fired power plant to replace its production with gas and whatever wind and biomass could generate.

In other words, the United States has the chance to see how not to make the energy transition and to learn from it. Instead, its legislative majority doubles its rapid decarbonization plans that could severely affect the local oil and gas industry, leaving the world’s largest consumer more dependent on imported energy. Given the size of America’s oil and gas reserves, that would be ironic at best and ridiculous at worst.

Right now, the Biden administration and Democrats in Congress are prioritizing the rapid electrification of the U.S. economy while decarbonizing the power grid. This will likely include shutting down coal and gas power generation capacity, as has happened in the UK. It will also mean a massive increase in wind and solar generating capacity. To compromise all this capacity, a few days of light wind or heatwave would suffice.

The current situation in Europe is a great lesson on how not to do it when it comes to decarbonization. Yet for a lesson to be useful, someone needs to pay attention.

By Irina Slav for Oil Octobers

More reads on Oil Octobers:

Previous Asia Capital Real Estate (ACRE) Provides 11 Loans Totaling Over $ 360 Million For Multi-Family Properties In United States | Business
Next Major agriculture group New Cooperative hit by ransomware attack