Biden’s Big, Bold, Surprising Plan for a Green Transition (I Hope)

LANCE: While this administration meets regularly with environmental groups who want to eliminate all fossil fuel use immediately, there’s very little dialogue with the oil and gas industry. We have had some meetings — but to be honest, there haven’t been genuine discussions regarding 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 just 12 percent, even after decades of wind and solar power construction encouraged by government mandates and tax breaks. Because oil and gas will remain in the energy mix well past 2050, we need a constructive dialogue with the administration, Congress and the American people on energy supply security, diversity, affordability, the energy transition and lower-carbon technologies. Demonizing the industry does not solve the problem.

FRIEDMAN: If there were a “Biden Green Transition Plan,” what would you want and what do you think the industry could give?

LANCE: What we need from 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. Few industries ever see such a huge percent of revenue disappear so quickly.

Drilling permits alone are not enough. To encourage investment, government should resume orderly and consistent leasing of federal lands for exploration and development — and not sporadic and inconsistent — and expedite permitting approval not only for drilling, but also for the pipelines, roads and other infrastructure needed to facilitate new oil and liquefied natural gas production. These investments are typically longer cycle and require even greater regulatory certainty.

FRIEDMAN: And what green commitments should the oil industry make?

LANCE: All producers should have net-zero commitments. And our industry — and that means everyone, public and private companies — should deal with methane emissions, leaks and flaring once and for all, while upholding our imperatives on energy affordability and security. We should ensure all “orphan” wells are plugged in a timely manner, make real progress on carbon capture and storage, explore such low carbon sources as hydrogen, and assess the potential of nature-based carbon offsets.