Regulatory Policy

Kneecapping the Oil Industry Won’t Help the Economy or the Environment

Pumpjacks in an oil field in Midland, Texas. (Nick Oxford/Reuters)
The Biden administration's war on oil and gas will hurt American workers while moving energy production to countries with worse environmental standards.

On Earth Day this year, President Joe Biden unilaterally committed the United States to a 50 percent cut in carbon emissions by 2030. Biden’s Intelligence Director, Avril Haines, declared climate change as the center of American foreign policy for the decade to come. Even Treasury secretary Janet Yellen, a fine economist but hardly a climate expert, dutifully called climate change an “existential threat.”

Their hearts might be in the right place, but America also needs level heads. While committing to sacrificing our energy supremacy — achieved thanks to America’s shale revolution — the Biden administration appears willing to overlook energy production in countries such as China, India, Vietnam, and Indonesia, which boast nearly one-third of the world’s population. It is a giant leap of faith to assume that these countries will follow our lead in cutting off their cheapest sources of energy. Even most of the European countries that signed the Paris Climate Agreement didn’t come anywhere close to meeting their commitments five years after signing that treaty. Meanwhile, the U.S. has been one of the global leaders in reductions in air-pollution levels, even as Donald Trump pulled us out of unenforceable treaties that put America’s economic interests last.

Now that Biden is all in on reducing America’s fossil-fuel production, the pressure is on American energy companies to reduce their carbon footprints and pursue “sustainability” objectives. Blackrock, one of the world’s largest asset managers, is bullying our energy companies into unilaterally pursuing expensive global warming objectives by threatening to divest its stock holdings or exert influence with the board to command more green reforms.

Meanwhile, this “environmental justice” movement is now going after even the smaller independent energy companies. It is not enough that some of the biggest names in oil and gas, such as British Petroleum (BP) and Chevron, have reduced their carbon footprints. Radicals such as those at The New Republic claim that “apocalypse” is descending upon us. The magazine is now calling for outright nationalization of the oil industry in order to “steward a managed decline in the public interest, ensuring abandoned rigs and reserves aren’t auctioned off to private-sector vultures eager to pump them for all they’re worth with scant oversight.”

These critics are angry that American oil and gas companies are selling some of their oil and gas assets at home and abroad to fossil-fuel-friendly entities.

The New Republic has been complaining, for example, that BP transferred ownership of some of its oil and gas resources to energy company Hilcorp. Hilcorp intends to keep the Alaskan wells running, a much-needed boon to a state that lost over 3,000 oil and gas jobs during the pandemic.

These complaints are absurd, since only a firm interested in developing oil and gas would buy up oil and gas fields and assets. Who else would? If the Left wants these fields to stop producing and go dry in order to save the planet, perhaps the Environmental Defense Fund or Greenpeace should gather contributions from their millionaire members, purchase the fields, and take them out of commission.

What the greens seem to be seeking is an immediate shutoff of American oil and gas production. This is one of the dumbest ideas in modern times. Some 98 percent of American cars are fueled by combustible engines. It will take at least 30 years for the United States to reach even 50 to 60 percent electric vehicles, meaning that American motorists will have heavy demand for oil and gas unless the environmentalists plan on blowing up our cars. Perhaps I shouldn’t give them any ideas.

What about energy for our homes, our stores, our factories, our airlines, and our steel and auto industries? Today about 75 percent of our energy comes from fossil fuels and less than 10 percent comes from wind and solar. Does anyone believe we can go from 80 percent to zero instantaneously?

We will be using oil and gas in America for at least the next 30 years. The only question is whether we get it from Texas, Oklahoma, and North Dakota — or Saudi Arabia, Iran, Russia, and OPEC nations. This is a dangerous strategy for our economy, our jobs, our national security, and even for the environment. Russia, China, and Iran have much worse environmental records than America does. American coal, for example, is the least environmentally damaging in the world, so shutting down American coal increases production in countries with virtually no environmental or safety rules.

Yes, we only have one earth, and we need to protect it. But we need to be realistic about the solutions to these complicated questions. Is eliminating thousands of jobs and billions of dollars of domestic production for a symbolic victory that only empowers foreign polluters really a good direction for public policy? We certainly don’t want to shut off our homegrown production, nor should we move to a nationalized energy industry that would provide all the reliability in our energy system that we get from the Postal Service and Amtrak.


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