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LOONEY SPEAKS: CEO Bernard Looney said BP will remain an oil and gas company for as long as the world demands fossil fuels during a wide-ranging conversation this morning about the future of energy.
BP, which compared to its U.S.-based competitors has gone further faster in the transition away from fossil fuels, took heat earlier this year from shareholders and activists for committing more capital to its oil and gas business alongside new planned spending on technologies and resources like renewables and EV charging.
The goal: Looney, in a conversation with David Rubenstein this morning at the Economic Club in Washington, D.C., emphasized BP’s spending plans and intention to reach net-zero emissions by 2050 by becoming a fully integrated energy company with businesses in EV charging, hydrogen, bioenergy, renewables, and power.
BP, on the road to there, has signed EV charging deals to supply companies such as Hertz with charging infrastructure and software.
“We want to be as big in EV charging as we are in fuel,” he said.
Oil and gas by comparison will be a “much smaller” part of BP’s portfolio by mid-century, he said, but it will still be there.
Acting under pressure: Looney challenged groups and individuals who protest BP’s continued investment in fossil fuels as impractical.
“There are people who simply want to see the end of fossil fuels overnight. That’s a position,” Looney said, drawing a contrast between a position and a point of view, adding later, “We need solutions and solutions don’t come from having a position.”
“It’s simply not practical. If we don’t invest in oil and gas, [production] will fall … When production falls and demand doesn’t change, one thing happens,” he said, pointing to the price hikes last year after the war in Ukraine began.
Demand persistence: EPA has estimated that over 60% of the vehicles sold from now through model year 2032 will be gasoline- or diesel-powered vehicles.
The Biden administration hopes to cut into the demand for oil with various instruments, including the Inflation Reduction Act’s revamped consumer EV subsidies and its proposed multi-pollutant vehicle regulations for 2027-2032 vehicles. EPA estimated its proposal would displace demand for 20 billion barrels worth of oil imports.
At the same time, officials such as Energy Secretary Jennifer Granholm have acknowledged demand will persist through 2050.
“I don’t see a near-term future where we don’t have a fuel supply that complements electric vehicles and provides customers choice,” EPA Administrator Michael Regan said this morning during a congressional hearing, expressing his support for E15 and biofuels more generally as a way to reduce emissions with traditional vehicle technologies.
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WHITE HOUSE LOBBIES FOR COMPROMISE IN PERMITTING FIGHT: White House adviser John Podesta pushed Congress to meet somewhere in the middle as they debate the permitting reform proposals floating around from various lawmakers and caucuses.
Podesta, speaking at an event hosted by the Bipartisan Policy Center this morning, sketched out some of the White House’s priorities, the foremost of which is increasing the speed and scale of electric transmission to connect renewable energy projects to the grid.
Speeding up project permitting on federal land and easing local opposition, something the administration is having immense trouble with on projects like Lava Ridge Wind in Idaho, are other leading priorities.
A word to allies: Podesta asked groups and stakeholders involved in litigating against projects to support constructing new projects or else suffer the ill effects of climate change.
“We got so good at stopping projects that we forgot how to build things in America,” he said, adding, “If we can’t build some new things in a few backyards, the climate crisis will destroy everyone’s backyards. I may not be popular among my friends in the environmental movement for saying that, but that is the reality.”
What’s on the table: Republicans’ HR 1, Sen. Joe Manchin’s Building American Energy Security Act, Sen. Shelley Moore Capito’s RESTART Act and Sen. John Barrasso’s SPUR Act, and House SEEC’s discussion draft.
The White House has backed Manchin’s bill again, support which Podesta reiterated again this morning: “The president doesn’t love everything in the bill but we support it because that’s what compromise means and it will take compromise on everybody’s part to get this done.”
Negotiating left to be done: Barrasso and Capito have some likely nonstarters for Democrats in their new legislation: codification of Trump-era WOTUS rule, de-facto approval of LNG applications where DOE misses deadlines, and prohibition against using the social cost of GHGs in regulatory analyses.
“No more ‘you can’t analyze the climate effects of a project,’” is one of the lines in the sand drawn by Podesta this morning.
BIDEN LASHES OUT OVER GOP’S IRA REPEAL: President Joe Biden accused Republicans of stripping down the Inflation Reduction Act with their Limit, Save, Grow Act because the “oil companies don’t like it” as the White House and Republican leadership face off over the debt ceiling.
The debt ceiling package would clip much of Biden’s signature law with its subsidies for clean energy technologies, which the administration and outside supporters have heralded as the largest climate change-related legislative package ever passed by Congress.
The IRA included some measures that some in the oil and gas sector oppose, such as the new methane fee, although executives from some of the most prominent companies have spoken favorably of the law for improving the economics of clean energy technologies into which the sector is expanding investment to reach their own decarbonization goals.
Occidental Petroleum, which is constructing a direct air capture facility in the Permian, plans to build 70 similar plants by 2035 because of the IRA, CEO Vicki Hollub said last fall.
Chevron CEO Mike Wirth said during the company’s fourth-quarter earnings call that the IRA “doesn’t necessarily change our long-term view on how we want to build businesses” but that he thought the law would de-risk investment technologies and make them more attractive for businesses.
MANCHIN VOWS TO OPPOSE EVERY BIDEN NOMINEE OVER EPA RULE: Manchin vowed today to oppose every one of the Biden administration’s EPA nominees over its planned power plant rule.
The West Virginia Democrat said the EPA’s plan shows that the administration is “hellbent on doing everything in their power to regulate coal and gas-fired power plants out of existence,” even at the cost of energy security or reliability.
The EPA power plant rule proposal, slated to be announced on Thursday, is expected to add requirements for fossil fuel-fired plants to use carbon capture and storage technologies.
U.S. GAS DEMAND EXPECTED TO INCREASE THIS SUMMER: U.S. natural gas consumption for electricity generation is predicted to reach its second-highest point this summer, behind last year due to warmer temperatures, the U.S. Energy Information Administration (EIA) said yesterday in its new Short Term Energy Outlook.
Meanwhile, it projects U.S. crude production to rise by 5% during the same period, due to an increase in global demand.
Residential electricity bills for consumers are expected to see a slight increase, due to the higher consumption and higher retail prices, according to a separate EIA report issued alongside the outlook. Customers in the West will use less electricity than last year, but in the Midwest, consumers are expected to use about 3% more electricity, the EIA said. Much of the demand forecasts are based on weather and therefore subject to change as summer draws closer.
GOOD NEWS FOR THE WEST: Meanwhile, high levels of precipitation in the West this winter helped refill reservoir levels, which had plummeted to record lows, and almost completely removed drought conditions that had plagued California and other parts of the West in recent years, according to the EIA’s Short Term Energy Outlook.
As a result, it is now predicting a 72% boost in hydropower generation in California this year.
Beginning last December, California experienced 12 atmospheric rivers, which contributed to high snowfall and flash floods—with levels so high that evacuations were ordered in parts of the state. But the wet winter conditions also helped ameliorate the extreme drought that has gripped California and many other Western states in recent years.
According to the EIA, reservoirs in the West—which are crucial to the region’s hydropower, and had dropped to record-low levels in some areas—have risen once again, returning to at or above historic average levels for this time of year.
The Rundown
Bloomberg Interview: Fossil fuel influence on us Supreme Court is pervasive, Whitehouse says
Wall Street Journal David Bernhardt: The Deep State is all too real
