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Oil Giants Back Carbon Capture But Warn Against Demand Destruction

When it comes to emissions reduction, carbon capture and storage is the main focus of the oil industry. That was the message from company executives and government officials who gathered this week in Calgary for the World Petroleum Congress.

The oil world signaled it was on board with emission reduction but it was not on board with oil demand destruction, per a Bloomberg report that quoted attendants including Aramco’s CEO, the chief executive of Exxon, and the Saudi energy minister.

“There seems to be wishful thinking that we’re going to flip a switch and we’ll go from where we’re at today to where it will be tomorrow,” Exxon’s Darren Woods said, adding “No matter where demand gets to, if we don’t maintain some level of investment in the industry, you end up running short of supply, which leads to high prices.”

We are seeing this in real time right now but it has not stopped transition advocates from forecasting peak oil demand and even calling for governments to target oil demand instead of supply as a way of reducing the production of hydrocarbons.

A recent column in Reuters argued that in order to reduce oil and gas production and related emissions, governments had to focus on end users and tax their use of hydrocarbons. In other words, the author argued for even higher prices for energy.

Such a course of action could backfire, however, according to Aramco’s Amin Nasser. He reiterated Woods’ call for stable investment in oil and gas, saying, “Otherwise in the mid to long term, we will have another crisis and we will go backwards in terms of using more and more coal and other cheap products available today. And all these decarbonization efforts will go down the drain.”

Alberta’s Premier Danielle Smith perhaps summed up the attitude of the industry best: “We are transitioning away from emissions,” she said, as quoted by Bloomberg. “We are not transitioning away from oil and natural gas.”

By Irina Slav for Oilprice.com

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  • Ian St. John on September 19 2023 said:
    They are on board with Carbon Capture because it will destroy the 'harm reduction' of fossil fuels while giving them public money. The Amine process is an energy hog. The amines are easily poisoned and no commercial installation has been viable (some are still run for CO2 for oil well injection but those are not 'competitive'. Meanwhile they are denying the obvious to try to get more subsidies to hang on a little longer.

    Nobody says that oil will disappear overnight but exploration investment, pipelines, and electricity generators are multi-decade investments that are declining because the end is in sight. The transition will probably be mostly over within a decade or two at the most.
  • John H on September 19 2023 said:
    Hmm. So "emissions" aren't a problem once you sell the oil and gas?

    Of course that is why the market will never address climate change. Dumping carbon into the atmosphere happens when you burn it, not when you produce fossil fuels.

    Society accepts that producers need to clean up their waste. But somehow consumers dumping carbon into the atmosphere shouldn't have to pay the cost because that will create "demand destruction."

    Nonsense. Someone has to get charged the actual cost to clean up dumped carbon. Doesn't matter whether it's the consumer directly or the fossil fuel producers. But the market will stay broken until that happens.

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