In November 2021, U.S. Secretary of Energy Jennifer Granholm asked the National Petroleum Commission (NPC) to conduct research on low-carb and zero-carbon hydropower in economic fields such as power generation, industrial processing and transportation. After World War II, President Harry Truman summoned the NPC to share the views of the oil and gas industry with the federal government. When the NPC was relocated in 1972, the constituency represented expanded, but the agency remained a key channel for communication between oil and gas and government stakeholders.
In response to Secretary Granholm’s request, NPC released it in April 2024 Utilization of hydrogen: A key element of the future of U.S. energy. As the title suggests, the report offers a positive view on the positive attitude of hydrogen as an energy commodity. Indeed, the first sentence in the executive summary is as follows: “Hydrogen can play a key role in reducing U.S. carbon emissions, especially in the medium. . The sectors that are difficult to soak, are socially costly, compared to alternative methods of emission reduction. cost”.
The next page of the executive summary lists four main topics of the report. The first is to retell the beginning sentence. The second says: “Major actions beyond current policies can unlock various LCIs [low-carbon-intensity] By 2050, the H2 demand area needs to support the US net zero. “One of the recommendation actions of NPC under this topic is indeed “Recommend 1”, which is aimed at “governmental” [to] Working with Congress, economically-wide prices are established on carbon before current incentives such as 45V expire. ”
Oil and gas industry – favorable prices for carbon! Some people suspect that public awareness of the position is limited (although NPC has always been Recorded The reactions of most people have been surprising since 2011. However, this aggressive carbon price advocacy is consistent with the tenet of business strategy. One of the important features that NPC wants to see in the carbon pricing mechanism can be seen: it should be “well-designed” Predictable Signals about decisions about long-term capital investment” (focused addition).
Predictability is one of these aspects of the business environment, and this aspect is so automatically beneficial that few people stop and think about why this is the case. However, some reflection on this issue is quickly made clear that predictability is valuable to the extent to which the company invests in the future. For companies that mainly live (and many people), it doesn’t matter whether the future can be expected.
From budget exercises to staffing forecasts, future casting takes all forms. It can be said that strategic planning is the most demanding form of future casting. Such a plan is based on the idea that “If we do a good job of forming the future of the business environment, we will be able to best utilize our strengths to capitalize on market opportunities and resist competitive threats. Transparent But if the future is Foreseeable rewards for strategic plans tend to disappear if predictability prevails. If predictability prevails, rewards will be realized. If not, the consequences can be terrible. (Current offshore wind developments in the Northeastern United States Suffering provides a good example. At this point, an outside observer of the oil and gas industry might say, “Yes, predictability is desirable, but for an industry it might make sense to promote a measure that will increase the price of its products.” ? ” After all, the basic economics says that if the price of something goes up, demand will fall.
It is true, but the oil and gas companies are staffed with skilled managers who are well aware of the dynamics of climate change, from molecular-level physics responsible for atmospheric thermal entrainment to negative feedback loops being played in geological In complex systems. In fact, there may be no social entity that has a better understanding of the trajectory of climate change than oil and gas companies, except for academia. (The literature supporting this claim is broad; Harvard Gazette – “Exxon has controversial results on climate investigations. Its scientists know better.” – is representative.) Therefore, due to a clear understanding of climate change (though it has not yet prevented confusion in its public communications), oil and gas executives may have an incentive to find and promote cautious ways of moving forward in their industries, especially one in In the words of recommendation 1, this is “phased and coordinated to minimize adverse effects on energy security, reliability and affordability”.
For oil and gas companies, the clarity of the unsustainability of the energy economy surrounding fossil fuels is actually a blessing. When large companies leave positions from market leadership, it is almost always because they have so much confidence that today’s situation will continue for the long term. Since oil and gas companies can know that disruptions to their current business models will arrive in one way or another, they are able to plan a very different future without detriment to the advantages of the status quo.
Final analysis, it seems that today’s oil and gas companies are confident that given their ability to conduct complex strategic planning, and the scope of resources they can apply to strategic implementation, a predictable business environment will be a great boon to make them Leading in all forms of destruction.
