President Joe Biden and global warming

Joe Biden demonstrated his concern with climate change during his presidential campaign and has spoken about climate change and the wildfires that affected the Western States. He has promised an ambitious agenda to tackle climate change, although the oil industry does not express extreme pessimism for the immediate future. There is no question that President Biden is a climate-conscious leader who has avowed to transition away from the oil industry.

Over the last decade, the shale revolution has transformed the USA into the world’s top petroleum producer. Donald Trump was an ally of the oil & gas industry, whereas Biden has emphasised the devasting cost of carbon emissions to the climate.

Environmental regulations, which were rolled back by Trump, are being reintroduced. Biden is restricting, or outright banning, new drilling on federal land by executive order, although the majority of US oil and gas production is on private land.

Biden did lay out a vision for ambitious climate action. It is not the same as the Green New Deal, though it shares many of the same goals, and the President sought input from more progressive members of the Democratic Party for his $2 trillion (approximately £1.4 trillion) proposal. Among other aspects, his plan calls for massive investments in renewable power such as solar and wind, which compete with fossil fuels. It also includes much more support for electric vehicles, which would reduce demand for petroleum.

Big Oil had anticipated a Republican majority in the Senate to apply the brakes to bold new proposals, but the election of two Democrats from Georgia has given the Democrats control of the Senate as well as the House of Representatives.

More importantly, transitioning away from oil is not a surprising idea to energy insiders. The oil industry itself has already been preparing for that future – while emphasising that the transition might take a very long time – as the effects of climate change grow ever clearer. It is evident that a move away from fossil fuels is already underway at a societal level.

The coronavirus pandemic has been disastrous for many oil and gas companies, reducing travel with a consequent reduction in oil demand. There is an argument that a president who manages a gradual shift away from oil might actually be better for business in the medium term. The biggest boost to the bottom line in the short term may come from getting the pandemic under control.

Never discount the capability of mankind and of entrepreneurs to adjust to circumstances. With the change in circumstances, a change in direction can stimulate entrepreneurial abilities to create energy from sources such as wind, tidal and other non-injurious mechanisms. This, in turn, will require the non-destructive testing industry to create and invest in technical adjustments to meet the operational safety of the innovational energy production.

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