“Unfortunately, our economic bedrock of oil and gas is under attack by an administration that is bent on eliminating millions of jobs,” Republican Congressman Brian Babin announced to the public last week at a press event along with six other Texas politicians, with the refineries and petrochemical plants of the Houston Ship Channel as a backdrop. Babin’s statement echoes the fears of many in and around the United States oil and gas industry, which sees itself as under siege by the Biden administration's climate-forward policy goals. President Biden, for his part, did little to quell fears in the shale patch when he signed an executive order pulling the plug on the massive Keystone XL pipeline project on his very first day in office. Yes, it’s true that things aren’t looking good for shale jobs, and fears of the sector’s accelerated downturn under the Biden administration are far from unfounded. It’s also true that despite a sea change in attitudes toward climate and clean energy, the world still runs on fossil fuels. Even if we are currently experiencing peak oil, as many experts contend, we will still continue to need oil and gas for decades down the line before these fuel sources become obsolete. Rome was not built in a day and decarbonization can’t and won’t happen overnight.
But while politicians and industry insiders sound the alarm bells about Biden and the Democrats’ attack on “our economic bedrock of oil and gas,” experts are telling a very different story: a move away from fossil fuels is actually the best thing possible for Texas, New Mexico, and other states with petro-economies.
While many fossil fuel industry advocates will be quick to pin the “death of shale” on Biden and the Democrats, the reality is that shale’s decline has been a long time coming. Thanks to shifting global energy priorities and demands, along with the relatively short lifespan of shale oil wells and the relatively pricey operation costs, shale has been in a tight spot for years.
Nationwide, oil and gas jobs have been in freefall for a while now. “In 2014, more than 2.5% of jobs in Texas were in the oil and gas, mining and quarrying industries, according to the Texas Workforce Commission,” the Texas Tribune reported this week. “At the beginning of 2020 — before the coronavirus pandemic and a global drop in the demand for oil — the share of jobs in the Texas oil and gas field had fallen to about 1.8%.”
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In Texas, where oiliness is next to godliness and loyalty to fossil fuels has as much or more to do with ideology as it does with economics, there’s a strong argument to be made that Biden is doing the state a favor by nudging them toward a clean energy transition. The faster the state lets go of shale and positions itself to be an energy leader of the future instead of holding on to their energy dominion of the past, the better Texas workers will fare.
When it comes to job creation, green energy is the way to go. Back in June PV Tech reported on “a raft of new studies” which has “come to underscore the business case of pushing renewables to the heart of the COVID-19 recovery, amid claims green energy plays offer a low-cost, high-return opportunity for investors.” And a just month after that report, “physicist, engineer, researcher, inventor, serial entrepreneur, and MacArthur ‘genius’ grant winner” Saul Griffith’s organization Rewiring America “made its big debut with a jobs report showing that rapid decarbonization through electrification would create 15 million to 20 million jobs in the next decade, with 5 million permanent jobs after that.”
Texas is already a major wind power producer, and the state has major potential to emerge as a frontrunner in renewable energy storage and large-scale solar farms. Oil states have the infrastructure and they have the workers. Now it’s time to put away partisan politics, focus on simple economics, and lean into the future.
By Haley Zaremba for Oilprice.com
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Trump encouraged shale oil drillers to put geopolitics ahead of economics. He urged them to adopt empty slogans of his discredited “America First Policy” such as ‘achieving US energy dominance’, ‘making America oil self-sufficient’ and ‘claiming America the world’s largest crude oil producer’ thus encouraging them to produce recklessly and in so doing destabilizing the global oil market and prices and accelerating the eventual demise of their industry.
President Biden will try to reverse these destructive policies and in so doing he will be helping the economy of Texas and the United States’.
The economy of Texas like the global economy will continue to be dependent on oil and gas throughout the 21st century and probably far beyond. Shale drillers can truly support Texas by letting economics trump politics. And contrary to claims that green energy is the way to go, shale drillers can extend the greatest service to the environment by producing wisely and cutting the methane emissions in their fracking and sticking to the core business that made Texas the heart of America’s oil industry.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Decarbonization does not necessarily mean closing oil and gas companies, it means removing existing carbon from the atmosphere or capturing carbon output at the source.