Dilemmas of U.S. Decarbonization

Abstract

This article investigates controversial relations between energy security and energy transition from fossil fuels to renewables that are observed in petroleum producing countries, since energy transition jeopardizes the long-term future of the oil and gas sector because it entails a gradual reduction in hydrocarbon production. This problem represents a serious challenge for all petroleum-producing countries, but this challenge is particularly serious in the United States, which recovered its former status of energy superpower due to the shale revolution. Simultaneously, it intends to become a global leader of energy transition under the presidency of Joe Biden. In general, the policy of oil companies’ decarbonization is influenced by a number of factors: government climate policy, activities of international organizations, attitudes of financial institutions, shareholders, investors, NGOs and consumers. While European oil companies feel quite a stable and consistent pressure from all these factors that force them to pursue a fairly radical decarbonization policy, the situation in the US is not that straightforward. On the one hand, government climate policy has recently sharply fluctuated, from Barak Obama to Donald Trump to Joe Biden, sending controversial messages to oil corporations. While currently decarbonization policy is a priority of Joe Biden’s administration, if Donald Trump wins the 2024 elections, the future of energy transition in the US might be challenged because he has always strongly focused on strengthening US energy security. On the other hand, the leading US oil companies through their lobbying efforts exert a significant influence on the government climate policy, seeking to ensure a long-term future of hydrocarbons and trying to find a balance between energy security and energy transition that would benefit them. They realize that it would be feasible for them to become leaders of the energy transition by adapting it to their strategic needs.