Offshore oil is back

Presented by Equinor: Your guide to the political forces shaping the energy transformation

Mar 22, 2023 View in browser   By Arianna Skibell Presented by Equinor Brown pelicans fly near offshore oil rigs after sunset near Santa Barbara, Calif. | David McNew/Getty Images Despite the oil industry’s climate pledges and increased spending on low-carbon technologies, companies are doubling down on what they know best. Spending on new offshore oil projects over the next two years is projected to climb to levels not seen in a decade, writes POLITICO’s E&E News reporter Benjamin Storrow. U.S. oil giant Exxon Mobil is pouring money into projects off Guyana and Brazil. The United Kingdom and Norway are investing heavily in the North Sea. And Saudi Arabia’s state-owned oil giant is pumping money into a series of massive offshore expansions. While oil majors are spending more on low-carbon ventures such as hydrogen and carbon capture, those projects probably remain years away from turning a profit. “People who hoped the oil companies would stop investing in oil are likely to be disappointed,” Kevin Book, managing director at the analytics firm ClearView Energy Partners, told Ben. The climate impact of all this new development will depend on how the oil is produced. The more companies control the flaring of excess natural gas, the less energy they need to lift the oil from beneath the sea. How much planet-warming pollution is produced can depend on the project’s individual operations. And those factors can vary widely from region to region. But overall, more oil production is a recipe for more greenhouse gas emissions at a time when the world can ill afford it. Scientists estimate the world has nine years at current pollution rates before global warming takes a serious turn for the worse, and 30 years before it reaches catastrophic levels. And both the U.N. Intergovernmental Panel on Climate Change and the International Energy Agency agree that new fossil fuel infrastructure is incompatible with meeting international climate goals.   It's Wednesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from Equinor: The energy transition is the defining opportunity of our time. We all have a role to play. At Equinor, we’re doing our part by growing our renewable energy portfolio and lowering emissions from production. By the time the global population reaches 9 billion in 2050, our goal is to have net-zero emissions. Discover more about Equinor at www.equinor.com/USA.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Karl Mathiesen breaks down The United Nations' sprawling, sobering report about the world’s progress in slowing global warming. Power Centers Energy storage, advanced nuclear and hydrogen technologies. | Portland General Electric/Flickr (energy storage); Business Wire/AP Photo (nuclear); Petmal/iStock (hydrogen) Low-carbon tech The Energy Department has released road maps for industries and policymakers to bring three new clean technologies into the country’s energy mainstream — advanced nuclear, clean hydrogen and long-duration storage, writes David Iaconangelo. Developed in part for private investors, the three reports lay out the chief barriers for the three technologies along with possible solutions and rough timelines for their emergence in the 2020s and beyond. All told, costs could exceed $200 billion by 2030. GOP strategy As they put the finishing touches on their massive energy package, House Republicans plan to pressure Democrats on a core kitchen table issue: energy costs, write Kelsey Brugger and Jeremy Dillon. In wrapping up a three-day retreat in Orlando, Fla., Republicans seemed to be champing at the bit to harangue Democrats on Capitol Hill next week over prices at the pump and the supermarket. Made in America The Biden administration will release proposed guidance for the domestic sourcing requirements for electric vehicles to qualify for the Inflation Reduction Act‘s clean energy incentives next week, writes Kelsey Tamborrino. The $369 billion climate law Biden enacted last year limited the credits to EVs made using domestically produced mineral and batteries, angering European nations that complained the rules violated trade agreements by denying them the full tax credit.   A message from Equinor:   comment corner No room: All stations occupied at an Electrify America station on a snowy afternoon in Perry, Utah. | David Ferris/POLITICO's E&E News Electric vehicle chargers really rev your engine and grind your gears — In other words, we heard from a number of readers Tuesday after our story about my colleague David Ferris' electric vehicle road trip. Here's a sample of what readers are thinking about: One reader wonders why the federal government is spending billions on chargers when it might make more sense for local businesses to make the investment. "My wife and I have two electric cars and have taken long trips on one of them. Almost every time we charge, we get out of our car and grab a snack with coffee. I bought boots at an outlet and various other items while charging. It would seem that our DOT could put out Requests for Proposal to businesses throughout the country who would benefit from patrons charging their battery outside their place of business," he wrote. Another said we should be more focused on intracity travel as opposed to long-distance drives since the majority of traffic, and therefore pollution, is urban. A third reader said he's mostly concerned about chargers and access for middle- and low-income drivers who rely on used vehicles. "An EV with an aging battery will not have near the range of a new EV," he wrote. "The biggest problem will be high density areas with no ability to charge in off-street parking." Keep the comments coming, folks! We love hearing your take. In Other News Electric future: Women are less likely to buy electric vehicles than men. Here’s what’s holding them back. Buildings: When it comes to heat pumps, bigger is not always better.   DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID.     Subscriber Zone A showcase of some of our best subscriber content. Rows of chambers hold intermediate-level radioactive waste near Kincardine, Ontario. | John Flesher/AP Photo North America has a nuclear waste problem that is almost 150,000 metric tons and growing, with few long-term solutions for storing radioactive waste that takes thousands of years to decompose. Industrial powerhouse General Electric is investing tens of millions of dollars into developing direct air capture technologies as it seeks to grow its carbon management business. Louisiana's biggest utility is seeking an elevenfold increase in its renewable energy portfolio, asking state regulators for a green light to build up to 3,000 megawatts of solar power. That's it for today, folks! Thanks for reading.   A message from Equinor: The energy transition is the defining opportunity of our time. Our world needs energy to keep moving forward — but it must be affordable, reliable, and accessible. We all have a role to play. At Equinor, we’re doing our part by helping accelerate the energy transition. We’re growing our renewable energy portfolio and lowering emissions from production. We’re already on the way to powering 2,000,000 New York homes with energy from the Empire Wind and Beacon Wind offshore wind projects. We’re creating jobs, building tomorrow’s infrastructure, and sparking new economic activity. But for us, that’s only the beginning. By the time the global population reaches 9 billion in 2050, our goal is to have net-zero emissions. Discover more about Equinor at www.equinor.com/USA.     LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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