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[Editor's note: A version of this story appears in the July 2021 issue of Oil and Gas Investor magazine. Subscribe to the magazine here.]


Finally, an oil and gas industry leader that is standing up to the fossil fuel-free energy transition movement. Chris Wright, CEO of Liberty Oilfield Services, released the company’s inaugural ESG report in June, but with a twist. Titled “Bettering Human Lives 2020 ESG Report,” Wright enumerates over 40 pages of the myriad ways in which the industry has lifted the world’s experience and why it should continue doing so.

Wright opens the document with this to set the stage: “It is simply not possible to discuss the environmental and social impacts of our industry without considering the environmental and human impacts of the absence of our industry.”

Since the oil and gas industry began some 150 years past, global life expectancy has doubled, extreme poverty has plummeted and human liberty has grown tremendously, noted the report. “The timing here is no coincidence. This progress in the human condition was enabled by the surge in plentiful, affordable energy from oil, gas and coal.”

Looking forward, the report identifies three global energy challenges: energy poverty for one-third the world; maintaining reliable, affordable and clean energy in developed nations; and climate change. All three must be addressed, and none can be accomplished without oil and gas as part of the solution—yes, including climate change.

Wright’s manifesto that anchors the first half of the document is required reading by all in the industry that may feel on their heels from the onslaught of negative sentiment about its mere existence.

Liberty’s response to the anti-hydrocarbon movement comes just a week following the International Energy Agency (IEA) releasing its own report, “Net Zero By 2050: A Roadmap for the global energy sector.” The IEA report purports to catalyze “a total transformation of the energy systems that underpin our economies” to achieve net-zero global greenhouse-gas (GHG) emissions by 2050, a path that is “narrow and extremely challenging,” the organization admits.

And possibly unnecessary in its scope.

The IEA report, in its 224-page directive, will no doubt become the blueprint by which the energy transition proponents will model, including global governments. And while demand for hydrocarbons do not go to absolute zero in the model, they are marginalized to 20% of the energy stack largely in the form of noncombustible uses (petrochemicals), when paired with carbon capture technologies, and aviation, which is deemed harder to replace technologically.

But the oil and gas industry shouldn’t simply accept that imagined outcome. In fact, the industry should instead lead the effort on the role it will play in the new energy future to increase that percentage.

The industry itself, however, should look different by design as well. How to do that? First, accept that it’s just good business to reduce or eliminate onsite emissions in the near term. Doing so makes it easy for investors, communities and policymakers to support those that do. Many are already willfully making this pivot. The cost will become a routine part of doing business.


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Second, skate to the puck. Identify where oil and gas will be needed in 30 years and aim there.

Natural gas has played a huge role in reducing GHG emissions in the U.S. and can do so in displacing coal in developing nations as well. LPG can replace biomass for cooking in underprivileged countries. Blue hydrogen equals big demand for natural gas. Gas can be a star in the energy transition.

The future of oil demand, however, is subject to the saturation of electric or fuel cell vehicle adoption. The IEA report calls for a 99% reduction in road transport demand by 2050 replaced by renewable alternatives, a reality that analysts at Bernstein see as “highly unlikely.” And, “without broad EV and fuel cell adoption, it’s hard to cause oil demand to plummet.” Support of carbon capture and sequestration technologies is a good place for oil producers to aim to make their product energy transition friendly.

Third, message, message, message. The general public needs to see a steady drumbeat of consistent, positive marketing extolling the benefits they derive from oil and gas. Let the associations lead here. Fund them to do so. The uninformed environmentalists have won the battle of the message so far. Win the consumer.

The industry must accept that the move to an energy transition in some form is inevitable: That train has left the station. The question is: How will it play out?

Wright himself declared climate change must be one of the three energy imperatives for humankind to get right, basing his conclusion on a raft of data that even most climate-saving proponents are unable to do. But he also sees hydrocarbons as part of the solution to the problem.