The “adapt or die” headline targeting the US oil industry which was featured in our Daily report yesterday is a bit extreme, especially for an administration that does not believe it can enforce a carbon tax or cap and trade system. If the investment community were to make that statement frankly today it would have more credibility. There is talk about a Senate-sponsored bill to ban methane emissions or at least aggressively penalize them – which would be a better approach. Putting a high price on methane could encourage the use of some interesting small-scale technologies to turn local methane supplies into LNG, or methanol, or ammonia/urea. We have discussed all of these technologies in prior work and are happy to discuss them with anyone interested.
The other more interesting take on “adapt or die” might be “adapt and thrive”, which is likely a more palatable message to give to the energy industry. While the US seems to have limited teeth from a regulatory perspective, the rest of the world does not, and the ability for the US to produce lower carbon fuels may give US producers a competitive edge globally – see our ESG and Climate piece from Wednesday