Tag: Rigzone

Sorry, Rigzone and Telegraph, Oil and Gas Companies Are Wise to Reject Net Zero and Renewables

Rigzone and The Telegraph, among other outlets, are reporting that many major energy companies are tempering net-zero pledges they made in recent years, turning away from renewables and back towards oil and gas. This move makes sense, as subsidies that wind and solar depend on may dry up, and traditional sources outcompete them.

From ClimateRealism

By Linnea Lueken

Rigzone and The Telegraph, among other outlets, are reporting that many major energy companies are tempering net-zero pledges they made in recent years, turning away from renewables and back towards oil and gas. This move makes sense, as subsidies that wind and solar depend on may dry up, and traditional sources outcompete them.

The Rigzone post, “Leading Energy Companies Holding Back Renewables Commitments, BMI Says,” reports that the Fitch Group, a financial information company, says that companies like BP, Shell, and others, are “holding back renewables commitments to secure higher short-term return.”

Most notably, Fitch told the outlet that Equinor “halved its low carbon investment from $10 billion to $5 billion,” BP “abandoned its 2030 oil output reduction target and is divesting its U.S. onshore wind business,” and even Shell “weakened its carbon reduction targets and is investing in Bonga North deep-water oil and gas project in Nigeria.”

The reason? Rigzone reports that high costs for renewables projects, supply chain disruptions, and the need for energy security all factored in, according to the Fitch analysts.

Reporting from the Telegraph in “We were wrong on net zero, BP boss admits,” suggests that pressure from a hedge fund Elliott Management incentivized BP to abandon their focus on net-zero, because “the company’s shares are underperforming partly because it has wasted too much money on renewables.”

All of this is unsurprising, especially given that many subsidies for wind and solar may soon dry up with the new Trump administration, these companies may be seeing the writing on the wall.

Wind companies in particular have struggled even with large government subsidies backing renewable investment. For example, Dominion Energy’s Coastal Virginia Offshore Wind project cost $2 billion more than promised when the development first was proposed by 2021, and today only half completed has again re-evaluated the costs up another billion dollars. These costs are being passed onto consumers.

Approximately 46 percent of all federal government subsidies went to wind and solar between 2016 and 2022. President Trump has already paused offshore wind lease sales and paused approvals for onshore wind. Likewise, the new EPA Administrator Lee Zeldin is working to “claw back” billions from the Greenhouse Gas Reduction Fund, which threw money at various renewables projects and green organizations.

Oil companies certainly received money from these subsidies and funds for their renewable’s projects and pledges, and if that cash flow ends, it would be difficult for them to maintain the grift.

Both Rigzone and The Telegraph imply that these divestments from renewables are a bad thing, however, The Telegraph notes the forced “rapid energy transition” is far has been causing more harm than benefits and threatens energy security and reliability.

As Climate Realism has covered for foreign countries, the United States, and all the way down to individual states, energy security is at risk when the so-called “energy transition” is pursued. The premature closure of reliable energy sources like coal, nuclear, and natural gas, have had grid operators and even individuals from federal commissions sounding the alarm; renewables just cannot fill the gap. Add to that the fact that there is no transition occurring at a global scale: electricity production data show that while wind, biofuels, and solar are being added to the overall mix, traditional sources of energy are still growing as energy consumption in general increases. (See figure below)

Despite Rigzone’s and The Telegraph’s apparent dismay that major oil companies are back-tracking on their net-zero goals and investments in renewables, for consumers and energy security the move is a boon. Reliable, affordable energy benefits people and nations. While reports of these companies’ actions are upsetting climate activists, hopefully it will signal to other firms and industries that it is safe to divest from climate alarm.

No, Rigzone, Extreme Weather Is Not Becoming Increasingly Dangerous for Oil and Gas Companies

A recent article at Rigzone, “How Dangerous Is Extreme Weather for Oil and Gas Companies In 2024?” repeats the claim that extreme weather events like hurricanes are becoming worse, and therefore pose a major risk to oil and gas operations especially in the Gulf of Mexico. Offshore oil operations are threatened by hurricanes, but this is not new, it poses a threat every hurricane season

From ClimateRealism

By Linnea Lueken

Offshore production platform, 2019, taken by Linnea Lueken

A recent article at Rigzone, “How Dangerous Is Extreme Weather for Oil and Gas Companies In 2024?” repeats the claim that extreme weather events like hurricanes are becoming worse, and therefore pose a major risk to oil and gas operations especially in the Gulf of Mexico. Offshore oil operations are threatened by hurricanes, but this is not new, it poses a threat every hurricane season. As a result, operators should work on improving weather prediction technologies and response plans, to reduce the risk. This is true regardless of climate change, because hurricanes have not, in fact, become more frequent or severe.

The Rigzone article consist primarily of interviews with a few oilfield “experts,” particularly an economist named Frederick J. Lawrence, who first makes the obvious statement that extreme weather can be a risk factor for oil and gas, and that “preparation and faster response will always be needed in addition to improved standards and resilience.”

Lawrence is the one who makes the claim later in the article that “increased preparations for extreme weather events will remain a top priority given what appears to be an increased frequency and intensity of events according to groups that track weather-related incidents[.]”

Others interviewed, like Alex Stevens from the Institute for Energy Research, sensibly said that “hurricanes have always posed risks to oil and gas companies due to their potential impact on supply chain logistics, infrastructure, and extraction demands.”

“Always” is correct, and in fact there is no evidence that hurricanes or other kinds of extreme weather that impact oil and gas operations are becoming, as Lawrence said, more frequent or intense.

Taking hurricanes as the clearest example, since they pose the most direct and obvious threat yearly to oil and gas operations in the Gulf of Mexico, we can see from available historical data that they are not becoming worse regardless of what “groups that track weather-related incidents” say.

My suspicion is that these “groups” being referred to are those like the World Weather Attribution, which make their living attributing various weather events to climate change. Theirs is an untrustworthy methodology for finding the truth about weather events, because they begin with the assumption that extreme weather events are caused or influenced by climate change, then work backwards to make their models fit and determine the degree to which climate change impacted it. We’ve covered this bad science several times at Climate Realism, like with the flooding in Dubai this past spring, wildfires in Canada last year, and other weather events that made the news.

Hurricanes have not been getting more severe or frequent- not in the Gulf of Mexico, and not worldwide, as Climate Realism has pointed out repeatedly in the past, here, here, and here, for example, and as has definitively established by data cited in Climate at a Glance: Hurricanes and Climate at a Glance: Global Tropical Cyclones.

The most recent global hurricane count, graphed in the figure below by Dr. Ryan Maue, show no increasing trend since the 1980s. If anything, hurricane counts appear to be slightly declining over that period. (See figure below)

The measurement of the overall energy contained in hurricanes and tropical storms has likewise not displayed an increasing trend since records begin in the 1970s. There is significant annual variability, but no clear trend overall. (See figure below)

It is simply not true that hurricanes that threaten oil and gas operations are becoming more frequent or extreme.

Similarly, extreme heat, which is another weather condition that can threaten oilfield work especially in hot and arid regions like the American Southwest, is not becoming more intense either, as discussed in Climate At A Glance: U.S. Heatwaves.

Extreme cold, which is more dangerous to life, is also not becoming more likely.

That is not to say that it is not a good idea to continue to improve oilfield weather resilience and invest in better weather forecasting and storm tracking technology. But this is a good idea regardless of a trend in any direction when it comes to severe weather, because if one thing is absolutely certain it is that extreme weather will strike eventually and it will cause disruptions for operations.

While thankfully no one suggested in the particular Rigzone article that ceasing the use of fossil fuels is how you can prevent extreme weather, it is not helpful to spread falsehoods about trends in weather extremes.