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Oil Industry Sees Reliance on Fossil Fuels For Years to Come, But Shows Signs of Transition to Renewables

  • Democratic presidential candidate Joe Biden calls for a transition away from fossil fuels, prompting criticism from Republicans and some members of his own party
  • Oil companies show concern but not alarm at position, expecting that oil and gas will be necessary for many years
  • With growth in the renewable sector and an oil slump earlier this year, energy firms are positioning themselves for a shift to green

When Democratic presidential candidate Joe Biden voiced his support for a “transition” away from fossil fuels at the third presidential debate, it prompted swift criticism from the GOP and even caused some Democratic candidates in oil-dependent areas to distance themselves from the comments. The response was more muted in the oil and gas industry, which expects that fossil fuels will be dominant for many years but has also been positioning itself for a long-term pivot to renewable energy.

Biden has set goals for the energy sector in the United States to be carbon-free by 2035 and for the nation to have net zero emissions overall by 2050. He has also said he will end subsidies to fossil fuel companies and end new permits for drilling on federal lands, though he stopped short of calling for a ban on fracking. President Donald Trump has charged that these stances will “destroy” the oil and gas industry.

Executives at these companies have suggested that any transition is likely to be gradual, with sources like natural gas providing a consistent source of power as renewable industries like solar and wind grow. Helima Croft, a noted analyst for the oil industry, says fossil fuels would be “out of favor” in a Biden White House but not completely shunned. Biden has clarified his remarks to say fossil fuels will be around “for a long time” even as renewable energy grows.

Fossil fuel companies, especially those in Europe, have already started to invest more in renewable energy and set goals for reducing their emissions. Alternative energy stocks have surged, and this trend is expected to continue even if Trump is re-elected or a partisan split remains in Congress. Offshore wind has been the favored investment among oil companies moving toward renewables.

Republicans are hoping to use Biden’s comments to leverage their chances in the competitive states of Pennsylvania and Texas. But while these states have strong oil and gas industries, they have also shown signs of a growing green sector. Green energy jobs outnumber petroleum jobs in Pennsylvania, and the wind industry in Texas is growing fast enough that it has been hiring laid-off oil and gas workers.

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