Transitioning to a new age of energy development will require participants to master an old-age skill: compromise.
Dan Pickering, chief investment officer of Pickering Energy Partners, and Scott Gale, executive director of incubator Halliburton Labs, a unit of Houston-based energy giant Halliburton Inc. (NYSE:HAL), said the two camps of traditional and transitional energy players need to move from their respective corners and find realistic and feasible common ground.
Failure to do so, they said, will make it more difficult to achieve the level of progress needed to support the needs of consumers and business while achieving a low-carbon future that protects the environment from the scourge of climate change.
Pickering and Gale shared their perspectives during a Wednesday afternoon keynote as part of the Evolve: The Next Evolution of Oil & Gas virtual summit presented by Digital Wildcatters and FreightWaves.
Both sides must “go to the middle” if they expect their initiatives to build momentum, Pickering said. The traditional oil and gas companies recognize their industry has reached a crossroads where the future holds only ebbing demand for their products, he said. The newer companies, meanwhile, saw their “cool” energy investments like wind power fail to step up to the plate during the recent deep freeze in Texas that saw all energy sources seize up due to the cold, he added.
Because a transition of this magnitude is likely to take decades rather than years, participants have plenty of time to retrench from any hardened positions and realign their stances in a pragmatic fashion, Gale said. Both rejected the no-compromise approach of environmental activists like Greta Thunberg who believe the world will meet a lethal denouement unless immediate action is taken to halt greenhouse gas emissions.
Thunberg views the issue in almost religious terms and “in religion there’s no room for another viewpoint,” said Pickering. “You can’t get to a lower carbon future immediately. You have to be realistic about how long this takes. We’re going to have to live together for a long period of time.”
It also makes sense for both sides to step back and examine how much progress they’ve actually made in just a few years, Gale said. Extensive conversations are underway to move the world to safer, cleaner energy sources, they said, noting that these discussions wouldn’t be taking place four or five years ago.
An endgame may not be reached until there is consensus on how much disruption is actually necessary and a “point of satisfaction,” Gale said. Unfortunately, it will likely take a string of climate-driven disasters for the average consumer to change their behavior and buying patterns, they said.
Pickering and Gale said they were impressed with the amount of capital being invested in the transitional energy space, saying it represents the private sector’s commitment to building a future that industry, not governments, will need to construct. Not every project will work out, and there will be instances where the first mover fails but those coming up behind it succeed. In any case, Halliburton Labs expects to gain knowledge from each project that will be beneficial in the long run, Gale said.