One of Donald Trump's priorities when he returns to the Oval Office in January is to pull the United States out of the Paris climate accord. The move is welcome news for those opposed to decarbonization policies that undermine freedom, prosperity and mobility. Given that oil is the biggest culprit in the global climate change cult, you might expect big oil companies to support America's withdrawal from the deal. Apparently not.
Immediately after President Trump's intentions regarding the Paris Agreement became clear, major oil companies expressed opposition to the president's decision. Instead, they support continuing down the path of strict regulation and government subsidies for their industry, in line with the priorities of the global climate community. According to reports fox news“Big oil companies are calling on President-elect Donald Trump to remain in the Paris climate accord after the U.S. withdrew from it during his first term.”
It's disheartening to watch a once-iconic American oil company transform into a post-capitalist corporation that relies heavily on government funding for revenue.
Why would a company whose primary business is extracting and selling oil join forces with an unelected group that is openly hostile to oil and pledges to achieve “net zero” production within a generation?
Unfortunately, this approach is a betrayal of those who have long championed Big Oil as a pillar of capitalism. The actions of major oil companies now appear to be in direct contradiction to free market principles.
By supporting government-mandated climate change compliance, big oil companies can eliminate competition from smaller companies in the short term and strengthen their market advantage. In the longer term, the aim is to secure government grants and subsidies for carbon-related initiatives and position them as an important source of income.
ExxonMobil has made clear that it views governments as its biggest future customer, carbon-related initiatives as its flagship product and government funding as its main source of revenue. In the short term, the company is using government powers under the Paris climate agreement to eliminate competition from independent oil producers.
of Wall Street Journal coverage ExxonMobil CEO Darren Woods says he opposes Donald Trump's plan to withdraw from the climate change agreement. According to the article, Woods opposes the withdrawal, citing ExxonMobil's increased outreach to government officials and advocacy for “global carbon accounting measures.”
The details of “global carbon accounting” remain unclear, but it appears to be a far cry from real-world, generally accepted accounting principles. It's reasonable to assume that the initiative involves government officials distributing taxpayer funds to favored groups, and Woods clearly intends for ExxonMobil to participate. It is a group.
The WSJ article goes on to say that ExxonMobil and other major oil companies are lobbying incoming Republican leadership to preserve tax credits included in Joe Biden's “signature climate law,” the Cut Inflation Act. He said that These credits reward technologies such as carbon capture that companies are investing heavily in.
The IRA is a boon for Big Oil's carbon-related projects. At the energy conference last March, Woods also expressed support “I was very supportive of the IRA – I’m very supportive of the IRA…” he said in favor of the bill.
Simply put, ExxonMobil wants more taxpayer money and federal tax credits to fund its carbon reduction efforts. Small independent miners in West Texas, on the other hand, should be considered excluded from these taxpayer subsidies. ExxonMobil, by contrast, is relying on taxpayer subsidies as its main source of revenue.
The Guardian newspaper in August highlighted this situation. ExxonMobil has changed direction. The company's business strategy relies heavily on government subsidies for carbon capture and storage operations. The company launched a low-carbon solutions division in 2021 and began lobbying for direct government funding. Through the Inflation Control Act, ExxonMobil secured a subsidy of $85 per ton of carbon captured. Dan Ammann, head of low carbon solutions, said the carbon capture business could eventually become “bigger than ExxonMobil's base business.”
It's disheartening to watch a once-iconic American oil company transform into a post-capitalist corporation that relies heavily on government funding for revenue.
President Trump's selection of Chris Wright as Secretary of Energy offers a glimmer of hope for the American oil industry.
In the oil region, Wright's appointment was greeted with much jubilation. As founder and CEO of Liberty Energy, Wright understands the challenges facing independent oil producers. Unlike executives at major oil companies who apologize on behalf of the industry and align themselves with climate change activists, Mr. Wright unapologetically defends the oil sector. He has been described as a “dedicated humanitarian on a mission to improve human life by expanding access to abundant, affordable and reliable energy.” Wright is respected across the industry.
But Mr. Wright's fight to protect American oil involves more than just a fight against leftists advocating net-zero policies. He will also face opposition from big oil executives who have aligned themselves with radical climate change policies that give control of oil operations to the government while stifling independent producers. He needs all the help he can get.
