Jim Mulva, chief executive of ConocoPhillips, has been in a hurry to establish his legacy. In the beginning, it was going to be as the head of one of the world’s biggest international oil and gas companies. And he got there, boosting Conoco into 5th place, in terms of production.
But then the economic downturn hit, and the weaknesses in his grow-through-acquisition strategy were exposed. It was no longer enough to be big, and Conoco was forced to slash capital spending, lay off staff and sell billions of dollars in assets.
Controversy about importing fuel from Canada’s vast oil sands has been swirling for some time. It is an issue environmentalists seized on with great hope when President Barack Obama came into office, given his pledges to work to reduce the country’s carbon footprint and the fact that oil from tar sands, as environmentalists refer to it, has a higher carbon intensity than that from traditional crude.
But the weakness in the US economy, high unemployment and rising petrol prices have combined to give the oil industry the edge. Indeed, even back in 2009, the Obama administration approved a pipeline to carry oil-sands fuel from Canada into the US, saying its action was designed to send “a positive economic signal in a difficult economic period”. The Keystone pipeline also was approved.
After my earlier pessimistic post (at least it was for green campaigners and those in low-carbon energy production) on the hopes of setting a high and stable carbon price, there is a very different message in a report from The Climate Institute in Australia.
It claims that the UK leads the field in incentivising low-carbon technologies, and that the government’s policies have led to an implied carbon price of $28 per tonne.
If so, that is higher than the €15 a tonne at which carbon is currently trading, but nowhere near the €80 and €90 the industry says is needed.
I won’t repeat the report in full, but this graphic is very interesting: