As leading experts on climate change, we often get asked if there’s hope for the planet — but it may surprise people that we find more cause for optimism than despair.
Overall, oil companies are withdrawing investment from exploration and new drilling. It seems oil companies are not drilling new but riding out on the investment they’ve already made plus utilizing market power to squeeze out profits. In terms of Biden’s political calculus, it seems that they think new drilling leases don’t involve much risk of increased oil coming onto the market, but it does improve his position among voters, especially in an era of inflation. Plus, this gave him political capital to pass the IRA, especially with Manchin.
Overall, oil companies are withdrawing investment from exploration and new drilling. It seems oil companies are not drilling new but riding out on the investment they’ve already made plus utilizing market power to squeeze out profits. In terms of Biden’s political calculus, it seems that they think new drilling leases don’t involve much risk of increased oil coming onto the market, but it does improve his position among voters, especially in an era of inflation. Plus, this gave him political capital to pass the IRA, especially with Manchin.
This video goes more into detail of the economics behind this trend: https://www.youtube.com/watch?v=AQbmpecxS2w
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No, but it does change the implication. If leasing doesn’t lead to drilling, then it’s a pretty negligible concern
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