Practical Environmentalism Is Inevitable

These are your partners for The Moment.

As of November 21^st, 2024, we’ve transitioned from the @energythinks Substack account to the @tishaschuller Substack account. If you’re a subscriber, please note that all future editions will come from this new account.

I’m writing my next book about The Moment—a time when forces will lay bare the challenges of the energy transition. These posts explore why you, the oil and gas leader, are approaching a once-in-a-generation opportunity to lead.

Global decarbonization is not inevitable, to say the least. Smart and even devoted climate hawks—especially those in government and business—are beginning to come to grips with this realization. What does it mean for us in oil and gas?

For those climate advocates still stuck in all-or-nothing thinking, the solution set is still sharply limited (e.g., 100 percent renewables, or no oil and gas companies at the table). But those climate activists who now sense The Moment coming and are serious and brave enough to question the inevitability of decarbonization are suddenly seeing a dramatically expanded array of pragmatic responses, driven by the need to get some progress on decarbonization rather than none at all. Actions now on the table for these leaders range from incremental solutions (reduce some emissions!) to massive investment in adaptation (protect the most vulnerable!).

Today, I look at why the forces shaping The Moment will create a new set of potential partners (in these newly practical environmentalists) for forward-thinking oil and gas companies. In a recent BT (“Is Power Demand a Force? Or a Directional Driver?”) I asked this question: What will happen to status quo oil and gas companies that see The Moment as an opportunity to keep on keeping on? Below, I delve into a central directional driver of continued decarbonization: the inevitable rise of practical environmentalism. You will need to start preparations today for the new suite of opportunities practical environmentalism will offer us.

Both of these things are true:

• It is not a foregone conclusion that global decarbonization will happen.

• The energy transition is still offering myriad opportunities for oil and gas to lead in the direction of a lower-carbon future—and ignoring those opportunities limits your strategic options.

The situation

Have we reached peak climate activism? I don’t think so. But we may have reached peak all-or-nothing climate activism, simply because the solution set entrenched activists will accept is too small, too slow, and too exclusive.

Serious climate hawks know that we need massive transformation of an energy system that—to date—has only added demand and not meaningfully replaced any energy sources. Former New York Times journalist Andy Revkin calls this situation the “energy addition,” describing wind and solar frosting on a fossil fuel cake.

What might take the place of all-or-nothing climate activism? After all, actually transforming the energy system while adding massive amounts of energy is a staggering task. The McKinsey Global Institute, in its 2024 report The Hard Stuff: Navigating the Physical Realities of the Energy Transition, identifies 25 interdependent factors that will have to be addressed for the energy transition to advance beyond its current early stage. This work is not for the faint of heart: The challenges layer and intertwine, are limited by technology requirements big and small, and must be addressed at a daunting physical scale.

Which raises a big question: Will voters (and consumers) even want to do all this? As a taste of their forthcoming study of U.S. public narratives and voter attitudes on energy and climate, Roger Pielke Jr. and Ruy Teixiera recently published some preliminary findings that presage the rise of practical environmentalism:

• Voters like “all of the above” energy among three choices (rapid transition to green energy, “all of the above,” and emphasizing fossil fuels);

• Even Democrats have only about one-third support from their self-identified voters for a rapid green-energy transition;

• Only 26 percent of surveyed voters would support even a $20 monthly addition to their energy bill to fight climate change;

• Two-thirds think an energy transition away from fossil fuels is likely to lead to unexpected problems;

• Cost and reliability of energy are really important to the majority of those surveyed; and

• Getting to net zero as quickly as possible is relatively unimportant to surveyed voters.

In short, U.S. voters are—on balance—practical environmentalists. And the rise of practical environmentalism will inevitably follow as the forces driving The Moment become more obvious.

Nuclear models the future of decarbonization

The climate movement is about to split into pragmatists and purists—and the pragmatists will want a bigger tent. Real partners. Solutions at scale. Progress over perfection.

Need an example? Just look to the environmental outcasts who supported nuclear power over the past 10 years who are hailed as prescient heroes today. As I covered in “Is Power Demand a Force? Or a Directional Driver?”, citizens will not settle for a black-and-white world. The choice is not “coal forever” versus “stunt economic development.” Real leaders are looking around and saying, “Find me new imperfect solutions.”

Indeed, nuclear provides a model for the narrative I’m talking about; the lightning-fast move to support and promote it has been stunning. (See Robinson Meyer’s “The Democratic Party Is Pro-Nuclear—and Ready to Talk About It” for a good overview.) I believe this transition foreshadows future moves for low- and no-carbon molecules.

Why? At the most superficial level, nuclear cannot get permitted and built fast enough to meet projected power demand. And I don’t expect the world to give a blank-emissions-check to natural-gas-fired power generation—do you? That means you should be positioning your company for the inevitable rise of climate pragmatism.

One thing to do now: Start building relationships with potential partners

Companies can participate in legislative negotiations, contentious rulemaking, and voluntary initiatives only with a credible set of partners. Who are those partners? Often, environmental organizations, academics, and think tanks that key stakeholders and policymakers trust. And it’s these groups and figures I expect to see leading the first wave of environmental pragmatism. Start reaching out to them to initiate dialogue if you don’t already have relationships. But don’t expect wholesale support for your engagement—or even credit for your accomplishments and energy leadership. This is a long game, and as you build their trust, they will test your authenticity. Embrace those tests.

Now what?

Adamantine has updated our offerings and is taking on limited (two!) February engagements to conduct diagnostics on the opportunities and risks of The Moment.

• Reach out to learn more.

• Know an industry leader who could benefit from these insights? Please forward this email to them!

• Are you a practical environmentalist at heart? Hit that heart button below.

All in,

Tisha