American Oil and Gas Reporter - June 2022 - 27

CCS A Chance To Help
Foster Vital Energy Security
All Across The Globe
The world is in the early innings of an unprecedented,
self-induced, energy crises. Today's energy shortages have
much of their roots in anti-fossil-fuel policies from governments
and financial system participants, including major
pension funds, university endowments and banks that have
committed to ending fossil fuel investment as part of net
zero greenhouse gas commitments and environmental, social
and governance considerations.
Although addressing climate change requires reducing
GHGs over time, a self-induced global energy crisis today is
not an acceptable approach to preventing a climate catastrophe
in the future.
Prominent voices in the environmental movement have positioned
the renewables industry, with support from academia
and many nongovernmental organizations, as the only acceptable
energy solution. The binary characterization often voiced by
certain government officials and investors, in which oil and gas
are bad while wind and solar are good, is a false choice. Renewables
cannot replace fossil fuels, in part because many
components of renewable energy are made from fossil fuels.
We confront a fundamental decision. Will we consume ourselves
in false energy choices made suicidal by the realities of
an interdependent global energy and food system? Or will we
acknowledge the extent to which our energy and food systems
are interdependent and shape cooperative solutions?
Reducing the supply of energy inevitably will create war,
famine and chaos. The laws of thermodynamics are clear:
Maintaining order requires the expenditure of energy.
Those advocating for reducing investment into fossil fuels to
advance climate action cannot imagine or comprehend that
war, famine and chaos necessarily follow. When it comes to
energy, what people think they want and what people actually
get is typically a life-or-death issue.
Russia's invasion of Ukraine has been aided and abetted by
those in government and in the financial system practicing and
demanding moratoria on oil and gas investment and by those
who also have advocated for nuclear shutdowns. Putin is funding
his war effort through exports of energy, which globally is in
short supply, and he is finding willing customers among energy-hungry
nations such as China and India.
The oil and gas industry has responded rationally to clear
signals associated with the lackluster commodity prices of
2014-2020, anti-energy government policies and the financial
system's commitment to net zero: Companies have slashed new
project development. Amid higher commodity prices, the oil
and gas industry is returning capital through debt repayment,
share buybacks and dividends, instead of reinvesting into projects
with long lead times.
The world is rushing headlong into an energy brick wall, as
spare capacity for nearly all energy products is almost zero and
inventories of oil, natural gas, coal and fertilizer are being
rapidly drawn down.
The oil and gas industry must work as partners with government,
the financial system and even the environmental movement,
notwithstanding that many of these stakeholders seek to eliminate
our industry. One major reason for such a partnership is because
carbon capture and storage provides a viable means to reconcile
energy demands with the need to reduce emissions.
CCS is a critical technology solution that can buttress ESG
and fossil fuels and provide long-term certainty for the oil and
gas industry because it will allow us to actively and directly
address societies' demand for lower-emission energy.
CCS is economically viable when governments place a value
on avoided emissions. By supporting carbon prices, the oil and
gas industry can work with government to set the stage for increased
energy development and lower emissions.
The United States must pursue a massive revaluation of the
45Q tax credit to appropriately value avoided emissions and acknowledge
that our self-imposed energy polices have contributed
to a level of inflation that has eroded the existing tax credit's value.
With a defined and measurable solution to GHG emissions, CCS
can unlock capital investment in domestic energy production by
assuring long-term investors that energy projects are sustainable
Critics of CCS claim the technology will prolong the fossil
fuel age. Ironically, CCS is one technology that may ensure the
world will have sufficient fossil fuel supply to avoid an energy
calamity and the consequent unimaginable suffering for billions
of people.
Financial system participants such as major pension funds,
university endowments and banks with net zero commitments,
can invest in fossil energy development by making a similar
commitment to CCS.
The United States and Canada are uniquely positioned to
drive energy development, combined with CCS, to supply lowemission
energy products including power, hydrogen, liquefied
natural gas, enhanced oil recovery and ammonia fertilizer.
Nations that control affordable, clean energy win the prize.
Those that falter will fall by the wayside, continue to get
hijacked by rogue actors and feel the wrath of their own citizens
that are being squeezed at every possible angle.
❒
CRAIG GOLINOWSKI is the
president and managing partner
at Carbon Infrastructure
Partners. He has 18 years of
experience in the financial and
oil and gas industry and has
been active in private equity
fund management since 2007.
Before joining Carbon Infrastructure
Partners, Golinowski
worked as an investment banker
with RBC Capital Markets, where he focused on
equity finance and mergers and acquisitions for
domestic and international oil and gas, oil sands
and energy service companies.
JUNE 2022 27
American Oil and Gas Reporter - June 2022

Table of Contents for the Digital Edition of American Oil and Gas Reporter - June 2022
