US Energy Secretary Chris Wright called on the world to more than double oil production on Thursday, while simultaneously criticising the European Union and California for what he termed a wasteful focus on inefficient green energy.
While the World Economic Forum (WEF) has increasingly focused its energy discussions on advancing lower-carbon policies, a conversation in Davos between Wright and Occidental CEO Vicki Hollub on Thursday brought a dose of realism to the forefront, according to a Reuters report.
They underscored a crucial point: despite global efforts to transition to renewable sources, the world’s energy needs will continue to rely significantly on oil for several decades.
US energy secretary on green energy and transatlantic trade
This perspective suggests that any viable long-term energy strategy must accommodate this continued dependency while simultaneously promoting and scaling up clean energy initiatives.
Wright expressed concern that the EU’s corporate environmental regulations could jeopardise energy collaboration between the EU and the US.
Specifically, he cautioned that these regulations might negatively impact the flow of US gas imports into Europe.
This suggests a potential conflict between the EU’s environmental policy objectives and the need for sustained energy security through transatlantic cooperation.
Wright’s remarks highlight a critical area of tension where regulatory frameworks designed to promote sustainability could inadvertently create barriers to international energy trade and cooperation with key partners like the US.
The full implications for the transatlantic energy market remain to be seen.
“These regulations could threaten you (US producers) liability-wise to send gas to Europe,” Wright was quoted as saying in the report.
We’re working with our colleagues here in Europe to remove those barriers.
EU’s evolving corporate environmental framework
The EU has introduced significant legislation mandating that companies importing oil and gas into the continent must actively monitor and report the methane emissions linked to those imports.
This regulation is a direct attempt to tackle the climate crisis by curbing the release of methane, a potent greenhouse gas with a far greater short-term warming effect than carbon dioxide.
By making reporting mandatory, the EU aims to increase transparency and pressure international fossil fuel suppliers to adopt better practices and invest in technologies to reduce methane leakage throughout their supply chains before the product reaches Europe.
This move establishes a key climate requirement for market access.
The EU recently made the significant decision to sharply scale back two of its key legislative initiatives aimed at promoting corporate responsibility: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
This move came in December after months of intense pressure and lobbying from various companies and governments across the continent.
The CSRD was intended to standardise and expand sustainability reporting requirements for a large number of EU and non-EU companies, ensuring transparency on environmental and social impacts.
The CSDDD aimed to hold companies accountable for human rights and environmental harms across their entire value chains.
The decision to scale back these flagship laws reflects a challenging political environment, balancing ambitious sustainability goals with concerns over the administrative burden and competitiveness of European businesses.
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