BP praises Biden climate bill while expanding US shale business

BP’s US chief said Washington’s new climate bill would put its green plans “on steroids” in the US, even as the oil supermajor says he will expand his shale oil and gas businesses in the country.

Dave Lawler, BP’s head of US operations, said in an interview with the Financial Times that the British oil producer is “very supportive” of the IRA and what the Biden government wanted to achieve on issuance, referring to thereby on the recently passed inflation reduction law.

The new climate bill, passed by Congressional Democrats in August, aims to pour hundreds of billions of dollars into green projects like wind and solar, hydrogen, biofuels, and carbon capture and storage, and has drawn the ire of some in the oil sector attracted.

BP has been one of the most aggressive of the oil majors in its promise to shift spending from fossil fuels to emissions-reduction projects, and said it plans to reduce its oil production by 40 percent by 2030 compared to 2020 levels.

“We had our new strategy in place before the IRA was passed, so we just put our strategy on steroids,” he said.

BP last month acquired Texas-based Archaea, which produces so-called renewable natural gas from landfill, for $4.1 billion, its largest low-carbon acquisition to date.

Lawler said that new incentives for carbon capture and storage in particular are “interesting” and that they would allow BP to work with industrial players to capture carbon dioxide at petrochemical or other plants before it is emitted into the atmosphere and stored permanently in the ground becomes.

The new climate law provides a US$85 per tonne subsidy for permanently stored carbon dioxide, making many more CCS projects economically viable as the sector struggles to get off the ground.

“We can make a profit and they can clean up their business,” Lawler said of the potential new CCS deals, adding that the company is moving forward with initial work on a project on the Texas Gulf Coast with chemicals maker Linde for capture and storage of emissions a hydrogen plant.

However, Lawler said the company remains committed to growing its US oil and gas business, particularly its operations in the Permian Basin, a vast oil field in west Texas and New Mexico where the company has large land holdings tens of which are under development billions of dollars will require .

“We will increase production. . . We see this as an important advantage, the wells are very strong,” Lawler said, adding that there are enough drilling opportunities in the Permian to “keep you busy for 40 years.”

The company plans to increase spending on its US onshore oil and gas business, primarily in Texas, from $1.7 billion this year to $2.4 billion next year. It pumps about 350,000 barrels of oil equivalent daily from its onshore fields in the US, about 8 percent more than a year ago.

BP and other oil producers have come under fire from environmental activists for not acting quickly enough to cut fossil fuel production in the face of the threat of climate change.

Still, US President Joe Biden has urged oil producers to increase production to curb high fuel prices this year, while tightening environmental regulations, including new rules and fines for oilfield emissions of methane, a potent greenhouse gas.

Lawler said BP is “very supportive” of the new methane regulations that have divided the industry and it “[does not] have no concerns” that it will have to pay fines under new rules that penalize companies that exceed minimum methane pollution levels.

A study by the Environmental Defense Fund last year found that BP’s Permian assets were among the worst in measurements taken between September 2019 and October 2021, higher than other supermajors in the region like ExxonMobil and Chevron.

Lawler said the company spent about $500 million cleaning up its Permian wells and will eventually spend more than $1.3 billion to electrify its operations and install new processing infrastructure to “cut emissions drastically.” reduce” and end gas flaring at its sites. He pointed to recent data from Kairos Aerospace, which uses satellites to measure methane emissions, showing that BP’s emissions have recently fallen well below industry averages in previous years, when they were significantly higher.

“We totally agree that the [methane] Emissions have to stop, flaring has to stop,” Lawler added.

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