President-elect Trump has threatened the European Union with tariffs unless it significantly increases its purchases of American oil and gas, citing a large trade deficit. This threat follows Trump’s first post-election trip abroad, and comes as the EU has strengthened its trade defenses against such coercive practices. The EU is already a major importer of US LNG and crude oil, but Trump’s “America First” approach signals potential significant trade disruptions. His past actions involving tariffs on steel and aluminum demonstrate his willingness to pursue protectionist policies. The EU has vowed a unified response to any aggressive trade actions from the incoming US administration.
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The Biden administration is implementing a new rule that will impose a federal fee on oil and gas companies exceeding specific methane emission levels. This rule, announced at COP29, fulfills a congressional directive within the 2022 climate law and aims to reduce one of the most potent greenhouse gases. The fee, expected to begin at $900 per ton in 2024 and increase to $1,500 per ton by 2026, aims to incentivize the adoption of emission-reducing technologies and reduce methane emissions by 1.2 million metric tons by 2035, equivalent to removing eight million cars from the road for a year. While industry groups are expected to oppose the rule, environmental organizations support it, advocating for the oil and gas sector to be held accountable for its contributions to climate change.
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Our conference aims to address the climate crisis and transition away from hydrocarbons in a just and equitable manner, welcoming solutions from all stakeholders, including the oil and gas industry. While we are open to investments in green transitioning projects, we also see opportunities in Azerbaijan’s plans to increase gas production, including new pipeline infrastructure. This includes potential joint ventures and the role of natural gas as a transitional fuel, recognizing that some oil and gas production may continue beyond 2050. However, we emphasize that developing new oil and gas fields is incompatible with limiting warming to 1.5°C, a point that aligns with the global agreement to transition away from fossil fuels.
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John Q. Hosedrinker