By Steve HollandIn the wake of President Donald Trump’s withdrawal of the U.S. from the Paris climate accord, oil companies are seeking to retain their profits and continue operating at a profit.
The International Energy Agency (IEA) estimated last year that oil and gas extraction in the United States accounted for about a third of the country’s overall GDP and $4.5 trillion in U.N. aid, while China, Russia, India, and Brazil account for about half.
Trump’s decision to pull the U to the sidelines of the Paris agreement is likely to boost the fortunes of the companies, but some are also questioning the wisdom of such a dramatic step.
“Oil and gas companies should have a stake in maintaining the current state of play and keeping the profits for the oil and natural gas industry on a sustainable path, and they should be able to do that through the use of the world’s most efficient and cost-effective technologies,” the IEA said in its 2015 World Energy Outlook report.
“A lot of the oil companies have done a very good job of meeting that challenge.”
Oil companies have been lobbying for a long time to keep their profits on a stable footing.
They argue that the Paris deal will boost the global economy by increasing supply and slowing the climate change effects.
The IEA has said that the deal, which was hammered out in 2015 by 195 nations, will boost demand and help reduce global greenhouse gas emissions.
“The Paris Agreement provides an effective way for governments to support the development of advanced energy technologies that can help reduce climate change, and it will help increase economic growth,” the report stated.
“These benefits will not only support the global economies, but will also provide a path for the rapid deployment of new and improved energy-efficient technologies, as well as increase the share of the global energy supply that can be delivered by these technologies.”
The IEP report also noted that oil companies’ profits were likely to rise as demand for energy grows.