Oil and gas companies abandoning costly green energy for high-yield fossil fuel projects
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Green energy is in full retreat. After years of defending itself against climate change concerns, the oil and gas industry is beginning to reassert its dominance. This shift defines the emerging reality of 2025 as global energy trends evolve.
Evidence of this retreat is clear. In the United Kingdom, BP – once committed to increasing its renewable energy capacity 20-fold to 50 gigawatts – recently spun off its offshore wind projects into a joint venture with Japan’s JERA. Similarly, Shell has stopped investing in new wind energy projects. These moves, highlighted in a Dec. 27 editorial by Oilprice.com, illustrate how major oil companies are stepping back from renewable energy commitments.
Over the past year, oil companies have focused on maximizing shareholder returns. Rising borrowing costs in 2024-2025 have forced these firms to shed low-margin renewable energy projects in favour of high-yield oil and gas investments. While this strategy strengthens their financial positions, it deprioritizes climate-focused initiatives at a time when the urgency of addressing global warming has never been greater.
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Adding to this complex energy landscape is Donald Trump’s imminent return to the White House. The president-elect has promised policies that heavily favour the fossil fuel industry. During his campaign, Trump said he would withdraw the United States from the Paris Accord, the international agreement on climate change. His allies have also suggested exiting the UN Framework Convention on Climate Change and abandoning international efforts to combat deforestation.
Trump’s energy policy will be shaped by staunch fossil fuel advocates. North Dakota Governor Doug Burgum is set to become Interior Secretary, while Chris Wright, a Colorado-based fracking CEO, is slated to lead the Department of Energy. Though acknowledging climate change, Wright has downplayed its severity, describing it as a modest and distant threat. Scientists have widely criticized this view, pointing to strong evidence linking climate change to more intense hurricanes, droughts, and floods.
Wright has framed his support for fossil fuels as a moral imperative. In a Dec. 12 article in The New York Times, Wright argued that oil, gas, and coal are essential to improving the lives of the world’s poorest people, who rely on wood, dung, or charcoal for basic needs such as cooking and heating. While this narrative highlights global energy inequality, it sidesteps the environmental consequences of continuing to burn fossil fuels.
Complicating the picture is Elon Musk, CEO of Tesla and a close advisor to Trump. Musk’s support for electric vehicles and renewable energy stands in stark contrast to the incoming administration’s pro-fossil-fuel agenda. It remains unclear how Musk’s influence will affect Trump’s energy policies, but his involvement introduces a layer of unpredictability.
Trump’s energy strategy will also face challenges from growing electricity demand, driven by the rise of artificial intelligence, data centres, and manufacturing facilities. Meeting this demand will require energy from multiple sources, not just fossil fuels. While a Trump administration may not entirely eliminate incentives for renewables, they are likely to take a back seat to oil and gas development.
This shift could have significant consequences for the U.S.’ carbon emissions. According to an analysis by Carbon Brief, a second Trump presidency could result in an additional four billion metric tonnes of carbon dioxide emissions by 2030 compared to what could have been expected under a Biden administration. While emissions under Trump are projected to decline by 28 per cent from their peak, this falls far short of Biden’s 50 per cent reduction target.
The global energy landscape is changing rapidly, and the stakes are high. The choices made by the incoming Trump administration will not only shape domestic energy policy but also influence international efforts to combat climate change.
The future of the planet depends on the decisions made today. Are we on the right path? The answer is far from certain.
Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
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