A massive wave of market and societal forces is changing the oil and gas industry. Low commodity prices are driving out weaker players with excessive debt, and forcing those that remain to become leaner and more efficient. As climate change effects worsen and countries move to fulfill their commitments from the Paris climate agreement, public scrutiny of oil and natural gas and their impacts only intensifies.
The question is not will industry change to meet these challenges — it’s how. It’s about what opportunities can propel industry to come back stronger out of the depths of the commodity slide, as a leaner, cleaner industry standing on firm ground that it can play a meaningful role as societies work to transition to lower-carbon economies.
While natural gas remains a fact of life, and switching from coal to natural gas has helped reduce greenhouse gas emissions, scientific research has demonstrated that potent methane emissions from the oil and gas system are undermining that climate benefit. The latest U.S. inventory shows over 9 million metric tons of oil and gas methane emissions, packing the same climate impact over a 20 year timeframe as over 200 coal-fired power plants. That’s a lot of methane no matter how you slice it. Read More
As oil and gas leaders converge on Houston for the year’s largest industry conference, CERA Week, falling oil and gas prices are understandably top of mind and a cause for concern for the industry. But there is another decline story underway in industry, one that poses a risk to the future of hydrocarbons in a carbon constrained world – a story of falling trust.
While today’s $30 oil price is disruptive in the short-term, new information on the very low level of public trust in the oil and gas industry should prompt concern from executives and investors about possible longer-term disruption to companies’ social license to operate.
The Industry’s Public Trust Problem
Recent polling conducted by KRC Research for EDF found that a mere 29 percent of Americans trust oil and gas companies to operate responsibly. Strikingly, even among Republicans, the trust rate is under 40 percent.
Digging deeper into the numbers, just 15 percent of Americans trust the oil and gas industry to be accurate in disclosing how much pollution they cause.
So what do these results mean? Read More
What a difference a year can make. Even before the last weeks tick away, 2015 stands out as a remarkable and dynamic year for climate and energy in the United States.
Read on for five bold trends that are beginning to reshape our economy – and our national discourse on climate change.
1. Investments in renewables soar
I admit it: For years, I thought renewable energy was more hype than reality. I’m happy to report that recent data proves me wrong.
In just five years, solar panel prices have fallen 80 percent, and solar capacity installed worldwide grew more than six-fold. The overall cost of solar per kilowatt-hour, meanwhile, plummeted 50 percent.
For the first time in history, energy from the sun is as cheap as traditional energy in states such as Arizona, California and Texas.
The proof is in the pudding. Apple, for example, recently signed an $848-million power agreement with a solar provider – bypassing the electric grid. A deal of this magnitude shows where solar is today, and where it is headed. Read More
There is often staunch disagreement between industry and policymakers on how to address pollution. But an event last week convening business leaders, federal and state officials and other stakeholders showed that there’s at least one idea on which they can agree and work together: the feasibility of reducing methane emissions from the oil and gas sector.
Here are four perspectives shared at this event that give me hope we can solve the large, but addressable problem of methane pollution from the oil and gas industry if we take a fact-based, collaborative approach. That would be great news in itself, and powerful precedent for tackling the broader climate opportunities ahead.
Environmental regulations are not a zero sum game. Martha Rudolph, director of Environmental Programs at the Colorado Department of Public Health and Environment, was on the front lines when Colorado proposed the nation’s first direct regulation of methane pollution from the oil and gas industry. At the event, she shared her state’s powerful example of unlikely allies coming together to protect climate and communities in a way that makes business sense. Read More
Since the president announced in January a national goal of reducing methane emissions from the oil and gas industry nearly in half by 2025, an outpouring of voices has supported the move. Now, EPA has proposed rules to help meet that target, and we’ve seen another wave of support – everyone from editorial boards in the heart of oil and gas country to massive investors like California’s pension funds has recognized that the rules are a manageable, commonsense means for reducing methane pollution.
The one voice that’s been silent? The companies with the opportunity to adopt the proven, cost-effective technologies and services to not only reduce pollution but also prevent the waste of the very energy resource they’re producing. Now another voice has emerged to make the case directly to these companies that it’s worth constructively engaging in the rulemaking process: the Interfaith Center on Corporate Responsibility (ICCR), a group of shareholders dedicated to promoting environmentally and socially responsible corporate practices. Read More
California public school teachers. Religious charities. New York police officers and firefighters.
What do all of these groups have in common? Investors representing them — who manage $1.5 trillion in retirees, current employees’, and others assets – are standing together and calling for strong rules limiting harmful methane emissions from the oil and gas sector. This level of outpouring – from diversified investors with holdings in the oil and gas industry – represents five times the support investors expressed for methane rules last year. A trend is emerging.
The investors, including the largest retirement funds in California and New York, issued a powerful statement in support of the president’s methane proposal aimed at cutting emissions nearly in half in a decade. A centerpiece is regulation of methane, the primary ingredient in natural gas, which has over 80 times the warming power of carbon dioxide in the first 20 years after it’s released and is responsible for 25 percent of the warming we are feeling today. Read More