The current global energy crisis is driving private-equity firms to highlight the critical role of oil and natural gas in the transition to renewable energies. As investors move from fossil fuels to “green energy,” the dangers of weakening U.S. production capability are becoming increasingly clear.
Wil VanLoh, chief executive of Houston-based Quantum Energy Partners, noted that a complete energy turnover has never occurred, as new sources of energy have been added gradually over time. Referring to coal, oil, and natural gas, “It’s kind of make-believe to think that we can actually replace three forms of energy this time,” VanLoh said.
Pressured by environmental activists and some stakeholders, many institutional investors are divesting fossil fuel assets and organizations. Private-equity executives are concerned about investor misperceptions about the role of fossil fuels in the over-the-horizon transition to renewables as investment is rushing to green energy. The energy transition will not be immediate, and many oil and gas will have a role to play for years to come. Domestic oil and gas companies are reducing carbon emissions and methane intensity at a rapid rate and are also primed to lead the way in green projects such as carbon capture, storage, and utilization (CCUS) and offshore wind projects.
Some private equity firms, such as Kimmeridge Energy Management, are encouraging the oil and gas industry to create its own net-zero plan. “We don’t have an oil-and-gas problem. We have a carbon-emissions problem,” said Ben Dell, a Kimmeridge Managing Partner.
Maintaining production and energy security while investing in emissions mitigation and CCUS to make American energy cleaner and greener is the best option to fill transitional energy gaps and meet long-term climate goals.
Oct 25, 2023
Industry experts have released a report and online tool to help operators decide which methane emission detection tool is most appropriate for their needs. Having the right tool for detecting and quantifying emissions is a crucial first step to reducing methane and meeting climate targets....
Oct 27, 2021
With 3 million abandoned wells across the United States (2 million are still unplugged, according to the EPA), some states are creating programs to reduce greenhouse gas emissions. Capping abandoned wells, which emit millions of metric tons of methane, can cut these emissions by 99%. But federal funding is critical to addressing the issue....
May 11, 2023
In January 2023 Secretary of the Interior Deb Haaland established an Orphaned Wells Program Office with funds from the Bipartisan Infrastructure Law (BIL) to invest in orphan well cleanup to reduce methane emissions while supporting employment and economic growth....