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More oil, gas companies seek greater role in shift to clean energy

An increasing number of oil and gas companies are ramping up efforts to support a global move to clean energy, including investments in renewable technologies.

Member companies of the Oil and Gas Climate Initiative, or OGCI, for instance, are calling for the use of policies and market mechanisms to put a price on carbon and spur technologies to support the transition toward a lower-carbon world. The OGCI is backed by 13 of the largest oil and gas companies in the world, including Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell PLC and BP PLC.

"Recognizing the urgency of responding to the climate challenge, all OGCI member companies support the consideration and introduction by governments of appropriate policies or carbon valuation mechanisms, such as [a] tax, trading systems, incentives or other market-based instruments," the OGCI said in a Sept. 23 statement that coincided with the start of climate week in New York.

The OGCI also said it intends to jump-start additional investments in carbon capture, use and storage to support efforts to achieve climate and energy goals. Companies like Houston-based Occidental Petroleum Corp., one of the first U.S. energy companies to join the OGCI, have touted investments in carbon capture technologies and enhanced oil recovery techniques. Enhanced oil recovery involves using harvested carbon to boost oil production from wells.

One of the biggest and most well-known private equity firms in the U.S. oil and gas sector sees big potential for rapid growth in the renewable energy space and formed a team to invest in lower-carbon energy systems. EnCap Investments LP said Sept. 23 that it established a team of four energy industry experts to pursue opportunities in cleaner energy technologies, including wind, solar and gas power generation backed by battery storage.

"Fossil fuels will continue to play an essential role in meeting global energy demand in the coming decades," EnCap Managing Partner Doug Swanson said in a news release. "However, renewable energy sources are poised for rapid growth."

"Similar to our move into the midstream space 10 years ago, we believe the market dynamics in renewables will present very exciting investment opportunities for our firm," he said.

EnCap's new team consists of Jim Hughes, Tim Rebhorn, Shawn Cumberland and Kellie Metcalf, who have over 110 years of combined experience in the power and renewable sectors, according to the release.

In the midstream sector, Equitrans Midstream Corp. and EQM Midstream Partners LP, which handle the bulk of the nation's largest gas producer's output, resisted the Trump administration's proposed rollback of methane emissions regulations. In doing so, they broke with oil and gas industry trade groups and joined supermajor oil companies such as Exxon, Shell and BP.

On Sept. 25, the midstream companies which gather, process and transport the bulk of EQT Corp.'s more than 4 Bcfe/d of natural gas and NGL production said they oppose the U.S. Environmental Protection Agency's proposed rule that would relax Obama-era methane emissions regulations. The companies said eliminating the methane emissions limits on upstream and midstream operators were "steps backward."

"Our industry has made great strides during the past decade, with the U.S. EPA's April 2019 inventory report showing total methane emissions are down 15.8% since 1990," Equitrans President and COO Diana Charletta said in a statement. "While this is a good start, we cannot and should not be satisfied with this achievement. We must continue to push our industry forward in a meaningful way in order to effectuate real mitigation of climate change impacts."

The American Petroleum Institute and the Independent Petroleum Association of America, two of the leading oil and gas trade groups in the U.S., are in favor of the proposed rule. The Interstate Natural Gas Association of America, the trade group for the largest U.S. gas pipeline companies, has yet to take a position for or against the new rule.