A Matter of Trust - Assessing the Energy Industry's Carbon-Related Initiatives

In case you hadn’t noticed, there’s a big push by the government, industry, and the broader public to reduce greenhouse gas (GHG) emissions and to offset those that do occur. Given its carbon-intensive nature, the oil and gas sector is at the heart of this activity, with almost daily announcements about carbon-neutral LNG shipments, carbon-dioxide capture and sequestration projects, and other efforts. The problem is, it can be difficult sometimes to figure out what’s real and what’s not — that is, which efforts have an actual, measurable impact and which are sort of vague or fuzzy and need to be sussed out. Today, we discuss the latest round of announcements by producers, midstreamers, refiners, and others to “green up” their operations and products.

Back in the mid-1970s, Hall of Fame catcher Yogi Berra was the manager of the New York Mets and America was in the midst of a streaking fad. (Stay with us on this.) Well, there was a rain delay during a Mets spring training game in Florida and, to help pass the time, two streakers climbed over the outfield fence and sprinted across the wet grass, ending their run with belly-flops onto the tarp-covered infield. The crowd went wild; the streakers were peacefully arrested. During his nightly phone call with his wife Carmen, who was back at the Berras’ home in New Jersey, Yogi mentioned the incident, and she asked, “Were they male or female streakers?” Yogi thought a moment and answered, “I’m not sure. They had bags over their heads.”

Which brings us to the spate of announcements by energy companies over the past few months (many of which we’ve blogged about) on the steps they’re taking to reduce or offset their GHG emissions and produce what’s referred to as either “carbon-neutral” or “net-zero” hydrocarbons. (No, really, there’s a connection here.) There have been plans put forward to electrify some upstream operations or to run compressors and equipment on wind or solar power. To reduce venting and flaring. To better detect and plug leaks in pipelines. To capture CO2 from plant operations and permanently store it deep underground. To use carbon offsets to counterbalance the GHG emissions they or their products generate. And there are certainly other efforts not enumerated here. The point is, if you focus only on the “bags on the heads” of these initiatives, they’d all look similarly green and well-intentioned. But with just a little more scrutiny, you can see real differences between them.

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