By Rod Walton, EnergyTech Senior Editor
The C&I Energy Transition is gaining momentum all around us, but it will take time and patience to fully unfold. Not everyone is on board, for both financial and tactical reasons.
Even historically oil industry companies such as Shell and ExxonMobil recently have committed to ambitious carbon reduction targets in future years. In the heart of West Texas Intermediate (WTI) country, however, less than half are publicly announcing carbon and methane reduction goals, according to a recent survey for its 10th District by the Kansas City Federal Reserve.
The KC Fed’s latest Energy Survey of 33 companies within its territory found that 45 percent of drilling, production and other energy-related firms have developed plans to reduce carbon dioxide emissions from activities. Slightly less than that, about 41 percent, plan to work at cutting methane emissions—the key element in natural gas and seen by some as a worse environmental danger than CO2.
A fifth of those energy firms plan to reduce flaring, or burning off excess gas to reduce pressure on operations. Nearly 30 percent are working out ways to recycle and reuse water, which is used in high volume during hydraulic fracturing activities for oil and gas production.
That’s good news, with a large caveat: Nearly 40 percent of those KC Fed district energy firms participating in the survey have no announced plans right now to do any of emissions and environmentally conservative actions, according to the survey. Many most likely have improved energy efficiencies in operations, but are not ready to move forward with ambitous (and public) targets they are uncertain to achieve.
The Oil Patch, as it’s been called, is ramping up in the wake of rising commodity prices. Seventy percent of energy firms plan to increase capital spending this year (with only 20 percent saying the expenditures will rise significantly), the KC Fed’s survey release indicated.
Nearly 90 percent of the KC Fed Energy Survey respondents said 2021 fourth quarter revenues rose in comparison to the pandemic recession of the same period one year earlier. West Texas Intermediate crude, which is the standard as priced at the oil storage hub in Cushing, Oklahoma, is now at about $76 per barrel, compared to less than $16 in April, 2020 at the pandemic's early days.
The KC Fed responses came from companies operating in Missouri, Oklahoma, Kansas, Nebraska, Wyoming and northern New Mexico. Three of those states—Oklahoma, Wyoming and New Mexico—ranked in the top 10 for U.S. crude oil production in 2020, according to Statista.
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(Rod Walton, senior editor for EnergyTech (pictured), is a 14-year veteran of covering the energy industry both as a newspaper and trade journalist. He can reached at [email protected]).
