Soaring Methane Emissions Suggest U.S. Oil Production Is Bouncing Back
U.S. oil production remains about 2 million bpd lower than its pre-pandemic levels. Still, methane emissions are already back to their levels from before the coronavirus. Worrying as this is in itself, it could also threaten energy companies’ long-term growth prospects because investors’ priorities are changing. What investors want from oil and gas now is not just stable returns but a lower carbon—and methane—footprint.
The Financial Times reported recently, citing data from the Environmental Defense Fund, that methane emissions in the U.S. shale patch had rebounded to pre-pandemic levels already, after dropping sharply as oil and gas production dropped last year amid the pandemic. Methane is a much more powerful greenhouse gas than carbon dioxide, although it dissipates faster in the atmosphere and has recently been garnering growing attention from regulators, environmentalists, and, now, shareholders.
“The investor community that stuck with [the shale industry] is the steady ones, that want discipline, that want predictability,” Regina Mayor, global head of energy at accounting major KPMG, recently told Forbes in an interview. “That’s the investor base they are all pandering to now. The growth investors are gone.”
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Source: Oil Price
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