There is a lot of momentum around responsibly sourced gas, with various certifying agencies fighting for market share and pipelines introducing tariff provisions to facilitate the sale of such gas. But we do not see the same sort of activity with respect to responsibly sourced crude in this country.
Why does it matter?
All forms of fossil fuels are under attack for the climate change impact the use of the fuels have. But the producers cannot control the emissions generated from the use of their product. They can, however, control the carbon intensity of the processes they use to produce those fuels and demonstrate leadership in reducing Scope 1 GHG emissions.
What’s our view?
The difference in activity between natural gas and crude may derive from the fact that the largest producer of natural gas, EQT, has a decided advantage over most of its competitors in producing a lower carbon intensity product. But for now, that does not appear to be true for the larger U.S. producers of crude like ExxonMobil and Chevron, although both are moving in that direction.
