What’s the issue?
Both government and market forces are driving towards a net-zero carbon economy by 2050. In his recent book, Bill Gates laid out the challenges of that goal and his plan for how to reach it. However, there was hardly any mention of the role that the incumbent gas and pipeline industry could play, with just a brief mention of the role hydrogen and carbon capture could play.
Why does it matter?
It appears that the drive to net-zero is being widely adopted and the incumbent companies can either fight it or find a way to adapt to it.
What’s our view?
Bill Gates’s good friend, Warren Buffett, recently acquired all of the gas pipeline and storage assets from Dominion Energy. We suspect that he sees a value in such assets, including the existing 7,700 miles of gas pipelines and 900 Bcf in storage fields, a value apparently overlooked by Bill Gates. The other companies that currently hold such assets will need to choose whether to facilitate or frustrate the move to net-zero, and we think there is a tremendous opportunity to be a facilitator.
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