The world’s transition from fossil fuels to renewable energy is front and centre for any government, organisation and private institution. Reaching net zero is a target all countries to aspire to, but how governments choose to embrace, encourage or penalise firms towards a greener future varies greatly.
Following on from COP28 and our London energy transition dinner in October 2023, we hosted a second dinner in Houston, Texas, to discuss the state of the energy sector and challenges currently faced with those from across the industry. While many sentiments were shared between the attendees of both events, there were some distinct differences felt in the US compared to the UK and Europe.
Methane vs CO₂
To date, the biggest focus for climate change has been CO₂ and its impact on the planet – and rightly so. However, methane has been found to have a far stronger negative impact on our environment compared to CO₂ within a shorter time frame, which makes addressing methane a fairly urgent problem to address.
In the US, the spotlight has been firmly put on methane leaks by the Environmental Protection Agency (EPA), and their new Methane Emissions Reduction Programme (MERP) now requires regular leak monitoring at existing and new well sites, a phase-out of pneumatic controllers and a new waste charge which will be imposed on operators.
Carbon Capture
A key strategy for those in the US is carbon capture, however, it comes with its own challenges. Attendees expressed their own, and their firms desire to want to do it, but the bigger questions are ‘when?’ and ‘how?’. With land already being seized up to facilitate CO₂ gas storage, it’s not an issue of whether people want to do it, but with policy aligning on a state-wide basis to enable it to happen.
Carrot vs Stick
When reviewing the discussion points from both of our energy transition events, legislation and policy plays a vital part in a company’s move to cleaner energy and technology.
In the US, the federal government has launched several funds and initiatives, such as the Inflation Reduction Act (IRA), giving funding to businesses investing in greener projects, energy and projects.
Whereas in Europe, many energy firms are dealing with a complex and ever-evolving carbon removal certification framework (CRCF) and the world’s first carbon border tax. However, it is worth noting that in the UK the British government have announced plans to consider relaxing the construction planning rules for mini nuclear power plants. How long this will be considered for and potentially introduced is unclear.
A single goal with many individual routes, the road to energy transition is not a clear or easy one and comes riddled with many challenges. The ability to meet net zero goals and transition to greener energy has left professionals and firms across the globe unclear on the future. Solutions are available but it’s collaboration at all levels across all firms and policy that encourages rather than penalises that has the potential to boost the transition.
Find out more about the topics covered at the dinner by downloading our white paper.
