The Energy Diverse Future and its Logistics

The future of the energy market in America has never been more dynamic. From the recent record setting offshore lease sale of federal lands in the Gulf of Mexico to the newly passed infrastructure legislation approved by Congress last year, it is clear that the energy sector is ready for change. There’s plenty of motivation to go around, and not only because the US and EU struck an LNG deal as Europe seeks to cut Russian gas. The American government is also providing around $25 billion for energy technology projects, including offshore wind, carbon capture and storage, and clean hydrogen hubs to service the hydrogen powered fleets of the future.?

Unsurprisingly, oil and gas companies are looking to reinvent themselves with a sharpened focus on de-carbonization, while strategically diversifying their energy portfolios to include not only oil and gas, but also renewables, carbon capture, blue and green hydrogen. While widening energy portfolios bring increased investment, these opportunities also present challenges. But there remain ample reasons for oil majors to rise to this challenge: they and their suppliers are uniquely positioned for success in these emerging sectors. ?

Oil companies, like many of their suppliers, will need to be nimble, broadening beyond their core business lines. Whether you are an underwriter, broker, attorney, or any of their many service providers, we all will need to carry the necessary expertise among a reduced field of players that has broadly retracted since Q4 of 2014 when the global oil market collapsed, hitting the US market particularly hard.?

Furthermore, with new legislation comes not only increased incentives and subsidization, but also narrowing deadlines at a time where oil prices are continuing to climb. The question will be can local markets rise to the challenge of bringing the US to a net-zero energy environment by 2050??

In the coming weeks, we will be spotlighting different areas we all should be aware of during this time of transition. Come back next week for our next post: “Oil and Gas Not a Fossil Just Yet.” That also happens to be the theme of this year’s HMEIC. If you haven’t already, follow us on LinkedIn and register for the conference here.