News Release Newsroom

The Gas Is Getting Greener on the Other Side

byEnverus

ESG Compass report reviews, ranks and scores key metrics for investors and operators. A methane tax within the Inflation Reduction Act could impact operational changes for hydrocarbon production.

Calgary, Alberta (September 7, 2022) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its third iteration of its ESG Compass report that benchmarks U.S. and Canadian E&Ps on various environmental, social and governance (ESG) metrics. Investors continue to signal that ESG performance will be a fundamental input into its investment process while operators strive to develop competitive advantages inside and outside the boardroom. Enverus ESG Analytics reviews, ranks and scores emissions, emissions reduction targets, diversity in the workforce, board makeup, executive compensation and more. However, adding a new wrinkle to the issue is the impact that a methane tax contained within the newly passed Inflation Reduction Act (IRA) could have on the oil and gas industry.

“Natural gas and emissions are still taking center stage from an environmental standpoint.The gas is getting greener with all environmental factors and 89% of overall categories in our ESG algorithm improving on average since 2017 across producers we score. Still, important variation exists across companies and regions, and we are closely monitoring whether these improvements hold true as activity gains steam after the COVID lows,” said John Gutentag, report author.

“We view the inherent subjective practice of ESG scoring as a feature, not a flaw. ESG analysis is about internalizing historically externalized data points and what is important for one industry participant will be different from the next. The key is getting trusted, verified information which our ranking helps provide.”

“However, Enverus sees the methane tax as regulation via taxation, rather than long-term revenue generation. The goal of the tax, and the likely outcome, is not revenue generation but operational changes.”

Key takeaways Enverus’ ESG Compass report:

  • EQT Corporation (EQT), Range Resources Corp. (RRC), SM Energy (SM), ARC Resources (ARX) and Coterra Energy Inc (CTRA) are the top ranked ESG producers across the 56 North American operators scored using EIR’s algorithm.
  • All 11 environmental factors in our algorithm improved on average since 2017, a notable accomplishment for the industry. Overall, 89% of metrics improved since 2017.
  • There is a statistically significant relationship between bond yields and ESG performance. EIR estimates a 10-point improvement in ESG score results in a decrease in bond yields of 0.54 percentage points. There is no clear trend for equities.
  • ESG data disclosure is improving, with 98% of operators increasing their disclosure rates since 2017.
  • Gas operators edge out oil producers by 2.7 points on average, while U.S. companies top their northern peers by 4.2 points driven by Canada’s low-performing oil sands.
  • Appalachia remains the most-ESG friendly region with the six companies averaging a score of 67.1 while Canada’s oil sands lags at 53.3 mainly due to our score’s focus on emissions. 

Key takeaways on the potential impact of the methane tax within the Inflation Reduction Act:

  • If steps to reduce methane emissions do not occur before 2024, the financial impact of the methane tax on the U.S. upstream and midstream sectors will be ~$1.2 billion annually, increasing to $2 billion annually once the maximum rate activates in 2026.
  • Some 30% of upstream gas production sent to sales in 2020 violates the IRA’s 0.2% methane intensity threshold and will incur a liability assuming no operational changes by 2024. This is made up overwhelmingly of private operators, where 50% of gas sent to sales emits excess methane compared to only 21% for public producers.
  • Nationwide, the average upstream unit cost is $0.10/boe, but that average jumps to $0.26/boe when only including facilities that trigger the tax by emitting above the allowable threshold.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data, sourced from our partnerships to 98% of U.S. energy producers and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing, and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com

About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser.

Media Contact:
Jon Haubert | 303.396.5996

Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Related News

Enverus Press Release - $100/bbl Brent by 4Q23 will cause ouching for short sellers
News Release Newsroom
ByEnverus

CALGARY, Alberta (June 6, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its latest Macro Forecaster, a report developed for the financial services industry, and focused on the outlook for...

Enverus Press Release - Enverus selected for NET Power’s commercial initiative
News Release Newsroom
ByEnverus

AUSTIN, Texas (May 31, 2023) — Enverus, a leading energy-dedicated SaaS platform, is pleased to announce that clean energy technology company NET Power has selected it as its trusted data source for its business intelligence and analytics functions. Under terms...

Enverus Press Release - Enverus releases annual Top 100 Private E&P Operators list
News Release Newsroom
ByEnverus

CALGARY, Alberta (May 24, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, has released a list of the most prolific 100 private oil and gas producers in the U.S. based on gross operated production last year. Continental Resources,...

Enverus Press Release - Recession fears weigh bullish oil fundamentals down, higher natural gas prices needed
News Release Newsroom
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its latest quarterly FundamentalEdge report focused on global drivers for oil and gas prices to 2030, the five-year oil and gas supply and demand...

Enverus Press Release - Welcome to Enverus EVOLVE: The future of energy
News Release Newsroom
ByEnverus

Enverus, the most trusted energy-dedicated SaaS company, is inviting members of the media to EVOLVE, its annual conference that will be held virtually May 16 and 17. Enverus EVOLVE is the only conference that explores the future of energy through...

Enverus Press Release - Upstream M&A slides to $9B in 1Q23
News Release Newsroom
ByEnverus

CALGARY, Alberta (May 2, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, is releasing its summary of 1Q23 upstream merger and acquisition (M&A) activity. In Q1, U.S. upstream M&A saw $8.6 billion...

Enverus Press Release - Introducing CCUS Play Fundamentals
News Release Newsroom
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its inaugural CCUS Play Fundamentals report evaluating the full, source-to-sink value chain of carbon capture and storage at the national, regional and projects levels.

Enverus Press Release - Electric vehicles: A call on capital
News Release Newsroom
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the leading global energy data analytics and SaaS technology company, has released a report covering electrical vehicle (EV) infrastructure, battery supply chain, demand for metals and the anticipated recycling boom that should...

Enverus_EIR_Press_Releasse_Renewables_Thumbnail
News Release Newsroom
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a report that analyzes the impact of wind and solar project design decisions made by developers and quantifies the choices that result in the...

Find Out How Enverus Can Help Your Business

Subscribe to the Energy Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Access Tour

Access Product Tour

Speak to an Expert