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Reid Brooks Director, Opportune LLP, USA

Our Managing Partner David Baggett has a tradition investments such as leak detection and repair, carbon offset of distilling his view on the year ahead into credits, carbon capture and increasing the use of renewable words like “scrappy” or “resilient” at our firm’s power generation for operations. While certain of the annual meetings. Hindsight being 20/20, technologies required to reach these aggressive emissions “perseverance” seems appropriate to describe the personal targets don’t yet exist on an industrial scale, it is the faith in and professional hardships many felt during a difficult 2020. innovation to overcome these technological barriers that will With most of 2021 in front of us, I feel strongly that “adapt” create new opportunities for pipeline operators. would be the right word to describe the year ahead. In much the same way that domestic oil and gas was

Coming out of the toughest commodity price reinvented by the advent of newer and more efficient environment in recent history, companies across the energy exploration and production technology like hydraulic value chain will now be required to reinvent themselves if fracturing, pipeline operators now have the ability to redefine they hope to survive as the world changes around them. themselves as well. While large-scale pipeline-related Competition for investment dollars now hinges on how infrastructure development projects have fallen out of favour, well a company can demonstrate stewardship of technology such as carbon capture and sequestration (CCS) environmental, social and governance may create new investment (ESG) principles in operating their businesses. The Biden administration, less than a week into its first term, issued numerous executive orders with farreaching consequences to oil and gas. Most notably for pipeline operators, the cancellation of Keystone XL’s permits signalled a shifting of the trade winds yet again on the project, which has spanned three administrations and endured a barrage of lawsuits. As a result of this and other recentlyscuttled pipeline projects, some midstream executives have questioned the ability to ever again develop greenfield long-haul pipelines.1 Many believe natural gas will represent the bridge fossil fuel over the next 10 to 20 years.2 This is especially true for power generation and local distribution utilities that rely on an uninterrupted supply of natural gas. THE DECLINE THE DECLINE OF NATURAL OF NATURAL GAS...WILL BE GAS...WILL BE HASTENED HASTENED WITHOUT WITHOUT BOLD AND BOLD AND DECISIVE DECISIVE ACTIONS ACTIONS TAKEN BY TAKEN BY PIPELINE PIPELINE OPERATORS OPERATORS opportunities while contributing to reduced emissions. Improvements in technology like LIDAR-based methane detection and flare-eliminating emission-less blowdown equipment will contribute to a pipeline operator’s ability to minimise emissions events more economically during routine operations and maintenance. Midstream energy companies, now more than ever, have many platforms by which they can communicate their commitment to embracing ESG. Sustainability reports, investor presentations and social media all represent opportunities for pipeline operators to demonstrate their commitment to creating a sustainable approach to business. However, businesses will be defined not by the quality of these reports or the frequency of social media posts, but by taking many small, meaningful steps With mounting pressure by investors to towards aggressive goals they set for achieve net-zero emissions targets, many utilities are themselves across all facets of ESG. beginning to rethink their investment strategies, which These bold promises will create opportunities for could result in a quicker pivot to renewables. innovation and the ability to prolong the use of natural gas

The decline in the role of natural gas as a bridge fuel will to ensure both domestic and foreign supplies of clean, be hastened without bold and decisive actions taken by affordable and reliable energy to continue to power the pipeline operators to reduce or eliminate emissions. The economy of the 21st century. midstream entities who survive will do so by embracing these fundamental changes and adapting. Midstream companies 1. https;//www.bloomberg.com/news/articles/2021-01-10/biden-blockinglike Enbridge and Williams, among others, have taken bold steps pledging net-zero – or significantly reduced – keystone-threatens-to-end-era-of-mega-pipelines 2. https://www.spglobal.com/ratings/en/research/articles/200924-theenergy-transition-covid-19-undermines-the-role-of-gas-as-a-bridgeemissions targets through a combination of infrastructure fuel-11667239