RE: House Democrats Open Probe Into Gas Producer Diversified Energy19 Dec 2023 07:43
Bloomberg article….
“ House Democrats opened an inquiry into Diversified Energy Co., the largest owner of US oil and gas wells, warning that the company’s unusual business model poses risks to taxpayers and the global climate.
On Monday, members of the House Energy and Commerce Committee led by New Jersey Democrat Frank Pallone sent a nine-page letter to Diversified Chief Executive Officer Rusty Hutson Jr. requesting documents and information about the company’s methane emissions and business practices.
Diversified specializes in buying old, minimally productive wells and keeping them in operation as long ...”
One could argue what an opportunity for DEC..!
What other producer has run LiDAR over all its wells to identify and prioritise emission reduction. Has a full cycle hedged amortisation model designed to pay of debt and see out well decommissioning. That actually reduces risk to taxpayers!
Is also plugging third party wells on a bundle basis to maximise productivity. Is exceeding legislative plugging targets by hundreds of %!
Has been awarded gold standard for ESG reporting and transparency from an independent body. Actively engages and supports the communities it works in. Even has embedded whistleblower protections and encourages employee reporting. It really has come on miles since the original Bloomberg article. A fact that has probably been overlooked.
Extending the life of old wells and thereby offsetting the need for drilling new wells with higher carbon footprints is actually aligning with COP energy transistion principles!
Modelling using old wells for carbon capture is a further extension.
One could go on but regulatory changes are always a risk. However, they usually have unforeseen consequences. It is quite likely that any change in environmental standards could actually be more of a challenge to other industries as opposed to DEC. Particularly impacting LNG plants which have horrendous emissions records.
Then the risk to the tax payer. Well DEC has a proven history through published audited accounts of the benefits of its hedging model.
With the thousands employed by DEC and DEC paying taxes and employing others in the communities that is also a risk of loss to the taxpayer.
For sure DEC is a large employer and owner of assets, ‘too big to fail’ has been quoted before.
But this explain yourself request could actually help DeC explain itself! It may also allow the democrats to grab a few headlines along the way.
But with so many unintentional consequences and a likely litigious response should DEC be singled out unfairly in the business friendly HC friendly caucuses election battleground I doubt much will come of it. But I do recognise it’s something we could do without.
Usual caveats
Trek
Sign In
Follow the stocks
