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Energy & Commodities Outlook – Key takeaways for the industry 2022

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The war in Ukraine has hit the energy sector and destabilized the transition to carbon-free energy. At the same time, investors increasingly require that their investments go toward environmental, social and governance ends. Reverberations of COVID-19 include an expansion of nonperformance in energy-related contracts, and we expect to see new kinds of litigation around that.

Reed Smith lawyers and a Eurasia Group executive contribute these and other insights to give you an updated picture of a rapidly evolving situation. The report outlines key themes discussed at Reed Smith’s flagship Energy & Commodities Conference held in Houston on March 31. Read the report and reach out to our authors to discuss what these issues mean to you and your enterprise.

 Outlook: Spring 2022 Energy & Commodities 

Among the report’s topics and key takeaways:

Ukraine war reshapes energy geopolitics and decarbonization

Key takeaways:

  • Russia’s aggression is causing Europe to relook elsewhere for gas imports
  • Opportunities open up for LNG exporters
  • Boycotts might speed up adoption of renewables

Worldwide coordination: The key to success on achieving carbon neutrality

Key takeaways:

  • The transition to a carbon-neutral economy will require energy producers, policymakers and customers to coordinate market developments
  • A clear regulatory framework is required to support infrastructure investments
  • The energy transition is a great opportunity, and a global imperative, which will require an “all-tools-in-the-box” approach to be successful

SEC policy shift expected to increase power of shareholders moving for action on ESG

Key takeaways:

  • Policies that thwarted shareholder ESG proposals reversed
  • New policies protecting socially responsible initiatives are being implemented
  • Broad-scope issues like climate change may be included alongside core business activity
  • Concept of shareholder micromanagement narrowed

Regulatory and enforcement trends at the CFTC and FERC: Spring 2022

Key takeaways:

  • FERC now has a full quorum; imposes big enforcement fines
  • Appeals court reverses FERC orders restricting gas pipelines
  • FERC seeks tougher reliability standards for critical infrastructure
  • CFTC pursues greater control over digital asset trading platforms
  • Full quorum of CFTC commissioners expected soon

Litigation risk management in cross-border disputes and force majeure

Key takeaways:

  • The pandemic has created difficult legal issues, particularly in foreign trade
  • Application of civil law – prevalent in Latin America – may have serious implications in force majeure claims
  • Proactivity is required to defend against force majeure claims
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