Geopolitical events have impacted oil and gas markets, governments are pursuing unharmonized energy strategies, and the path to clean energy has become more complicated. Energy regulators are increasing scrutiny to ensure that companies that promise new energy production mixes or make ESG promises in fact carry out those plans. Carbon capture, use and sequestration technologies offer the promise of reducing CO₂ emissions from industrial processes, but participants must understand the legal ramifications.
At our flagship Energy & Commodities Conference in Houston on April 20, Reed Smith lawyers and a Eurasia Group executive discussed these and other factors that are posing new risks of instability and disputes for industry participants.
This conference report details the latest trends, challenges and regulatory changes affecting energy markets. We invite you to reach out to our authors to discuss what these issues mean to you and your enterprise.
https://communications.reedsmith.com/e/gskj5qik7gqwiw/fedf6128-01a6-463a-b51e-7e740e07620a
Among the report’s topics and key takeaways:
Geopolitics are sweeping away traditional energy market sensibilities
- Politics, rather than markets, are increasingly determining oil and gas flows
- Governments/blocs pursue unharmonized ‘energy security’ strategies
- Strong green investment also bridled by geopolitics, protectionism
Brave new world of carbon capture, utilization and sequestration
- Most jurisdictions attribute pore space ownership to the surface owner
- Standard contractual obligations for pore space utilization have not yet been established
- But many key features resemble those related to oil and gas development
U.S. regulators bulk up on ESG, data protection and environmental justice
- In 2022, the CFTC imposed over $2.5 billion in restitution, disgorgement and civil money penalties
- The CFTC brought most actions for reporting and recordkeeping issues
- The SEC has proposed rules to eliminate greenwashing and deceptive advertising
- FERC has been certifying more production facilities and pipelines
Emerging litigation trends are a warning: Assess and mitigate risks preemptively
- ESG commitments require whole-of-organization alignment
- Energy companies need to ensure contracts are tailored for planned energy transitions
- Consider high-sigma events and be wary of the plaintiffs’ bar
If you have questions or would like additional information on the material covered in this announcement, please contact the Reed Smith lawyer with whom you regularly work.
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