Energy symposium panel in New Castle highlights shifts in oil and gas strategies
Energy companies across Colorado are currently working amid major external factors affecting production.
New state rules passed by the Colorado Legislature in 2019, a global push to reduce carbon emissions and, now, a war in Ukraine that’s severely impacting the global energy market have all made for choppy economic waters for oil and gas companies.
In New Castle on Thursday, a panel of oil and gas executives spent time during the eighth annual Energy & Environment Symposium addressing the industry’s future. The three-day event was hosted by Garfield County and Colorado Mesa University.
The panel consisted of Caerus Oil and Gas Chief Operating Officer Andrea Passman, Chevron Rockies Business Unit Vice President Hodge Walker and Civitas Resources Inc. Chief Sustainability Officer Brian Cain.
In 2019, Gov. Jared Polis signed a new law, Senate Bill 19-181, that allows local governments to impose new regulations on oil and gas development. And in a post SB19-181 world, the real challenges for the Western Slope production falls on predictability and timing, Passman said.
“It really comes down to making sure that we can deliver on our plans, which is speed of permitting and timing associated with that,” she said. “As well as making sure that we’re all connected.”
But new regulations aside, Passman noted that there simply aren’t enough pipelines to carry away gas.
“It used to be that there was, like, 20 rigs running out here at a time. But, fundamentally, those wells did not do as much as the wells today,” she said. “So, while we only have four or five rigs running, we only have four major takeaway pipelines in this region.”
Cain said Colorado’s oil and natural gas industry came to a hard stop amid new regulations. But the challenge prompted Civitas, Colorado’s first carbon-neutral energy producer, to shift its model from drilling as much as it could to spending less than what it actually produces, Bain said.
“We’re interested in chasing and creating value, rather than growth for the sake of growth,” he said. “That’s a much healthier industry.”
Amid the pledge of becoming net-zero — an effort that essentially encourages companies to create renewable energy on-site — Cain said it has completely changed the economics of Civitas’ decisions.
“We have a relentless focus on driving down operational emissions, and then offsetting residual emissions using only certified offsets procured through the four largest and most critical registries,” he said.
For Chevron, Walker said mitigating potential impacts on communities came well before the passage of 2019’s new regulations.
In 2014, Walker said Chevron started looking at a more comprehensive approach to development over a broader area. This systemic approach meant looking at ways to build infrastructure that moves product without the use of trucks while creating tankless designs.
“Having that longer time frame, being able to engage with service providers, with communities, with landowners to lay that plan out, is very powerful in being able to be efficient, reliable, safer,” he said. “And having a lower impact on the environment in our communities.”
When it comes to any discussion over oil and gas regulations, the term “renewable energy” is usually always mentioned.
In that spirit, Cain said natural gas is going to continue to play a pivotal role in diversifying energy companies’ portfolios.
“As we’re faced with a crisis in Europe, these companies that have massive switches to renewable energy still need significant natural gas resources for baseload power,” he said. “Baseload power is what keeps the lights on, it’s what keeps the showers hot when the sun’s not shining and the wind’s not blowing.”
Reporter Ray K. Erku can be reached at 612-423-5273 or email@example.com.
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The Rifle High School baseball team is set to host a regional round as the No. 2 seed overall in the Class 4A State Baseball playoffs Saturday.