Liability, Lending and Leadership in Midstream CO2 Initiatives

Pipeline operators have shown leadership in trying to curb emissions, including initiatives in planning CO₂ lines. 

Liability, Lending and Leadership in Midstream CO2 Initiatives

Lenders are also in a position to add their weight. “My hunch is that we will see a move in the direction of lending to CO₂ pipeline projects,” said Jeff Civins, senior counsel in the environmental practice group in the Austin office of Haynes and Boone. (Source: Shutterstock.com)

A recent survey of producers conducted jointly by Haynes & Boone and EnerCom found that producers registered with the U.S. Securities and Exchange Commission (SEC) continue to include more disclosures around climate-related risks and climate change, with most producers including risk factors on several key issues facing the industry.

“There would be exposure to liability on the legal side for a company to make unsubstantiated claims regarding environmental accomplishments in general, and regarding greenhouse-gas (GHG) emission reductions in particular,” said Jeff Civins, senior counsel in the environmental practice group in the Austin office of Haynes and Boone. That is part of the reason that most company disclosures keep to Scope 1 and 2 emissions, rather than Scope 3, which are more difficult to both quantify and verify.

Scope 1 emissions are greenhouse gasses released directly from a business. Scope 2 are indirect emissions from energy purchased. Scope 3 are also indirect GHG emissions, specifically, those resulting from upstream and downstream activities associated with a product or service–that is, GHG emissions across a business’s supply chain.

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Gregory Morris

Gregory DL Morris has covered conventional energy from exploration and production to refining and petrochemicals. He regularly contributes to Oil and Gas Investor and Midstream Business.