The reality of energy markets is that the global the economy still relies significantly on oil and natural gas as a critical energy sources, renewables must scale up considerably to replace them.
FREMONT, CA: As we get closer to binding climate agreements, world leaders are doubling down on an energy transformation that will rely more heavily on renewable energy sources. Investment in the energy transition is well underway. New projects for wind, solar, hydro-generation, battery, and other storage technologies, hydrogen, bio-based fuels, and carbon capture and storage are announced regularly. The reality of energy markets is that the global economy remains heavily reliant on oil and natural gas as primary energy sources; renewables must scale up dramatically to replace them.
Innovation in Energy Trading
New technologies and quicker distribution channels are required to guarantee that the market can appropriately respond to all of this new data. The supply of essential energy data through desktop and application programming interface (API) allows traders to monitor the value of transition commodities and trade them with the most up-to-date information in real-time. APIs enable data to be accessible, integrated, and queried most conveniently for the user, allowing the digital transformation – and unlocking new value.
Increasing the availability of cleaner gas
Broader natural gas regulations are evolving, embracing methane and other ESG qualities. In response to increased consumer and end-user desire, some midstream operators recently indicated that they would begin designating physical pipeline capacity for certified gas. Market players will be able to select and use the lowest emitting assets if they have more reliable and complete information on the carbon footprint and methane emissions of individual oil and natural gas resources.
Crude trading and Carbon Intensity
One metric that the market has begun to use to assess GHG emissions from various types of crude oil production is carbon intensity (CI). Crude oil with lower GHG emissions per barrel has a lower CI than oil with more significant emissions. The market may discount petroleum produced at a relatively high emissions rate, just as increased sulfur content devalues crude. The demand for low-carbon oil may develop and price in upstream CI in the not-too-distant future, with crudes with lower CI selling at a premium to those of more significant CI.
