The Oil & Gas industry loves acronyms and abbreviations. BBL, MMBtu, BHA, POOH, P&A, SWD, and one of my personal favorites from a tour sheet:  WOA. Go ahead, give that one a guess…..try Waiting on Alligator. Apparently, a gator had slunk into the mud pit, and the worm wasn’t having it with poking the dinosaur with a stick - so WOA it was. 

O&G loves acronyms so much so, there are entire books dedicated to the subject (no guarantees this one will be a page turner though). However, one contraction that is likely not in these now outdated books is ‘ESG’, a newcomer in the lexicon of exploration and production. ESG stands for Environmental, Social and Governance; fancy parlance for another thing companies need to focus on besides the bottom line alone. Investopedia defines ESG as: “a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.”

Now that we have that out of the way, what does ESG mean for the modern-day upstream operator? Investors are increasingly pressuring energy companies to work in a bit of environmental and societal good as part of their operations, and public companies are beginning to give more attention to dedicated sections in their 10K to addressing ESG within their business units. 

So how does a company tackle something as grand as ESG? Well, I’d advise to start small, and put to use one asset almost every company has in droves: surface land. With many companies shifting to horizontal laterals, much of the surface land now goes unutilized. If your company holds title to both surface and subsurface rights and there is limited need from a planning perspective to acres and acres of surface land, sprinkle a little ESG in there!

In my role as a landman with an international E&P, I managed thousands of acres of surface. I also had the pleasure of planning the spot of every wellpad, road and gathering line for a revolving 5 year plan. This allowed me to make use of surface acreage the company owned by planning solar power installations to benefit a series of localized yet remote pumping units, thereby not only producing some green energy from oil company lands, but also reducing opex costs on propane used to run the units! Talk about a win-win for oil & renewables. Now not every company can benefit directly from this type of setup, but if you have underutilized surface lands, let RealX help you get your ESG up and running!

A RealX membership will allow you to host all you company owned surface acres (hey, maybe even your leased surface too if your landowner is cool with it) on the RealX Exchange, and we can connect you with national solar developers who are actively searching for land all across the US on which to host solar farms. Your company can now monetize a real asset, potentially reduce opex costs, provide for partnerships with renewable energy, and check that ESG box on the company 10K or website, all without having to do more than just have a chat with our friendly team.

Want to know more about ESG done the RealX way? Give us a shout, we’d love to fill you in