One thing to start: Energy Source is delighted to announce our latest signing: Justin Jacobs, who joined the paper yesterday as our Houston correspondent — another key move in our US expansion.

We also bid a fond farewell to Neil Maxwell, the FT’s newsletter tsar, so critical in the relaunch of Energy Source.

On to the main item. Under growing investor and political pressure, American oil and gas companies are starting to talk up efforts to tackle emissions in their operations. Our first note asks whether it’s all another PR stunt or real.

Our second is on the arrival of new demand-response technology in California, which could save a huge amount of energy.

Thanks for reading. Please get in touch at You can sign up for the newsletter here. — Derek

US oil producers are beginning to talk the talk on tackling emissions. As I wrote at the weekend, climate consciousness, previously the sole preserve of European companies, is going transatlantic.

Why? Well, there’s the imminent arrival of the Biden administration, the sector’s dirty image among foreign importers, and (most importantly) investor pressure.

Is this a serious shift or greenwashing?

A handful of big US names (ConocoPhillips, Occidental Petroleum and Pioneer Natural Resources) have now laid out ambitions, varying in scope and detail, on cutting back emissions. More will join the party soon.

For those first out of the gates, the approach is vastly different from their European counterparts. Critically, there is no great pivot to renewables in the mould of BP or Shell. Consider them in turn:

Occidental: Oxy has vowed that by mid-century, it will hit “net zero” not only on Scope 1 and 2 emissions (ie: those from its own operations and those of its power providers) but also Scope 3 emissions (those from the oil their customers burn). That is a big deal.

But it involves a business model overhaul — and will not be easily mimicked by everyone. Oxy will shift its focus to carbon capture and sequestration, rather than oil. Vicki Hollub, Oxy’s chief, said last week that the company would “ultimately” become a “carbon management company” with oil and gas a mere side business.

Oxy reckons its experience in the field could give it first-mover advantage, allowing it to carve out a niche in what could be a big business in the years to come, said Victor Flatt, a law professor and co-director of the University of Houston’s Environment, Energy, and Natural Resources Center.

The move is a big bet on carbon capture — a technology some clean energy experts think will play a marginal role in the future, at best — and carbon pricing. It will probably take years to pay off. Oxy declined to speak to ES on its targets — instead directing us back to its Climate Report, released last week.

ConocoPhillips: Conversely Conoco — the first US producer to make a big emissions commitment — has chosen not to make any grand promises on Scope 3.

Instead it has vowed to eliminate the emissions within its direct control by 2050 ish and to be more selective with its investments, only throwing money behind projects that are viable in a “Paris-aligned” world. At its heart, though, it will remain an oil company. As an indicator for the direction of the sector as a whole, that makes it the one to watch.

“If they’re successful in that, they create a road map for dozens of other companies that just don’t have the skill set or the resources to branch out into other kinds of energy,” said Andrew Logan, director of oil and gas at Ceres, a non-profit organisation that coordinates investor action on climate.

Pioneer: The shale producer has been vocal on emissions — particularly the ills of flaring. But Pioneer’s target is strikingly unambitious: a 25 per cent reduction in greenhouse gas intensity by 2030 (alongside various methane targets).

Without dwelling on the intensity-versus-absolute debate (in theory you can cut intensity while producing more emissions), the goal seems a bit feeble next to the grander targets of its rivals.

At least it’s achievable, says Pioneer. And that is another key point.

Lofty mid-century targets aren’t much use if they just let management leave difficult decisions to their successors. And without near-term targets that is exactly what may happen.

“The commitments that we put out, we follow through on,” Mark Berg, executive vice-president at Pioneer, told ES, defending his company’s targets.

He has a point. Taking any of these commitments seriously will demand thorough examination of the details — something that has so far been lacking.

Whatever the shortcomings now, a sea change in the political and investor arenas means the trajectory is “unstoppable”, said Prof Flatt. “As long as they’re seen as the main drivers behind the problems of climate change, it just won’t [go away]. They’re villains until they can suddenly show that they’re not villains any more.” (Myles McCormick)

When Californians’ lights went out in August amid a record heatwave, one thing that prevented the blackouts from spreading even further was payments to customers to temporarily conserve energy. An investor is now betting that such “demand-response” systems can be scaled up before next summer’s heatwaves.

Sidewalk Infrastructure Partners, backed by Google’s parent Alphabet and the Ontario Teachers’ Pension Plan, said Monday it would invest $100m in the company OhmConnect and its project to introduce demand-response to more than 500,000 households.

Linked together, these homes could temporarily remove 550 megawatts of demand from the grid, said Jonathan Winer, Sidewalk’s co-chief executive. “It’s much easier and quicker and cheaper to be able to scale this much demand response than it would be, for example, to build another natural gas peaker plant, or to install a whole bunch of batteries in front of the meter,” he said.

Under most demand-response programmes, utilities pay industrial customers to shave load. Lining up residential customers has been harder, in part because their monthly bills do not reflect electricity costs that fluctuate from hour to hour.

Mr Winer said that $80m of Sidewalk’s investment would largely subsidise households to purchase thermostats, batteries and plugs connected to an app. Customers get price alerts, telling them how much they could earn by running their dishwashers later or setting indoor air temperatures two degrees higher. “It’s sort of like a gamified user experience where you say, ‘Hey, I want to participate in this,’ ” Mr Winer said.

During the worst week of California’s power emergency, OhmConnect paid 150,000 homes $1m to conserve one gigawatt-hour of electricity, Mr Winer said. California authorities have urged new demand-response resources by the summer of 2021.

OhmConnect bundles customers’ power savings and sells the resource in wholesale capacity and energy markets. Such aggregation businesses got a boost this year when the Federal Energy Regulatory Commission passed a landmark rule authorising distributed energy resources to sell into US wholesale power markets. (Gregory Meyer)

Demand for helicopter flights to offshore oil and gas facilities will end the year down 15 per cent compared with 2019 — an outcome of operators conserving cash, deferring activity, and moving some activities ashore during the pandemic, according to research from Rystad Energy. Activity will pick up next year and exceed 2019 levels in 2022, it says — but remain well below that seen in the boom years of 2013-14.

Column chart of Million passenger miles (nautical)  showing Downdraft: offshore helicopter travel fell this year

The oil price recovery into the $40/barrel-range has helped pull production from North Dakota’s Bakken oilfield out of freefall, but it hasn’t spurred the kind of drilling recovery needed to sustain output increases or bring jobs back to the shale patch.

North Dakota’s oil producers responded to oil’s crash earlier this year with an unprecedented wave of supply shut-ins and spending cuts that sent the local oil economy into a tailspin. Output was back to 1.22m barrels a day in October, up 40 per cent from May’s nadir, as wells shut-in because of ultra-low prices were restored to production.

But jobs in the once booming oil patch remain hard to come by, a sign that the headline supply recovery belies a still ailing energy economy. The unemployment rate in the state’s core oil-producing counties rose in October to 9.3 per cent from 8.4 per cent in September.

At this time last year, the unemployment rate in those counties was just 1.7 per cent — among the lowest in the country. The output numbers — if not the jobs figures — are another sign that from the supply point of view, US oil's worst days are behind it, but a return to full health remains a long way off.