Big Oil Is Buying RNG Companies: What Do They Know?
BP, Shell, Marathon and TotalEnergies have all purchased RNG companies in the last six months.
These purchases include:
- BP $4.1 billion purchase of Archaea Energy for.
- Shell $2 billion acquisition of Nature Energy Biogas.
- TotalEnergies purchase of Poland’s largest biogas company, Polska Grupa Biogazowa.
- Marathon took a 49.9% stake in LF Bionenergy.
Big Oil is moving into RNG for three primary reasons:
- There are no downsides.
- RNG removes methane from the air which is very important to EPA.
- RNG is forecasted to grow at 44% compound annual rate, to $72 billion in 2027.
Follow the money
Considerable opportunities will be unfolding as Big Oil continues to move into RNG. One of the major beneficiaries are companies currently supporting the oil and gas industry.
An analysis of the jobs on well sites can be broken into three categories: site services, general services and equipment. Comparing an RNG project to a typical well site job, 82% of site services done are essentially the same; for general services 86% of work done on an RNG are similar; and 100% of the equipment is the same.
Companies working in oil and gas can gain a real insight into RNG and its opportunities by attending the Appalachian RNG Conference on April 19th at the Hilton Garden Inn at Southpointe/Pittsburg. The conference is produced by Shale Directories and H2-CCS Network. “The RNG market provides a unique opportunity for multi-year growth due to the overwhelming demand,” commented Tom Gellrich, CEO & Founder, H2-CCS Network. He further added, “Our conference will provide attendees a comprehensive view and understanding of the rapidly developing RNG market.”
Constant Demand for RNG
The demand for RNG will remain very strong for many years to come. While oil and natural gas prices fluctuate and low prices could reduce production, the RNG market will not experience a similar situation because RNG is a clean energy. Companies working on well site should be advised to follow Big Oil into RNG. There are few industries today that are forecasting compound annual growth rate of 44%, to $72 billion in 2027.