Driving Decarbonization in the Energy Sector: A JPMorgan Chase Perspective

The oil and gas industry has a significant role to play both in delivering energy today and in enabling the energy transition for tomorrow. Industry leaders can build actionable decarbonization road maps that link decarbonization to strategy, identify where efficiency gains can be made, factor emissions reduction into operational planning, and build cultures that integrate decarbonization for the future. Amidst the risks and shifting regulations, new innovations and opportunities are emerging as the world transitions to a more sustainable, lower-carbon future. 

“It's essential to understand that sustainability is about something much more than just compliance. It involves capturing operational efficiencies, strengthening competitive positioning, meeting stakeholder expectations, and effectively managing risks,” says Ben Ratner, Executive Director, Corporate Sustainability, JPMorgan Chase in an exclusive interview with the Industrial Decarbonization Network. 

Ben joins us ahead of his session on Operational Edge: U.S. Oil and Gas Leadership Through Decarbonization, at the Decarbonization Oil & Gas Summit taking place in Houston, September 25-27, to discuss decarbonization opportunities for the oil and gas industry and the role JPMorgan Chase plays in facilitating the low-carbon transition. 

Read as Ben discusses JPMorgan Chase’s perspective on successful decarbonization strategies and the challenges the industry needs to overcome in its efforts to transition to more sustainable practices. 

Maryam Irfan, Industrial Decarbonization Network: In your opinion, where does the oil and gas industry stand within the context of the energy transition?  

Ben Ratner: While there is no shortage of noise around the transition of the oil and gas industry, I believe we are entering an era of clarity.  

Firstly, there is increasing recognition of the need for large volumes of oil and gas to meet both domestic and global energy demands during this transition.

Secondly, it's becoming clearer that the energy transition is not only important and well underway, but also that energy supply is just one part of the energy system, and decarbonizing demand is vital and takes time. 

Thirdly, we are now more aware that although there is no one-size-fits-all solution for oil and gas companies navigating this transition, there are both immediate and long-term steps that operators can take to become a critical part of the decarbonization story. 

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Maryam Irfan, Industrial Decarbonization Network: What role can financial institutions such as JPMorgan Chase play in facilitating the low carbon transition while also ensuring energy security? 

Ben Ratner: I see three key roles that institutions like ours can play in balancing the low-carbon transition with energy security, reliability, and affordability.

The first is, of course, capital. As a bank, JPMorgan Chase’s core role is working to facilitate access to capital that can support the transition of the real economy while also meeting needs responsibly today. Our firm works alongside clients, including in the oil and gas and traditional sectors, helping them finance traditional energy while reducing carbon intensity. We are also working to scale up green solutions across the energy system and beyond through our $1 trillion, 10-year financing and facilitating target.

Another key role we play is advising and engaging with our clients, both in traditional parts of the energy sector and in emerging solutions. We aim to support clients as they make choices on navigating both the opportunities and the risks associated with the low-carbon transition. A great example of this is our Center for Carbon Transition, which operates within our Corporate & Investment Bank, collaborating with a wide spectrum of clients on their decarbonization strategies and climate-related disclosures. 

Lastly, financial institutions operate in the context of the global economy which faces barriers to transitioning. Our expertise and power to convene stakeholders across sectors and industries can support efforts to address these issues and advance pragmatic solutions.

It’s this holistic approach—our capital, our advice, our relationships—that we believe contributes to the energy system’s ability to meet needs responsibly while also addressing the shared climate challenge. 

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Maryam Irfan, Industrial Decarbonization Network: What decarbonization opportunities do you see for oil and gas companies? What can the industry do to accelerate progress? 

Ben Ratner: I would suggest that tackling Scope 1 emissions should be the top decarbonization priority for oil and gas companies, building on progress underway in the last few years. I also want to express humility in my perspective because it’s the operators’ engineers and field staff who hold the knowledge, insights, and experience necessary to accelerate progress in this area. 

That said, my view on methane emissions is that key steps include monitoring and measuring emissions, engaging the workforce in a culture of emission management, and allocating capital to prioritize emission abatement for the largest sources, while driving efficiency. 

Eliminating routine flaring is another priority, and a big part of that is utilizing a drilling plan that is developed in conjunction with immediate midstream infrastructure build out. Engaging midstream partners and finding other ways to significantly reduce non-routine flaring is another near-term opportunity.

Looking to long-term solutions and considering changes to a company’s business model, it’s important to recognize that different companies will make choices that are right for them. Again, there’s no one-size-fits-all solution. Geothermal and offshore wind are a couple of zero-carbon energy solutions that harness core competencies that the oil and gas industry is uniquely positioned to deliver. Carbon capture Is another important opportunity to consider.

Maryam Irfan, Industrial Decarbonization Network: You spoke of these immediate and long-term opportunities. How easy are they for operators to implement? 

Ben Ratner: Scope 1 emissions reduction opportunities in the oil and gas sector are among the most cost-effective greenhouse gas reduction solutions in the energy system, and in the broader economy today. This is an excellent opportunity for oil and gas operators because it allows them to lead the charge and become part of the solution this decade, or even next year. 

The availability of proven technologies, along with innovation entering the market seemingly every month, is helping operators become even more efficient in reducing the waste of natural gas and monetizing more of it within the pipeline, all while improving their environmental stewardship. 

I think that some of the more fundamental changes to business models have real upside potential as the world changes but may also bring cost, complexity, and require a long-term approach. They may make strategic sense for some operators but not for others. 

Maryam Irfan, Industrial Decarbonization Network: What are the key characteristics JPMorgan Chase observes in successful operators? 

Ben Ratner: Leadership from the top on decarbonization opportunities and risks is a key element. It's essential to understand that sustainability is about something much more than just compliance. It involves capturing operational efficiencies, strengthening competitive positioning, meeting stakeholder expectations, and effectively managing risks. 

Moreover, a sense of urgency in tackling the most actionable decarbonization solutions sets apart the most successful operators. For example, during my time at Environmental Defense Fund, I remember having a conversation with the senior management team of an E&P company about a pneumatics replacement campaign and they were able to dramatically accelerate the timeline and successfully complete the work, showcasing the power of urgency. 

Lastly, engaging stakeholders is vital. Recognizing that disagreeing on certain topics is inevitable, but finding common ground and progressing in other areas is a hallmark of operators who successfully navigate the complex stakeholder landscape. 

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Maryam Irfan, Industrial Decarbonization Network: What role do you, at JPMorgan Chase, play in supporting oil and gas operators achieve these goals? 

Ben Ratner: Decarbonization is one of the key topics on JPMorgan Chase’s agenda when engaging with senior management teams of clients in the oil and natural gas sector, a privilege we value. At a personal level, one of the reasons I chose to join JPMorgan Chase is the seat the firm has at the table to work with a range of  oil and gas clients at the forefront of the industry.

One way we support the industry is through our 2030 emission reduction targets that we have for JPMorgan Chase at the portfolio level for oil and gas, and now for a handful of other sectors. This speaks to the need to reduce emissions with a sense of urgency, something we actively assist our clients on, while recognizing that companies have different starting points.  

As for stakeholder engagement, different companies approach it with varying levels of proactivity, depending on factors such as their objectives, geographies, and philosophies on engaging policymakers, communities, and NGOs. However, this is an area where we offer our expertise and engagement to the industry and have had some constructive engagement. 

Another way we’re involved in the space is through our philanthropic investments to help bring future energy leaders into the fold. For example, we support the energy leadership development program, EnGen, which brings together emerging leaders across the energy sector in partnership with Rice and the Colorado School of Mines, among other leading organizations. Applications for the next cohort are open through mid-September.

Maryam Irfan, Industrial Decarbonization Network: Looking ahead, what challenges does the industry need to overcome in its efforts to transition to more sustainable practices? 

Ben Ratner: One thing I would highlight is something we’ve heard from clients in recent months. As methane regulations develop, it is important for frameworks to encourage technological innovation rather than hinder it. 

Currently, there are several companies at the forefront of deploying technologies for monitoring, detection, and measurement, such as drones, aircraft, and even satellites. However, regulatory regimes may not yet be fully equipped to understand and credit these efforts. While this isn't a new challenge, it is one the industry can proactively help solve with robust data on the environmental and economic benefits of efficient approaches. 

Maryam Irfan, Industrial Decarbonization Network: What are you most looking forward to at this year's Decarbonizing Oil and Gas Summit? 

Ben Ratner: Houston feels like coming home to me, given my days at Rice. I'm glad that the summit is in the fall, not the summer!  

But what I'm really looking forward to most is the people. Attendees at events like this are important partners to JPMorgan Chase and play such an important role in advancing decarbonization while keeping the lights on and the economy humming. So, it will be great to reconnect with old colleagues, meet new ones, and learn from the industry about the latest developments in oil and gas decarbonization. 

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