Sustainability and low-carbon transition toward US oil and gas companies’ efficiencies

A global imperative for climate change has constrained a fundamental shift in the energy sector towards sustainable and low-carbon practices. The important first step towards sustainability involves assessing the environmental and operational efficiency and sustainability of companies. This study uses a true fixed-effect model to analyse operational and environmental efficiency for 53 oil and gas companies during 2000–2022 in United States. This study also explores the impact of U.S. energy transition policy on the OGCs’ efficiency, considering the US administrations' contradictory priorities regarding sustainability and low-carbon transition policy. The findings reveal a convergence in the level of operational and environmental efficiency, with similar trends and reduced gaps over the study period, except in crises periods, as both influenced by economic activity levels and the Covid-19 pandemic. The results highlight a discernible trend among U.S. OGCs towards reduced CO₂ emissions in recent years. Moreover, the research indicates that U.S. energy transition policy and increased power generation from new renewables capacity, primarily wind and solar, contribute to promote environmental efficiency.