Hyperscalers’ capital expenditure forecasts show a split between expanding and maintaining data center (DC) capacity, with upkeep costs quickly outpacing growth spending. Computer chips on a five-year replacement schedule cost about $27 billion/GW of IT at the leading edge. Enverus Intelligence® Research’s new capacity expansion report analyzes trends in DC development in the L48, projecting capacity buildout over the next decade.
We predict the increase in power capacity, coupled with chip performance improvements will lead to a 33x surge in total compute by 2035. The results of this rise can be seen through efficiency and performance gains in various large language models. Meta’s Llama 3.1 seventy billion (70B) achieved 83% on the massive multitask language understanding (MMLU) benchmark, at a 99% discount compared to OpenAI’s GPT-4. Soon after, DeepSeek’s R1 model cut costs by 97% within only two months of GPT-o1’s release, achieving higher than 90% on the MMLU benchmark.
Research Highlights
Long-Term Load Forecast – The Data Center Decade : This report encompasses Enverus Intelligence® Research’s view on how exponential load drivers will impact our power demand forecasts from 2025-2050.
Hyperscaler Expansion – Stepping Onto the Capex Treadmill : This report provides a refreshed L48-level view on expected growth in data center capacity and associated power demand with a focus on understanding hyperscaler capital programs.
Reshoring Revival – Powering U.S. Industry : This report examines the impact of manufacturing load resulting from increased domestic manufacturing driven by demand, tariffs and production economics. We also explore regional load growth variations influenced by infrastructure and adoption trends, the impact of recent legislation and tax credits on manufacturing, and the comparative economics of imports versus domestic production.
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.
In the fast-paced world of energy trading, timing is everything. Market dynamics can shift in a heartbeat, and being able to spot opportunities quickly makes all the difference. For a European multinational energy corporation (MEC), staying ahead was a daily struggle—until they decided to break free from their cumbersome legacy ETRM system. The result?
Faster trades
Increased profitability
A newfound sense of control in an otherwise volatile market
The Challenge: Flying Blind in Global Energy Markets
The energy market is a high-stakes game. Traders are under constant pressure to make quick, profitable decisions—but for this MEC, a legacy ETRM solution was hindering that agility. Despite being armed with a wealth of datasets from exchanges, market research and news sources, traders found themselves drowning in the manual task of curating data. Worse still, their outdated technology couldn’t integrate with third-party data sources properly, leaving them with missing pricing information at the most critical times. Simply put, they were flying blind when it came to building accurate curves and identifying market anomalies.
Traders were spending more time managing data than analyzing it, and every minute spent chasing data was a missed opportunity to act.
Want to read the full story on how this MEC upgraded their entire trading analytics solutions?
The Solution: Trade-Ready Data, Streamlined Workflows
Enter Enverus Trading and Risk Solutions, the game-changing suite that empowered the MEC to leave their data struggles behind. By modernizing their trading and risk management operations with our cloud-native, multi-tenant platform, they gained access to more than 400 data vendors—including trusted names like Platts, Argus and APPI.
MarketView® consolidated the data they needed into one easy-to-use platform, simplifying their ability to build profitable forward curves. Our customized analytics (Bollinger Bands, moving averages, etc.) and Excel integrations transformed their workflow, enabling them to trade faster, smarter and with far more confidence.
Today, we celebrate a milestone. MarketData 2.0 wasn’t just a project; – it was a vision. A vision to transform how we access and act on market data…. MarketData 2.0 redefined our capabilities: real-time access to market data, seamless integration across platforms and a scalable infrastructure to fuel the future. This wasn’t just an upgrade; it was empowerment. The road wasn’t without challenges: integrating complex systems and evolving requirements. But those challenges taught us the value of flexibility, collaboration and focus lessons we’ll carry forward. This success belongs to the team. Their drive and determination made it happen. To our stakeholders, your trust and input were the backbone of this journey. MarketData 2.0 is more than a project; it’s a foundation. Let’s build on it.
João | Digital Systems & Data Manager | European Energy Company
*MarketData 2.0 is an internal project that involved the full adoption of Enverus Trading and Risk solutions.
Optimizing Trades and Driving Profitability
With the reliable, real-time data delivered by MarketView, the MEC saw immediate improvements. Gone were the days of delays and missed opportunities due to manual data entry. MarketView’s symbol tree allows traders to find the data they need in seconds—no more wasted time on repetitive tasks. And, with seamless API integrations and Python connectors, the MEC could extend MarketView’s insights across their custom workflows, further enhancing their trading strategies.
Our dedicated T&R support team ensured they never faced a roadblock without quick resolution, providing critical assistance at all times, from market data challenges to workflow integrations.
The Result: A Platform for Performance and Scalability
Enverus Trading and Risk Solutions didn’t just replace the MEC’s legacy ETRM system—it became a strategic advantage. Today, the MEC views MarketView as more than just a tool; it’s a platform that empowers their trading and risk teams to make better, faster decisions. With insights from hundreds of sources and seamless integrations into their existing tools, MarketView helps them unlock new opportunities in the global energy market.
Learn how Enverus Trading and Risk Solutions can help upgrade your entire trading organization
Navigating the complexities of energy markets amid geopolitical instability and price volatility is no small feat. But for this MEC, the transition to MarketView was more than just an upgrade. It was a complete transformation that turned data management into a competitive advantage, helping them stay ahead of the curve, spot opportunities in real time, and make smarter, more profitable trades.
For any trading and risk team, data management is not just about handling numbers; it’s about shaping your strategy. With MarketView, you can empower your team to unlock more profitable analysis, accelerate decision-making and transform uncertainty into opportunity, just like our client did.
Ready to transform your trading strategy? Contact Enverus today to learn how Enverus Trading & Risk solutions can streamline your data and fuel your success.
With $28 billion in clean fuels M&A since 2021, the sector has outpaced all other carbon innovation categories combined. However, the industry sits at a crossroad as an increasing supply of low-carbon fuels exerts downward pressure on U.S. credit prices, fundamentally reshaping market dynamics. In our inaugural Clean Fuels Fundamentals, Enverus Intelligence® Research (EIR) examined how industry participants can adapt to these shifts, building more resilient business models to sustain long-term value creation amid evolving market forces.
Figure 1 highlights various fuel types and their production pathways to triangulate corresponding revenue impacts. Utilizing low-carbon intensity (CI) feedstocks such as animal waste can significantly enhance revenue streams from 45Z and Low Carbon Fuel Standard credits, as these incentives are directly tied to CI scores. We also analyzed emerging trends in M&A activity, benchmarking transaction valuations against EIR’s bottom-up assessments to provide deeper insights into market pricing and strategic positioning.
Other key findings include:
Renewable natural gas (RNG) dominated North American transactions, comprising half of all deals and commanding valuation multiples more than five times higher than biodiesel, renewable diesel (RD) and ethanol.
Technology stacking has become a critical lever, allowing developers to layer credit mechanisms and boost revenues by up to 15 times baseline market prices.
When used as a feedstock for blue hydrogen, landfill RNG delivers an 86% net incremental uplift to RD returns – implying that fully committing this fuel would require 144% of projected 2030 landfill gas volumes to meet RD demand.
Clean Fuels – Strategies for a Resilient Future – The clean fuels industry is at a critical juncture. An influx of low-carbon fuels has put downward pressure on U.S. credit prices, reshaping the economic landscape of the sector. This presentation explores how stakeholders can navigate these dynamics and develop more resilient business models to create sustainable value in the face of changing market conditions.
The Trump Effect – Power & Renewables Outlook – As the Donald Trump Administration advances its energy agenda, the power and renewables sector faces shifting trade policies, executive orders and varying levels of federal support for renewable energy. The declaration of an energy emergency, pause on offshore wind projects and promises to “drill, baby, drill” will reshape domestic and global markets. This presentation examines recent market changes and White House announcements affecting power generation and investment, including new tariffs, canceled DOE disbursements and halted offshore wind leasing.
Class VI Update 4Q24 – The Wave Is Coming – In this new quarterly report series, Enverus Intelligence® Research provides an overview of recent changes and additions to the growing list of Class VI wells associated with CCS project in the U.S. Leveraging the Enverus FOUNDATIONS® – Carbon Innovation Wells database, this report series covers new Class VI applications, changes to permit status, permit approvals and newly disclosed project details. In this inaugural report, we cover updates in 4Q24 as well as highlights from 2024.
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.
CALGARY, Alberta (Feb. 19, 2025) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report on net load trends in the Lower 48 states. The report highlights the growing integration of renewable energy across independent system operators (ISOs) and the importance of dispatchable assets in meeting demand. As reserve margins evolve, batteries are emerging as essential for maintaining grid reliability.
“Batteries are becoming increasingly crucial for reliability in order to meet future net load requirements,” said Juan Arteaga, senior associate at EIR. “Due to increased penetration of renewable generation across the Lower 48 states, annual positive net load amounts decrease substantially.”
“We find that reserve margins are trending closer to the North American Electric Reliability Corporation (NERC) recommended reserve margin’s floor in some regions, calling for greater dispatchable capacity buildout,” Arteaga said. “Batteries, which play a key role in reserve margins, are crucial to help maintain reserves to adequate levels. Accelerated battery buildout must occur to keep reserve margins in check and to meet net load.”
Key takeaways from the report:
Renewable energy generation and battery deployment across the Lower 48 states must speed up to keep pace with load growth and address declining reserve margins.
Annual net load in the Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO), where wind and solar energy installations are prevalent, is expected to decrease by 82% and 65%, respectively, by 2050.
The increase in renewable energy development ahead of load growth in the Pennsylvania-New Jersey-Maryland (PJM), WEST, Southeast (SE) and ISO New England (ISO-NE) lead to a parabolic trend in annual positive net load, with declines up to 56% by 2039 before rebounding to 2024 levels.
Retiring coal plants and slow storage growth, combined with rising demand, will shrink reserve margins to 14% in SPP, 27% in MISO and 30% in the New York ISO (NYISO) by 2039. We predict the Electric Reliability Council of Texas (ERCOT) reserve margins, propelled by battery installs and natural gas additions, will reach 142% by 2032. The California Independent System Operator (CAISO) will rise to 118% by 2050, supported by solar and battery growth.
EIR expects all regions to update their market designs, placing a strong emphasis on reliability-focused markets, including ancillary services and capacity markets.
You must be an Enverus Intelligence® subscriber to access this report.
About Enverus Intelligence® Research Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
In the ever-evolving landscape of oil and gas, staying ahead of OFS pricing trends is crucial for maintaining profitability and operational efficiency. In January, we hosted a webinar titled “Navigating 2025 OFS Pricing Trends With Simplified Sourcing,” which delves into the key trends expected to shape OFS prices in 2025. This blog will highlight three significant trends discussed in the webinar and provide actionable insights on how you can leverage these trends to protect your bottom line. Be sure to watch the full webinar replay for an in-depth analysis on pricing trends for 2025 and how you can protect your bottom line using Enverus RFx, our new AI-powered sourcing solution for oil and gas companies.
Trend 1: Tariffs Under Trump Impacting OCTG
Steel tariffs, particularly those originally implemented under the Trump administration’s amendments to Section 232 in 2018, had a profound impact on the pricing of oil country tubular goods (OCTG). These tariffs, which impose a 25% duty on imported steel, have historically driven up costs for OCTG, a critical component in drilling operations. After >18 months of price declines, we expect OCTG prices have bottomed with tariffs being a catalyst for price increases throughout 2025.
Looking Back and Planning Ahead: Impacts of Section 232 in 2018 and Implications for 2025:
Increased steel prices: Steel prices and pipe PPI increased by about 30% due to the more aggressive tariff policy during the first Trump administration. Expect further price increases on OTCG to the tune of ~10% in 2025, according to Enverus Intelligence® Research analyst, Mark Chapman.
Possible supply chain disruptions: Tariffs can cause supply chain disruptions, leading to delays and increased costs for sourcing OCTG.
Mitigation Strategies:
Consolidate suppliers: Consolidating your supplier base brings a few benefits, including being able to negotiate better prices due to higher volume orders, simplifying your procurement processes, and streamlining your accounting and reporting.
Long-term contracts and renegotiations: Lock in prices through long-term contracts with suppliers to hedge against future price increases. Doing a scan of market rates for key goods can also help you renegotiate more favorable prices. Enverus RFx can help you with both of these strategies.
Trend 2: Market Dynamics and Pricing Stability in Proppant and Chemicals
In 2025, the proppant market is coming off a significant price erosion during the previous year due to oversupply (especially in the Permian), while innovations like conveyor belt systems and mobile mines lower the production cost of the proppant. In the chemical market, prices in 2025 will be driven by elevated feedstock costs such as propane and natural gas and exposure to tariffs, while efficiency gains in fracturing operations will increase demand and contribute to pricing strength.
Looking to 2025: Opportunities to Save on Proppants, But Chemicals to Rise:
Proppants: Proppant prices eroded by about 3% in the Permian during 2024 due to oversupply. Enverus Intelligence® Research predicts that soft prices in proppants will continue into 2025.
Chemicals: Chemical prices will be affected by a few factors. First, feedstocks like propane and natural gas are likely to prop up chemical prices during 2025. Second, efficiency gains in fracking operations are great for well costs but will keep chemical demand robust. Both factors will lead to an increase in chemical prices during 2025 in the neighborhood of 5%.
Trend 3: Efficiency Gains to Offset Cost Increases into 2025
Last year, the industry saw significant market corrections in OCTG and the drilling and completion markets, efficiency gains in drilling, and a continued shift to super spec rigs. Overall, advances in technology and operational practices are enabling companies to achieve more with less, driving down costs and improving performance while also increasing competition.
Efficiencies to Keep Well Costs Flat:
Drilling and pressure pumping efficiencies: During 2024 rig rates decreased by about 10% and pressure pumping experienced a 5% efficiency gain. These trends are expected to stay flat during 2025.
Super-spec rigs: Super-spec rigs are in high demand due to their advanced capabilities and efficiency. This consistent demand helps maintain stable pricing, as operators are willing to pay premium rates for these rigs.
How You Can Take Control of Your Costs in 2025
With OCTG and chemical prices expected to rise in 2025, it’s crucial that you find the right suppliers at the right price. To do this, empowering your team with the right tools makes all the difference. This is where Enverus RFx comes into play. It’s a powerful, lightweight sourcing solution designed to provide price savings, connect you with vetted suppliers and offer greater visibility into your spend.
See for Yourself With a Free Self-Serve RFx Product Tour
Explore our free click-through demo to discover how RFx allows you to create bids in seconds, find the best value from a wide range of vetted suppliers while ensuring compliance and without sacrificing the speed required for your operations.
By integrating Enverus RFx into your sourcing strategy, you can effectively manage market fluctuations, secure better OFS prices, and enhance your overall operational efficiency. Operators have already started saving using RFx. In fact, one operator in the Permian saved 35% on chemicals, while another in the Eagle Ford saved $1M.
Better yet, click below to watch the webinar and get the full story on OFS pricing in 2025, and how using a made for oil and gas sourcing solution can help you manage your costs.
Investment advisory products and services provided by Enverus Intelligence® Research, Inc. Visit www.Enverus.com/disclosures for additional information.
MADRID, Spain (Feb. 18, 2025) — RatedPower, a part of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released its 2025 Global Renewable Trends Report. The report explores the fundamental challenges, trends and successes across the renewables landscape through the eyes of more than 140 industry professionals surveyed. Included is a breakdown of RatedPower user statistics, which sheds light on the most popular design trends across the platform.
The results revealed resolute confidence in the future of renewables, with storage, solar and green hydrogen as key growth areas over the next five years. According to the respondents, the U.S., China, Australia, Brazil and India comprise the top five countries with the highest renewable growth potential. Also cited were pivotal driving factors such as the combination of governmental buy-in, strong economic incentives and favorable geographic locations.
The survey also asked respondents to share their views on the sector’s principal challenges. Grid saturation and instability (60.1%),and permitting and regulation (49.7%) rose to the top of the list. This mirrored the top two challenges from last year, but the percentage for both dropped by approximately 6%, respectively, highlighting some perceived potential for improvement in these areas.
In response to the survey, RatedPower customer Diego Lobo-Guerrero Rodriguez from SENS – Iqony Sustainable Energy Solutions commented on the immense impact that AI, machine learning and digitalization trends will have on the industry. “I expect many steps forward towards a faster development of technologies and services, but doing it safely is critical,” he said. He also emphasized the need for the industry to be prepared for how “energy demand will increase heavily” from the surge in new data centers.
Respondents also shared their view on how storage technology, such as battery energy storage systems, and alternate renewable deployments such as agri-PV, floating solar and offshore wind, can be maximized. A common theme that emerged across all these areas was the implementation of supportive policies, incentives and more streamlined processes.
Key data takeaways from the report:
93.7% of respondents rated their confidence in the industry’s future as either four or five out of five.
60.1% of those surveyed stated that grid saturation and instability was the critical challenge facing the renewables industry, down from 66.7% last year.
48.3% stated that storage has the most significant growth potential over the next five years, with solar in second at 30.8%.
Bifacial modules continue to dominate simulations, being the chosen module in over 91% of simulations in all four quarters of 2024. Bifacial modules accounted for 94.46% of simulations in 4Q24, a record high.
Hybrid plants have made up between 11% and 28% of simulations through all four quarters of 2024.
More than 60% of simulations in 2024 have used string inverters. This upward trend has been tracking for the last few years. Central inverters are still more popular in simulations of plants with peak power of 100 MW or more.
“It has been a pleasure to produce the report for five years running. Over that time, we have seen substantial change, not just across the industry but also in technology’s power to transform the solar design process. Even though there are uncertainties and critical challenges to overcome, we’re energized by the possibilities ahead and are proud to be part of the transformative path to a greener future,” said Andrea Barber, VP of Power & Renewables at Enverus and co-founder of RatedPower.
Media Invite: RatedPower is inviting members of the media to PULSE, an international gathering of professionals across the whole renewable energy value chain — from world-class utilities to developers, engineering, procurement, construction contractors and asset management. This year’s conference will be held April 3-4, 2025, in Espacio COAM, Madrid. Members of the media with questions or looking to obtain a media registration code for PULSE should email [email protected].
About Enverus Enverus is the most trusted energy-dedicated SaaS company, with a platform built to maximize value from generative AI, offering anytime, anywhere access to analytics and insights. These include benchmark cost and revenue data sourced from more than 95% of U.S. energy producers and more than 40,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing. Our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.
About RatedPower RatedPower helps companies discover the smartest ways to design and engineer utility-scale solar PV plants and maximize their potential through their software to automate and optimize the study, analysis, design and engineering of photovoltaic plants and their electrical infrastructure in all its stages. RatedPower has helped design more than 55 TW in more than 160 countries. Bringing value to developers, IPPs, contractors, investors and manufacturers, helping them make better decisions, democratizing engineering knowledge and boosting the deployment of solar plants worldwide. Learn more at RatedPower.com.
As the energy landscape continues to evolve, grid congestion is becoming increasingly difficult to predict. With rapid additions of new generation and load projects, traders face growing uncertainty and rising risks in the market. The challenge lies in understanding where these projects will connect, when they’ll become operational, and how they’ll impact transmission constraints. Enter Projected Capacity Impact—a game-changing solution designed to provide clarity and actionable insights into future grid dynamics.
The Rising Pressure of Future Generation and Load
The influx of renewable plants, energy storage facilities and large load centers, such as data centers and crypto mining operations, is creating significant pressure on transmission networks. Blind spots in future grid capacity planning can lead to unforeseen transmission constraints, which impact trading strategies and lead to costly errors. For market participants, the lack of visibility into these future developments often results in missed opportunities and increased risk exposure.
Identifying Potential Grid Congestion With Projected Capacity Impact
Navigating future grid dynamics requires a forward-looking approach. Projected Capacity Impact provides traders with powerful insights to anticipate and manage emerging congestion risks driven by new generation and load projects, empowering traders to make more informed decisions to capitalize on opportunities and mitigate threats.
1. Track Planned Generation and Load
Enverus offers the most comprehensive data coverage and leads the market in tracking load, renewables generation, outages and congestion.
Gain a comprehensive understanding of the future grid landscape by analyzing planned generation and load projects, along with their associated metadata. By tracking these developments and reviewing their placement in interconnection queues, traders can assess how they will influence future congestion risks. With the ability to filter projects by various factors—such as location, size and timeline—traders can create custom scenarios that provide targeted, high-value insights into how the grid will evolve and where congestion risks are most likely to emerge. This detailed foresight helps traders plan for changes and adapt strategies to potential shifts in market conditions.
2. Simulate Future Grid Congestion
Enverus empowers traders to simulate the future grid 15x faster than traditional methods, providing deeper insights and uncovering the best opportunities across more grid segments.
Projected Capacity Impact allows traders to evaluate the cumulative effects of planned generation and load projects on grid constraints. By running multiple simulations, traders can model different scenarios and assess their impact on congestion across various points of the grid. This provides a detailed, dynamic view of where congestion hotspots may develop in the future. By understanding the interaction between projects and the grid, traders can predict not only when but also where constraints are most likely to occur, giving them a strategic advantage to anticipate market shifts and mitigate potential risks well ahead of time.
3. Assess POI Transfer Capability and Future Congestion Hotspots
Enverus enables traders to visualize grid capacity limitations, allowing them to focus on areas with a higher likelihood of congestion and pinpoint the most promising opportunities.
Evaluate the capacity at key points of interconnection (POIs) to understand how the grid’s capacity is being impacted by upcoming projects and large load centers, such as data centers or industrial sites. By visualizing how these changes will affect grid capacity, traders can identify areas of the grid that are nearing capacity limits. This forward-looking analysis is crucial for traders to proactively adjust their FTR strategies and develop more effective hedging approaches. With the ability to spot potential congestion hotspots early, traders can make adjustments to their positions, optimizing their trading decisions to capitalize on impending shifts in the grid’s load and generation balance.
Why Choose Projected Capacity Impact?
Mapped Projects to State Estimator Cases
Projected Capacity Impact precisely maps planned generation and load projects to ISO state estimator cases, saving traders time and resources of having to map projects to state estimator cases themselves.
Comprehensive Energy Market Insights
The solution offers an up-to-date centralized dataset covering renewables, storage, traditional power plants and large load centers. This holistic view supports strategic trading decisions and helps market participants respond effectively to energy market shifts.
Visualize and Simulate Future Grid Congestion Scenarios
Traders can visualize and simulate the effects of planned projects on grid constraints. By running various scenarios, they gain a detailed understanding of potential future congestion, enabling proactive adjustments to trading strategies.
Conclusion
As grid continues to evolve and new projects are being added to the grid, Projected Capacity Impact delivers a critical edge by illuminating future congestion hotspots and empowering traders to stay one step ahead. With unparalleled visibility into upcoming generation and load projects, market participants can reduce risk, optimize trades and seize new opportunities ahead of the competition. Unlock the full potential of your trading strategies and navigate grid complexities with confidence through Projected Capacity Impact.
About Enverus Power & Renewables
With a 15-year head start in renewables and grid intelligence, real-time grid optimization to the node and unparalleled expertise in load forecasting that has outperformed the ISO forecasts, Enverus Power and Renewables is uniquely positioned to support all power insight needs and data-driven decision-making. More than 6,000 businesses, including 1,000+ in electric power markets, rely on our solutions daily.
Enverus Intelligence® Research (EIR) provides an overview of recent changes and additions to the growing list of Class VI wells associated with CCS projects in the United States. CO2 sequestration via Class VI wells nearly tripled in 2024, rising from 0.74 Mt to 2.1 Mt. This increase represents only 0.05% of the total 4.7 Gt of U.S. CO2 emissions. In 2024, 33 Class VI permit applications were received, a decrease from 42 in 2023. We expect the number of applications to remain steady and anticipate around 100 new Class VI wells throughout 2025.
Based on active Class VI injection wells and estimated approval timelines, EIR projects a significant increase in CO2 injection by mid-2026. Total Class VI sequestration could exceed 120 Mtpa by the end of 2026, representing a nearly 60x increase over 2024 volumes.
About Enverus Intelligence®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. See additional disclosures here.
Tax season can be daunting for everyone, but for mineral and royalty owners, the complexity is even greater.
Whether you’re an individual collecting mailbox money or managing multiple royalty streams, navigating the intricacies of tax filings is crucial to maximizing your savings. The challenge lies in timely filing with the IRS while ensuring you’ve made every qualifying deduction to minimize your tax liability and avoid overpaying Uncle Sam.
While mineral and royalty owners may be familiar with some of the most common types of deductions – like the depletion allowance, property taxes or intangible drilling costs – we’ve compiled five mineral taxation strategies that provide additional money-saving insights and deductions you may not have benefited from. If you’ve missed taking a deduction on this list in previous years, it could be worth talking with a tax professional about amending your prior tax returns to get a refund.
From Depletion Allowance to Intangible Drilling Costs – Top Mineral Rights Taxation Tips to Save Oil and Gas Investors Money
1. Verifying Income Reported on a 1099
Accounting mistakes are inevitable in a complex and fast-paced business such as oil and gas production and often compound over time. Underpayments from operators who intend to honor their obligations to interest owners can occur for many reasons, such as rounding errors on your interest decimal or incorrect commodity pricing used to calculate revenue. Or mineral and royalty owners might be charged an improper deduction or fail to be paid on a well they did not know had been drilled.
For oil and gas interest owners with multiple revenue streams, ensuring the accuracy of what operators report on 1099s begins with ongoing due diligence and audits throughout the year. Many of the puzzle pieces needed to create a clear picture can be found in public data sources where drilling permits and production volumes reported to the state by operators are freely available. Then, compare what operators report on monthly revenue statements with 1099 forms.
Though finding and fixing underpayments is daunting, technology can simplify and accelerate the process by accessing bulk downloads and automatically verifying pricing, decimals and wells. You should be paid to leverage web-based solutions and check stub data exchanges. That’s where purpose-built mineral management tools like MineralSoft® and EnergyLink® from Enverus can assist in managing your assets, resolving operator underpayments and curing your yearly tax return headache.
2. Reducing Taxable Income With the Depletion Allowance
Oil and gas investments not only generate steady revenue streams for interest owners, but this asset class also benefits from a substantial federal income tax deduction that recognizes the underlying resource is depleting over time, causing reduction in the asset’s value. The depletion allowance enables mineral and royalty owners to take a 15% deduction on the lesser two options of either 100% of their royalty revenue without the depletion deduction or 65% of all income sources without the depletion allowance applied.
One advantage of the 15% depletion allowance is that it allows a mineral and royalty owner to capitalize more than 100% of the cost of their investment. Interest owners may be rewarded with a significantly higher deduction if they are willing to take extra steps to calculate the actual cost of their investment to be depleted instead of using the one-size-fits-all 15% per year deduction. Royalty owners can take the cost depletion if it exceeds the 15% depletion allowance. However, the calculations require a nuanced understanding of the remaining reserves.
Unlike the 15% depletion allowance, the cost deduction can never exceed 100% of the initial investment over the life of the well. In either case, only royalty income can be used with the depletion allowance, which excludes lease bonuses. Again, technology and purpose-built mineral management solutions can significantly simplify and automate the accounting required to perform cost depletion calculations.
3. Avoid Capital Gains Tax With a 1031 Exchange
Unless you have sold mineral or royalty interests within the last 45 days, keep the IRS section 1031, like-kind exchange, in mind for next year’s tax return. The 1031 exchange is a powerful tool to avoid hefty capital gains tax on your sale by investing the entire proceeds into another asset, deferring tax until the new asset is sold. Of course, owners can continue to kick the capital gains down the road with another 1031 exchange each time they sell a qualifying asset.
The IRS views mineral and royalty interests like real estate, which enables asset sellers to reinvest into homes, investment property, land and other mineral or royalty investments. Be sure to follow the rules carefully, which include identifying the replacement property in writing within 45 days, placing proceeds in escrow, and closing on the new investment within 180 days.
4. Fair Market Value for Property Taxes
Most states view your mineral and royalty interest just like real estate, appraise its value, and charge an ad valorem tax (i.e., property tax). Just like you might consider protesting a steep increase to your home’s value and property tax liability by a tax assessor-collector, oil and gas interest owners should understand their asset’s fair market value to challenge property tax increases when necessary. In turn, you’ll avoid overpaying property taxes and then deduct the expense on your annual federal income return.
The appraised fair market value of minerals and royalties is calculated differently from state to state (e.g., Texas uses discounted cash flow analysis based on future production forecasts, not past performance).
Individual mineral and royalty owners can turn to an oil and gas consultant for a third-party estimate of their assets, or leverage web-based services, such as Texas Mineral Appraisals from Enverus, for defensible, trusted data that you can submit to your appraisal district as part of a property tax protest. For mineral funds and more prominent royalty owners with a deeper level of oil and gas experience, turn to Enverus PRISM® and Forecast Studio to create your own forecasts to avoid overpaying property tax. You can also create go-forward portfolio strategies, acquisitions and cash flow.
5. Intangible Drilling Costs – A Huge Deduction for Working Interest
Drilling a well is one of the most tax advantaged types of investment, incentivizing oil and gas development with several major deductions and exemptions. For those who hold a working interest in a well, 100% of the Tangible drilling costs can be deducted over a 7-year depreciation period. tangible drilling costs include all equipment required to construct the well, such as casing, cement and wellheads.
Ranging from 65% to 80% of a well’s price tag, intangible drilling costs account for the lion’s share of drilling and completing a well. Intangible drilling costs include labor, pad clearing, rig rental, hydraulic fracturing and consumables like drilling mud and frac fluids. Unlike tangible drilling costs, intangible drilling costs can be fully deducted on a single tax return.
There is no limit on these drilling cost deductions. And because intangible drilling costs are exempt from the Alternative Minimum Tax, the deduction can be taken even for the wealthiest investors and significantly offset their personal income.
Reclaim your valuable time this tax season with Enverus Mineral Management Solutions.
As a new, oil and gas friendly federal administration takes office, the regulatory and tax landscape is likely to evolve. As ever, Enverus is keeping a finger on the pulse of change to bring mineral and royalty owners more money-saving strategies.
Managing mineral assets and taxes can be challenging, but Enverus is here to assist you. Our comprehensive mineral management solutions simplify the process of collecting and managing data for your mineral assets. With features designed to track deductions, verify income and streamline reporting, we make tax preparation more manageable and help you retain more of your earnings. Discover how Enverus can revolutionize your mineral management today and make filing your taxes this season a breeze. Please fill out the form below to speak with our experts.
CALGARY, Alberta (Feb. 12, 2025) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing a report that analyzes recent inventories of drilling uncompleted wells (DUCs) and the implications for 2025 budgets. DUCs provide operators with strategic flexibility, financial benefits, and operational efficiency, making them a crucial aspect of the industry’s dynamics. EIR’s report also examines differences between EIR’s DUC estimates and those of the Energy Information Administration (EIA).
“Operators are entering into 2025 with lower DUC inventory numbers than they entered 2024, creating potential for impacts to capital efficiency throughout the year,” said EIR principal analyst and report co-author Mark Chapman.
“DUCs act as a form of inventory and when market conditions are favorable, such as higher winter gas prices, companies can quickly complete these wells to boost production and capitalize on the higher prices, providing a tailwind early in 2025.” Chapman said.
Key takeaways from the report:
The number of drilled uncompleted wells (DUCs) in the last year fell faster than the drop in drilling rigs, indicated the backlog of such wells is declining. This has implications for energy companies’ 2025 forecasts on production and capital efficiency.
The Midland Basin depleted its inventory of excess DUCs the most over the past year, falling from two months to one.
A few gas producers bucked the industry trend and managed to increase total DUC inventories by more than one month since last year.
EIA estimates of DUCs have become increasingly misaligned with EIR’s calculations, which we suspect largely reflects differences in the granularity and timeliness of data sources.
You must be an Enverus Intelligence® subscriber to access this report.
About Enverus Intelligence® Research: Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
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