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Private equity drives methane pollution

August 17, 2023

Sustainability-focused nonprofit Ceres and the Clean Air Task Force released their annual Benchmarking Methane and Other GHG Emissions[1] report in May 2023. Of the over 300 oil and natural gas producers analyzed, 60% of the top 10 methane emitters by basin are private equity-backed. Portfolio companies backed by private equity firms Oaktree Capital Management and The Carlyle Group are the top three methane emitters, more than the more well-known actors like ConocoPhillips (see Table 1).

Methane is a significant contributor to global warming. In the first 20 years after its emitted into the atmosphere, it is more than 80 times more potent than carbon dioxide in trapping heat in the atmosphere[2] and accounts for 20 percent of global emissions.[3] Controlling methane is one of the cheapest and fastest ways to slow climate change.[4]

Table 1: 2021 Portfolio Company Methane Emissions by Basin

RankCompanyBasinCH4 (MT)PE Firm
1Caerus Oil & GasPiceance; Uinta62,057Oaktree
2Hilcorp Energy (Carlyle JV)San Juan50,384Carlyle
3BKV Operating (Oaktree JV)Fort Worth42,056Oaktree
5ConocoPhillipsGulf Coast35,206NA
6Diversified EnergyAppalachian34,206NA
7IKAVSan Juan31,453IKAV
8Civitas ResourcesDenver23,379Kimmeridge
9Endeavor Energy ResourcesPermian23,088NA
10Terra Energy PartnersPiceance



Kayne Anderson, Warburg Pincus


Note: Caerus Oil and Gas assets in the Piceance basin contributed 34,289 MT of methane and its operations in the Uinta basin contributed 27,768 MT of methane into the atmosphere. Given that Oaktree backed assets in both basins, the totals were combined.

Oaktree Capital Management, is a subsidiary of the larger Brookfield Asset Management, one of the world’s largest private equity and infrastructure firms.[5] Oaktree/Brookfield-backed Caerus Oil and Gas’ operations across two basins generated 62,057 metric tons (MT) of methane in 2021, more than any other company that year.  Carlyle’s joint venture with Hilcorp in New Mexico’s San Juan basin generated the second largest amount of methane in 2021. Another Oaktree/Brookfield portfolio company BKV Operating’s drilling assets in the Fort Worth basin (which Oaktree/Brookfield has backed since 2020) is the 3rd largest methane polluter.

Oaktree/Brookfield: A Top Methane Polluter
Although Oaktree Capital has an environmental, social, governance policy (ESG),[6] it has made no commitment to reduce its greenhouse gas emissions, which is essential to achieve progress in addressing climate change.[7] Oaktree’s/Brookfield’s backing of both Caerus and BKV Operating exposes its investors and impacted communities to over 104,000 MT of methane emissions in 2021, which is equivalent to the greenhouse gas emissions from nearly 600,000 gas-powered vehicles driven for one year.[8]

Caerus constitutes the bulk of those emissions and currently operates 7,400 wells in the Piceance and Uinta basins in Colorado and Utah and owns additional land to develop 5,300 more drilling wells – potentially further increasing its greenhouse gas emissions.[9] Caerus has amassed this dirty footprint by acquiring assets from publicly-traded companies such as ConocoPhillips, Occidental Petroleum, EOG Resources, and PDC Energy[10] and Oaktree’s/Brookfield’s partnership with BKV Operating facilitated its acquisition of Devon Energy’s assets in Texas’ Barnett/Fort Worth Shale[11] — both instances representing the transfer of emissions to less transparent private funds.

Aside from Oaktree/Brookfield facilitating the transfer of emissions from the publicly-traded companies to much more opaque private funds, it is also partnering with companies that have troubling environmental records. In 2020, Oaktree/Brookfield entered into a $1 billion partnership with Diversified Energy, the largest well owner in the United States. Diversified has a history of buying old, marginal wells in Appalachia that can often leak more methane gas than what is produced from each well – resulting in the company’s methane emissions ranked 6th based on Ceres/CATF’s data. These emissions are one of the dirtiest components of the nation’s energy system.[12]

Oaktree/Brookfield has enabled Diversified to expand its polluting operational model beyond Appalachia. In 2021, Oaktree/Brookfield provided funding to enable Diversified to acquire Tapstone Energy’s holdings in Oklahoma and Tanos Energy holdings in Louisiana and Texas[13] and together, assets in this Central Region represent 40% of Diversified’s total production.[14]

Carlyle’s Dirty San Juan Basin Legacy
The second most methane polluting assets are controlled by a joint venture between Hilcorp Energy and private equity firm The Carlyle Group in New Mexico’s San Juan Basin. Although Hilcorp has repeatedly been found to be the among the country’s largest methane polluters,[15] the assets under the five-year Carlyle-Hilcorp private equity joint venture,[16] between 2017 and 2021,[17] comprise nearly 63% of Hilcorp’s total methane emissions and 54% of total greenhouse gas emissions (see Table 2).

Hilcorp’s San Juan operations have come under fire from stakeholder groups and regulators. An investigation by Searchlight New Mexico found that half of Hilcorp’s wells are considered stripper wells – producing less than 15 barrels of oil a day – a fraction of what high-producing wells yield.[18] Recent studies show that that although these stripper wells produce a small percentage of the oil and gas on the market, they make up a disproportionate amount of the industry’s methane emissions.[19] Not only is Hilcorp a major polluter in the basin, but it has failed to adequately clean up some of its operations. Between October 2019 and September 2021, Hilcorp was fined nearly $1 million to settle allegations by New Mexico officials that the company failed to remediate six wells in the state.[20]

Table 2: Hilcorp Energy Methane and Greenhouse Gas Emissions Summary

Hilcorp Energy Summary Table
Hilcorp’s CH4 Emissions (2017-2021) Across All Basins636,440
Hilcorp’s CH4 Emissions (2017-2021) in San Juan Basin Only400,005
Carlyle-backed CH4 percentage63%
Hilcorp’s GHG Emissions (2017-2021) Across All Basins26,982,257
Hilcorp’s GHG Emissions (2017-2021) in San Juan Basin Only14,480,658
Carlyle-backed GHG percentage54%

Other private equity firms that have backed portfolio companies among the top 50 methane polluters in 2021, besides Carlyle and Oaktree, include, Kayne Anderson, Warburg Pincus, IKAV, Kimmeridge, Arclight Capital, NGP, GSO/Blackstone, Quantum Energy, Lime Rock Partners, Morningstar Partners, and Talara Capital.[21]




[1] Clean Air Task Force and Ceres, “Benchmarking Methane and Other GHG Emissions Of Oil & Natural Gas Production in the United States,” May 2023,

[2] Environmental Defense Fund, “Methane: A Crucial Opportunity in the Climate Fight,” Environmental Defense Fund, accessed June 28, 2023,

[3] US Environmental Protection Agency, “Importance of Methane,” Overviews and Factsheets, Global Methane Initiative, January 11, 2016,

[4] Ilissa B. Ocko et al., “Acting Rapidly to Deploy Readily Available Methane Mitigation Measures by Sector Can Immediately Slow Global Warming,” Environmental Research Letters 16, no. 5 (May 2021): 054042,; Zachary R. Mider and Rachel Adams-Heard, “An Empire of Dying Wells Is Cooking the Planet and Making One Man Very Rich,” Bloomberg.Com, October 12, 2021,

[5] Oaktree Capital Group, LLC, “Brookfield Asset Management Completes Acquisition of 61.2% of Oaktree Capital Management,” September 30, 2019,

[6] Oaktree Capital Group, LLC, “Oaktree Capital Management ESG Policy,” December 2022,

[7] Americans for Financial Reform Education Fund and Private Equity Stakeholder Project, “Private Equity Climate Risks Scorecard,” September 2022,

[8] OAR US EPA, “Greenhouse Gas Equivalencies Calculator,” Data and Tools, August 28, 2015,

[9] Caerus Oil and Gas, “Operations,” Caerus Oil and Gas, July 11, 2023,

[10] Caerus Oil and Gas, “About,” Caerus Oil and Gas, July 11, 2023,

[11] BKV, “Oaktree Invests $100 Million, Pledges Additional $600 Million to BKV,” BKV Corporation, December 16, 2020,

[12] Jacob A. Deighton et al., “Measurements Show That Marginal Wells Are a Disproportionate Source of Methane Relative to Production,” Journal of the Air & Waste Management Association 70, no. 10 (October 2, 2020): 1030–42,

[13] Diversified Energy, “Diversified Energy Completes Tapstone Acquisition,” Diversified Energy Company PLC, December 8, 2021,; Diversified Energy, “Diversified Energy Announces Conditional Acquisition With Oaktree Participation,” Diversified Energy Company PLC, July 5, 2021,

[14] Diversified Energy, “Corporate Presentation,” May 2023,

[15] Josh Eisenfeld, “EPA, Don’t Give Hilcorp a Free Pollution Pass,” Earthworks, August 19, 2022,

[16] Carlyle Group, “Hilcorp and Carlyle Form Partnership to Acquire North American Oil and Gas Properties,” December 18, 2015,

[17] Megan Starr to Jim Baker, “For Review: Private Equity Climate Scorecard,” September 9, 2022; Hilcorp, “Hilcorp Affiliate to Acquire San Juan Basin Assets from ConocoPhillips,” April 13, 2017,

[18] Lindsay Fendt, “Diminishing Returns,” Searchlight New Mexico, May 11, 2022,

[19] Mark Omara et al., “Methane Emissions from US Low Production Oil and Natural Gas Well Sites,” Nature Communications 13, no. 1 (April 19, 2022): 2085,

[20] Michelle Lujan Grisham et al., “Energy, Minerals and Natural Resources Department,” EMNRD’s Oil Conservation Division settles enforcement action with Hilcorp Energy Company for failing to remediate unauthorized releases and not meeting the written operational and reporting conditions of approval, January 6, 2022,

[21] Private equity ownership was confirmed by reviewing portfolio company websites, news coverage, press releases, and regulatory filings.

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