Application Season: How To Prepare Yourself For ApplicationsDecember 9, 2023
What to consider before firing the CEO of a major technology companyDecember 11, 2023
METHANE EMISSIONS: A FOCAL POINT AT COP28
During the recent COP28, a significant focus was placed on methane emissions, particularly from the oil and gas industry. The Biden administration has finalised a rule to heavily cut the US oil and gas industry’s methane emissions. The US Environmental Protection Agency also played a crucial role in rolling out these mandates, primarily targeted at the oil and gas sector.
The rule aims to crack down on methane leaks from industry in several ways. Companies are now required to inspect and repair equipment leaking methane regularly. Furthermore, they must also implement a phased ban on gas flaring at oil wells.
Not only does this bold move by the US impact the environment, but it also has the potential to establish international standards for climate policy.
Furthermore, 50 major oil and gas companies, including Exxon and Saudi Aramco, have committed to significantly reducing their methane emissions by 2030. This pledge, announced at the COP28 climate conference, aims to lower methane intensity within the 80% to 90% range.
According to the most recent IPCC report, methane is the main component of natural gas, contributing roughly 18% of all greenhouse gas emissions from the world’s energy supply. Methane is also a potent greenhouse gas that significantly contributes to climate change.
It is more effective at trapping atmospheric heat than carbon dioxide, making its control critical in the short-term battle against global warming. It is over 80 times more potent over 20 years, making methane a crucial target in the fight against climate change.
Methane emissions are much easier to control as they can be reduced with current technologies. This involves using satellite technology and ground-based equipment to identify methane leaks.
Technologies like infrared cameras can detect methane emissions that are not visible to the naked eye. Once detected, these leaks can often be fixed relatively, quickly and cheaply, often requiring basic plumbing. This makes methane reduction a cost-effective strategy for combating climate change.
Firstly, the pledge by the US and oil and gas companies globally represents a commitment to addressing climate change. Reducing methane emissions is crucial for achieving the Paris Agreement’s targets and preventing the impacts of climate change, such as extreme weather events and rising sea levels.
Furthermore, although these rules relate to the oil and gas sector, they are not limited to it. Agriculture and livestock farming are also significant sources of methane.
The focus on methane could lead to changes in agricultural practices, promoting more sustainable livestock management. This could impact livestock production and prices.
There are significant concerns among global investors and consumers about environmental issues. Stricter regulations can push businesses globally to reduce greenhouse gas emissions in a primary market such as the United States. This could lead to a broader shift in ESG, with companies taking proactive steps to minimise their ecological footprint.
In addition, the rules could also influence other countries to adopt similar measures.
Why might a law firm be involved?
- Commercial law firms working closely with oil and gas clients may be involved in guiding the companies through the methane regulations.
- With growing concerns and stricter regulations on climate change and ‘greenwashing,’ disputes could increase. Therefore, lawyers could represent clients who were, for whatever reason, non-compliant with methane emission rules.
- Lawyers handling mergers and acquisitions (M&A) in the oil and gas industry must perform extensive due diligence to determine whether the target company complies with methane emission regulations.
- Lawyers will also advise oil and gas clients on the broader implications of the methane regulations, including the financial impact and legal risk.
Article written by Chirag Morar
THE FALLOUT OF SAM ALTMAN’S DISMISSAL AND HIS RETURN TO OPENAI
The AI startup that led the generative AI boom since its release of ChatGPT has stunned the world in the past month.
Who might that be? You guessed it right – OpenAI.
The Board of directors suddenly dismissed the company’s CEO, sending the hottest startup in tech into an ongoing spiral with staff and investors, including Microsoft, blindsided by its actions. This crisis was rapidly proceeded by the resignation of three senior OpenAI researchers that same evening.
However, Sam Altman was readmitted as CEO, and an ‘initial new board’ was implemented. Further financial consequences followed, namely the prevention of the planned sale of OpenAI employee shares in a move that would boost the company’s valuation from $29 billion to somewhere between $80 billion and $90 billion, as spearheaded by Thrive Capital.
The reasons behind Altman’s unexpected exit
Allegedly, Mira Murati, OpenAI’s CTO and then interim CEO, was informed of the Board’s decision to dismiss Altman on the 16th of November. The next day, Altman was ousted, and Brockman was demoted as he ‘was vital to the company and would retain his role’. However, Brockman resigned shortly after his assignment.
During an all-hands-on-deck meeting, Sutskever defended Altman’s ouster and brushed off suggestions that pushing Altman out amounted to a ‘hostile takeover’ or a ‘boardroom coup’, but rather that the move was a necessity and a way of protecting OpenAI’s mission of ‘making AI beneficial to humanity’.
As per an OpenAI internal memo from COO Brad Lightcap, Sam Altman’s expulsion resulted from a ‘breakdown in communications between Sam Altman and the board’ rather than from any form of ‘malfeasance or anything related to our financial, business, safety, or security/privacy practices’ Axios reported.
This further implies that Altman was not as candid with the Board as he should have been, thus developing a rift within the company’s leadership over its tech development vis-a-vis its mission of creating safe AI.
How did Sam Altman come back?
Just over 24 hours after Altman was ousted, it was rumoured that the Board was in talks to return Altman to the helm. Sources state that investors were furious at the Board’s actions and the turn of events, putting pressure on the Board to reinstate Altman and even going as far as to recruit Microsoft to help facilitate an overturn of the Board’s decisions.
Microsoft holds leverage over it as OpenAI has only received a small piece of the recent $13 billion investment. If Microsoft withheld the rest of the cash investment, OpenAI would be financially unattainable. Moreover, Microsoft CEO Satya Nadella has announced they will hire ousted OpenAI boss Sam Altman and the firm’s co-founder Greg Brockman to lead a new AI team.
Eventually, the Board agreed in principle to resign and let Sam Altman return as CEO.
What is the structure of Open AI, and why is it important?
So far, OpenAI has been operating as a non-profit, and it was established to ‘ensure that safe artificial general intelligence is developed and benefits all of humanity’, making the non-profit the priority, while the capped-profit OpenAI Global subsidiary is not. It will remain the case for now, with its new Board continuing as the governing body for all OpenAI activities.
Sam Altman may request some change in governance as he stated it was ‘ridiculous’ that the major shareholders had such limited say in OpenAI’s governance.
The recent shake-up in the organisation and Altman’s reaction have put this structure under scrutiny mostly from the shareholders and investors, namely Altman and Microsoft, as the CEO was ousted. The giant has invested $13 billion into OpenAI’s for-profit arm without having a seat on the Board or any other legal mechanism allowing it to exercise influence.
The structure of OpenAI, the recent actions of its previous Board and the potential changes that are more than likely to be requested by Sam Altman and maybe even Microsoft amid the ousting are essential variables.
The organisation was constructed this way to protect the interests of humanity amid the AI revolution by emphasising safety, but that could change as Sam Altman receives an outpouring of high-profile support. He was reportedly ‘ambivalent’ about returning and questioned the limited shareholder control over the non-profit.
Could a change in governance shift the focus of OpenAI’s mission from ‘making AI beneficial to humanity’ to satisfying the company’s commercial ambitions?
Article written by Natalia Mileva