OPAL Fuels, the quietly growing giant of renewable natural gas (RNG), has just released its first-quarter 2024 earnings. While most analysts are dissecting production numbers and CapEx projections, something else jumped out from the transcript: a subtle, yet potent, argument for a bipartisan energy revolution.

Buried within the discussion of eRINs and ITC regulations, OPAL CEO Adam Comora laid out a compelling case for a better, more holistic approach to tackling methane emissions. He frames the current debate as a myopic "molecules versus electrons" squabble, missing a crucial point: fugitive methane emissions from waste already exist, regardless of our energy preferences.

Comora argues that doing nothing about this "molecule-in-place" problem, or resorting to flaring, are simply not viable options. Instead, he proposes a "better best" solution: converting these emissions into either renewable power or RNG. This approach, he asserts, transcends partisan politics, offering benefits across the spectrum.

For the environmentally conscious, RNG presents a potent tool for fighting climate change and improving air quality, especially in disadvantaged communities often disproportionately impacted by pollution. For those concerned about economic growth and energy security, it presents a domestic energy source that creates jobs, supports agriculture, and benefits countless municipalities through landfill and wastewater treatment facility investments.

Comora goes on to weave a fascinating narrative of how this "better best" strategy could find favor with both Democrats and Republicans. Under a Biden administration, policies like eRINs and broader ITC inclusion could incentivize RNG production. Under a potential Republican administration, practical considerations like heavy-duty trucking decarbonization and streamlining RNG use for renewable hydrogen could see significant support.

But here's where things get truly intriguing. Comora suggests that eRINs, often viewed as a purely Democratic policy, could actually gain bipartisan traction. He argues that, unlike other biofuels, RNG doesn't compete with corn or soy in the RIN market, making it a politically palatable option for Republican constituencies.

He also highlights the growing awareness of climate change across the political spectrum, especially amongst younger generations. This, coupled with the SEC's push for greenhouse gas disclosure, creates a potent incentive for businesses to seek out low-carbon solutions like RNG, regardless of their political leanings.

OPAL Fuels Production Growth

The following chart showcases OPAL Fuels' projected production growth based on their Q1 2024 earnings transcript.

So, what does this all mean? Is OPAL subtly hinting at a political strategy shift? Are they laying the groundwork for a broader industry push to redefine the energy debate?

The numbers certainly back up their optimism. Despite some cost inflation in recent years, OPAL maintains strong capital discipline, achieving attractive returns on their projects. Their vertical integration, combining production, distribution, and dispensing, allows them to capture the full value chain, maximizing profitability.

With projects like Prince William ramping up and others like Sapphire and Polk slated to come online later this year, OPAL is on track for significant production growth, projecting a 60-80% increase in 2024. Coupled with their strong performance in Fuel Station Services, they anticipate adjusted EBITDA in the $90-100 million range.

Beyond these impressive figures, OPAL's message seems to resonate on a deeper level. Their focus on a practical, win-win solution to a growing problem transcends the current partisan gridlock. Perhaps, within OPAL's quiet growth and subtle messaging, lies the seed of a truly bipartisan energy revolution.

"Fun Fact: Did you know OPAL Fuels has dispensed over 650 million gallons of RNG since its inception? That's enough to power a fleet of garbage trucks to the moon and back!"