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Experts reveal top 6 predictions for oil and gas industry in 2025

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Texas energy experts look ahead to what's in store for oil and gas in 2025. Photo via Getty Images

If you tune in to the popular national narrative, 2025 will be the year the oil and gas industry receives a big, shiny gift in the form of the U.S. presidential election.

President Donald Trump’s vocal support for the industry throughout his campaign has casual observers betting on a blissful new era for oil and gas. Already there are plans to lift the pause on LNG export permits and remove tons of regulatory red tape; the nomination of Chris Wright, chief executive of Liberty Energy, to lead the Department of Energy; and the new administration’s reported wide-ranging energy plan to boost gas exports and drilling — the list goes on.

While the outlook is positive in many of these areas, the perception of a “drill, baby, drill” bonanza masks a much more complicated reality. Oil and gas operators are facing a growing number of challenges, including intense pressure to reduce costs and boost productivity, and uncertainty caused by geopolitical factors such as the ongoing conflicts in the Middle East and Russia-Ukraine.

From our vantage point working with many of the country’s biggest operators and suppliers, we’re seeing activity that will have major implications for the industry — including the many companies based in and operating around Texas — in the coming year. Let’s dig in.

1. The industry’s cost crunch will continue — and intensify.
In 2024, oil and gas company leaders reported that rising costs and pressure to cut costs were two of the top three challenges they faced, according to a national Workrise-Newton X study that surveyed decision makers from operators and suppliers of all sizes. Respondents reported being asked to find an astonishing 40% to 60% reduction in supply chain-related costs across categories, on average.

Given the seemingly endless stream of geopolitical uncertainty (an expanded war in the Middle East, continued conflict after Russia’s invasion of Ukraine, and China’s flailing economy, for starters), energy companies are between a rock and a hard place when it comes to achieving cost savings from suppliers.

With lower average oil prices expected in 2025, expect the cost crunch to continue. That’s because today’s operators have only two levers they can rely on to drive an increase in shareholder returns: reducing costs and increasing well productivity. Historically, the industry could rely on a third lever: an increase in oil demand, which, combined with limited ability to meet that demand with supply, led to steadily increasing oil prices over time. But that is no longer the case.

2. The consolidation trend in oil and gas will continue, but its shape will change.
In the wake of the great oil and gas M&A wave of 2024, the number of deals will decrease — but the number of dollars spent will not. Fewer, larger transactions will be the face of consolidation in the coming year. Expect newly merged entities to spin off non-core assets, which will create opportunities for private equity to return to the space.

This will be the year the oil and gas industry becomes investable again, with potential for multiple expansions across the entire value chain — both the E&P and the service side. From what we’re hearing in the industry, expect 2 times more startups in 2025 than there were this year.

With roughly the same amount of deals next year, but less volume and fewer total transactions, there will be more scale — more pressure from the top to push down service costs. This will lead to better service providers. But there will also be losers, and those are the service providers that cannot scale with their large clients.

3. Refilling SPR will become a national priority.
The outgoing administration pulled about 300 million barrels out of the country’s Strategic Petroleum Reserve (SPR) during the early stages of the Russia-Ukraine conflict. In the coming year, replenishing those stores will be crucial.

There will be a steady buyer — the U.S. government — and it will reload the SPR to 600-plus million barrels. The government will be opportunistic, targeting the lowest price while taking care not to create too much imbalance in the supply-demand curve. A priority of the new administration will be to ensure they don’t create demand shocks, driving up prices for consumers while absorbing temporary oversupply that may occur due to seasonality (i.e. reduced demand in spring and fall).

The nation’s SPR was created following the 1973 oil embargo so that the U.S. has a cushion when there’s a supply disruption. With the current conflict in the Middle East continuing to intensify, the lessons learned in 1973 will be top of mind.

If OPEC + moves from defending prices to defending market share, we can expect their temporary production cuts to come back on market over time, causing oversupply and a resulting dramatic drop in oil prices. The U.S. government could absorb the balance, defending U.S. exploration and production companies while defending our country's interest in energy security. Refilling the SPR could create a hedge, protecting the American worker from this oversupply scenario.

4. The environment and emissions will remain a priority, and the economic viability of carbon capture will take center stage.
Despite speculation to the contrary, there will be a continuation of conservation efforts and emissions reduction among the biggest operators. The industry is not going to say, “Things have changed in Washington, so we no longer care about the environment.”

But there will be a shift in focus from energy alternatives that have a high degree of difficulty and cost keeping pace with increasing energy demand (think solar and wind) to technologies that are adjacent to the oil and gas industry’s core competencies. This means the industry will go all in on carbon capture and storage (CCS) technologies, driven by both environmental concerns and operational benefits. This is already in motion with major players (EQT, Exxon, Chevron, Conoco and more) investing heavily in CCS capabilities.

As the world races to reach net-zero emissions by 2050, there will be a push for carbon capture to be economical and scalable — in part because of the need for CO2 for operations in the business. In the not-so-distant future, we believe some operators will be able to capture as much carbon as they're extracting from the earth.

5. The sharp rise in electricity demand to power AI data centers will rely heavily on natural gas.
Growth in technologies like generative AI and edge computing is expected to propel U.S. electricity demand to hit record highs in 2025 after staying flat for about two decades. This is a big national priority — President Trump has said we’ll need to more than double our electricity supply to lead the globe in artificial intelligence capabilities — and the urgent need for power will bring more investment in new natural gas infrastructure.

Natural gas is seen as a crucial “bridge fuel” in the energy transition. The U.S. became the world's top exporter of LNG in 2023 — and in the year ahead, brace for a huge push for pipeline infrastructure development in the range of 10-15 Bcf of new pipeline capacity in the next two to three years. (Translation: development on a massive scale, akin to railway construction during the Industrial Revolution.)

Big operators have already been working on deals to use natural gas and carbon capture to power the tech industry; given the significant increase in the electricity transmission capabilities needed to support fast-growing technologies, there will continue to be big opportunities behind the meter.

6. Regulatory processes will become more efficient, not less stringent.
This year will bring a focus on streamlining and aligning regulations, rather than on wholesale rollbacks. It’s not carte blanche for the industry to do whatever it wants, but rather a very aggressive challenge to the things that are holding operators back.

Historically, authorities have stacked regulation upon regulation and, as new problems arise, added even more regulations on top.There will be a very deliberate effort this year to challenge the regulations currently in place, to make sure they are aligned and not just stacked.

The new administration is signaling that it will be deliberate about regulation matching intent. They’ll examine whether or not particular policies are valuable to retain, or reconfigure, or realign with the industry to enable growth and also still protect the environment.

Easing the regulatory environment will enable growth in savings, lower project costs and speed to bring projects online. Another benefit of regulatory certainty: it will make large capital project financing more readily available. We’ve seen major gridlock in large project financing due to a lack of trust in the regulatory environment and potential for rules to change mid-project (see: Keystone XL). If they are certain the new administration will be supportive of projects that are viable and meet regulatory requirements, companies will once again be able to obtain the financing needed to accelerate development and commissioning of those projects.

But we shouldn’t mistake a new era of regulatory certainty for a regulatory free-for-all. Take LNG permits. They should be accelerated — but don’t expect a reduction in the actual level of environmental protection as a result. It currently takes 18 months to get a single permit to drill a well on federal land. It should take three weeks. Before 2020, it took about a month to obtain a federal permit.

2025 will be the year we begin to return to regulatory efficiency without sacrificing the protections the rules and policies set out to accomplish in the first place.

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Adam Hirschfeld and Jacob Gritte are executives at Austin-based Workrise, the leading labor provider and source-to-pay solution for energy companies throughout Texas and beyond.

From coal and consolidation to LNG and policy reform, here are eight predictions for the energy industry. Photo via Getty Images

8 energy industry predictions for 2024 from oil and gas experts

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We hate to start with the bad news, but let’s get it out of the way. As we look to the year ahead, we see numerous challenges for the industry, from labor and geopolitics to OPEC and continued polarization in Washington. Times are complicated, and nothing looks to be getting simpler.

But there’s good news, too. Natural gas use is booming, and the production, transmission, and processing companies that move decisively here will see substantial upside. Additionally, those who diversify their businesses can get in early on new ventures and accelerate their progress — see Devon with Fervo in geothermal. Local nuclear, hydrogen, and carbon capture all represent similar opportunities.

From our vantage point working with many of the biggest operators and suppliers, we’re seeing activity that will have major ramifications for the industry in the coming year.

Here are eight predictions about what’s around the corner — the good, the bad, and the hopeful. Let’s dig in.

Prediction 1: Historic growth in natural gas demand will drive more favorable policy, which will enable more rapid development of natural gas infrastructure and pipelines.

What we’ll see: Early signals show over a 10 percent demand increase for natural gas through the end of 2025, driven largely by international factors. Supply disruptions in Europe due to Ukraine, shutdowns internationally on key nuclear projects, and efforts to move from coal to natural gas both in Europe and the developing world are all contributing factors.

Why it matters: As global demand increases, more LNG export facilities will either be upgraded or built in the United States to increase our capacity to export natural gas to markets around the world. New capital will flow to infrastructure like LNG export facilities, and then the opposite infrastructure will need to be built to take it back to liquid. We are already seeing movement on additional new projects in the US, and expect it to ramp significantly in 2024 and beyond. This demand-side pressure, coupled with the fact that natural gas has made meaningful strides on emissions, will drive a much more favorable policy posture. We believe this will enable the development of natural gas infrastructure and pipelines, and accelerated investment in combined cycle natural gas plants.

Prediction 2: Next year will be the year oil and gas starts to walk the walk when it comes to the energy transition.

What we’ll see: The year ahead will bring a more realistic approach to the energy transition from the big oil and gas companies. We expect to inch closer to consensus in the industry on the need for both improved emissions reduction and increased diversification in order to meet the expectations of investors and secure new pathways to long-term growth.

While you may hear less about what companies are doing to drive the transition, they will actually be doing more via internal investment, consolidation in the form of M&A, and public/private partnerships.

Companies will also invest meaningfully in new technologies to lower their carbon footprints, and for operations of this size and scale, even incremental investments will have significant impact. Expect to see both organic and inorganic development as companies build new solutions internally and either invest in or acquire smaller companies that open up new pathways to emissions reduction, diversification, and ultimately growth.

This will result in even more mega deals as the majors and supermajors compete for a fixed number of assets (see: Chevron’s growing carbon capture interest and acquisition of Hess, Exxon’s acquisition of Pioneer, Oxy’s moves to cement its position as the industry leader in the carbon capture arena).

Why it matters: Make no mistake — we are still operating in a world where a large portion of investments in diversification and emissions reduction occupy the realm of R&D. Testing. Probing what's possible. Companies won't be broadcasting it because they don't know for sure what is going to work. But what we'll see is more of those investments coming to fruition. And while they may be a drop in the bucket for a supermajor, even a small increase in spend for the Chevrons and Exxons of the world will represent meaningful progress on the ground.

Prediction 3: The oil and gas M&A wave will drive massive consolidation on the services side of the industry.

What we’ll see: As larger oil and gas companies acquire companies to secure new assets and build pathways to future growth, consolidation of the leadership teams that manage their operations will have ripple effects. This will significantly impact decisions on which vendors continue to service the operations of the company post-integration. Because of this, the vendors they choose to work with will massively grow as they are folded into the larger company’s operations, while the others will get cut out and see demand shrink considerably.

Why it matters: The services companies who win out will buy up the smaller companies to keep up with growth. Consolidation will shift the balance of power among companies, leaving those that lose out to either drastically shrink or go out of business entirely. As companies consolidate services under their go-to strategic vendors, these same vendors will gain significant pricing leverage over their clients. And more consolidation will mean less competition on the supply side of the equation, which will further drive up costs that are already rising, according to a recent NewtonX benchmark study on the oil and gas supply chain.

Prediction 4: The oil and gas industry will continue to struggle with a broken skills transfer pipeline.

What we’ll see: The industry is experiencing a massive age-out of seasoned employees, coupled with a lack of new talent choosing a career in oil and gas, leading to skills gaps and labor shortages. This is exacerbated by the sector’s longtime reliance on an apprenticeship model. At the same time, the industry is making strides with technology, empowering individual employees to do more than ever before. But these advancements require new and different skills which won't, at least in the next 12 months, help address the root problem here. Until then, these gaps have the potential to drive increasingly unsafe labor environments.

Why it matters: More than ever, oil and gas companies will need access to trusted vendors with experienced talent and advanced technology that can handle complex projects while maintaining the highest safety standards. The industry must stay more vigilant than ever to avoid increased rates of accidents and fatalities in the field due to the continued decline in available, qualified talent. And, of course, it must develop its current employees. Just under half of the respondents in our supply chain benchmark study reported that they were “investing in employee training and development” to meet their most pressing challenges.

Prediction 5: We’ll see the dawning of a nuclear renaissance.

What we’ll see: Nuclear energy will shake off the vestiges of its battered reputation as the public and private sectors begin to see it for what it is: a safe and reliable long-term solution for sustainable power generation. Expect small nuclear modular reactors (SMNRs) at home and abroad to drive nuclear investment and innovation, alongside continued reinvestment in existing large-scale infrastructure.

Why it matters: As nuclear returns to favor, localized nuclear power will evolve in the US. The federal government is already taking more of a pro-nuclear approach, actively investing in and retooling existing plants to increase the facilities’ lifespans. And there is Congressional support on both sides of the aisle. According to a new PEW study, half of Democrats and Democratic-leaning independents and two-thirds of Republicans now say they favor expanding nuclear power. Companies at the cutting edge of this sea change will begin to harness it to make hydrogen.

Prediction 6: We haven’t hit peak coal yet.

What we’ll see: Coal utilization and consumption, driven by the demand from the developing world — Africa, parts of Asia, and South America — have risen over the past 18 months. Expect this to continue. Despite the immense damage caused to the planet by the burning of coal, putting it at odds with the global goal of a sustainable future, countries lacking in sufficient power still see coal as a faster, less expensive way to provide the energy they need to grow their economies.

Why it matters: The rise of coal usage will continue to put us farther and farther behind as a planet until we can offer reliable, cost-effective, and cleaner alternatives. One alternative is natural gas power generation (which creates 50 to 60 percent fewer carbon emissions than coal power generation) in the regions where it is needed most. But given how polarized the climate debate has become, only time will tell whether LNG will be accepted as a viable bridge fuel in the court of public opinion

Prediction 7: As our progress falls behind schedule relative to 2050 goals, political tensions will continue to rise.

What we’ll see: We can expect the election year in the U.S. to accelerate the ideological polarization we have endured in the oil and gas vs. Renewables debate. At the same time, the planet will slide on the emissions scoreboard due to coal usage in the developing world, lack of movement on industrial commodities like steel, and the slow march of progress on getting renewable energy sources to be viable from an investment standpoint without the aid of government subsidies.

Why it matters: This will only stoke the anger from the left, and cause the right to dig in even further as oil and gas continues to carry the global energy supply and power the global economy. And paradoxically, if you accept that coal is the single worst enemy of climate progress, the polarization we see will only limit our ability to eradicate coal from our global energy mix. Why? Because there is no cleaner, more readily available alternative to natural gas. And we need comprehensive infrastructure and energy policy reform to unleash U.S. national gas on this global crisis. That’s why we’ve made the case that comprehensive policy reform should be Washington's top domestic priority over the next 12 months. It's crucial for both the economy and our national security.

Prediction 8: The influence of OPEC will be put to the test.

What we’ll see: Production elsewhere in the world, including Canada and the US, will continue to rise, which will challenge OPEC influence. Countries will re-evaluate trade routes and trading relationships due to increased buying options, which present the opportunity to lower costs for domestic consumers, kickstart consumer spending, and increase energy security.

Why it matters: Expect more extreme business and production tactics as OPEC members strain to maintain control of global energy markets. Take note of new alliances and trade partnerships begin to form and watch rising powers make their first moves on the global energy chessboard as we start to see a new world order take shape.

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Joshua Trott and Adam Hirschfeld are executives at Austin-based Workrise, which is a labor provider and supply chain solution for energy companies — including some in Houston.

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Houston solar rally, renewable energy celebration to take place this weekend

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Local organizations will celebrate solar, wind and renewable energy this Sunday, Sept. 21, during Sun Day Houston.

Timed with the autumn equinox, the event will bring together speakers, exhibits, workshops and hands-on activities that promote the adoption of clean power sources outside of Christ the King Lutheran Church at 2353 Rice Blvd., near Rice University. It will take place from 2-4:30 p.m.

Featured speakers include:

  • Daniel Cohan, professor of civil and environmental engineering at Rice, who will speak on the science of renewable energy and its growing role in ERCOT and the national U.S. energy grid
  • Andrea Oyuela, manager of the Harris County Solar for All program, who will speak on Harris County’s efforts to expand solar energy access to underserved communities and the county's leadership role in the Texas Solar for All Coalition

Attendees will also be able to participate in mobile solar and home solar battery displays, an electric vehicle show-and-tell, and a rain barrel workshop. Other workshops include the Tips and Tricks for Going Solar Workshop and the Welcoming the Energy Transition Workshop.

Exhibits will be hosted by:

  • Harris County Sustainability Division
  • Solar United Neighbors
  • Environment Texas
  • Public Citizen
  • Houston Chapter, Citizens Climate Lobby
  • Texas Campaign for the Environment
  • Houston Electric Vehicle Association
  • Houston Climate Boulder Project
  • Turtle Island Restoration Network
  • Climate Conversation Brazoria County
  • Sunrise Movement
  • Rice Wildlife Conservation Corps

Sun Day Houston is part of hundreds of Sun Day events worldwide. TH!RD ACT, a national nonprofit founded by environmentalist Bill McKibben, is serving as the primary sponsor. It is co-sponsored by 22 Gulf Coast environmental organizations, including Sierra Club of Houston, Harris County Sustainability Division, the Green Building Council, and many others. Find more information here.

Hobby debuts solar canopy as airport system reaches new sustainability milestone

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Houston's William P. Hobby Airport is generating its own clean energy.

Houston Aiports announced that Hobby's red garage is now home to a "solar canopy" that is producing energy at 100 percent capacity to power daily operations. The photovoltaic (PV) solar system generated more than 1.1 gigawatt-hours of electricity in testing, and is expected to produce up to 1 megawatt-hour now that it's operating at full power.

“This project is proof that sustainability can be practical, visible and directly tied to the passenger experience,” Jim Szczesniak, director of aviation for Houston Airports, said in a news release. “Passengers now park under a structure that shields their cars from the Texas sun while generating clean energy that keeps airport operations running efficiently, lowering overall peak demand electrical costs during the day and our carbon footprint. It’s a win for travelers, the city and the planet.”

The project was completed by Texas A&M Engineering Experiment Station (TEES) and CenterPoint Energy. It's part of Houston Airport's efforts to reduce carbon emissions by 40 percent over its 2019 baseline.

In a separate announcement, the airport system also shared that it recently reached Level 3 in the Airports Council International (ACI) Airport Carbon Accreditation program after reducing emissions by 19 percent in three years. This includes reductions at George Bush Intercontinental Airport (IAH), Hobby and Ellington Airport/Houston Spaceport.

The reductions have come from initiatives such as adding electric vehicles to airport fleets, upgrading airfield lighting with LED bulbs, adding smarter power systems to terminals, and improving IAH's central utility plant with more efficient equipment. Additionally, the expansion to Hobby's West Concourse and renovations at IAH Terminal B incorporate cleaner equipment and technology.

According to Houston Airports, from 2019 to 2023:

  • IAH reduced emissions by 17 percent
  • Hobby reduced emissions by 32 percent
  • Ellington Airport reduced emissions by 4 percent

"I see firsthand how vital it is to link infrastructure with sustainability,” Houston City Council Member Twila Carter, chair of the council’s Resilience Committee, said in the release. “Reducing carbon emissions at our airports isn’t just about cleaner travel — it’s about smarter planning, safer communities and building a Houston that can thrive for generations to come.”

Houston Methodist leader on the push for sustainable health care and new local event

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Every industry can play a role in the energy transition, and Houston Methodist is leading the charge in the health care sector.

Culminating at this week’s inaugural Green ICU Conference, part of Houston Energy and Climate Startup Week, the health care system has spent the last three years taking a closer look at its environmental footprint—and showing other hospital systems and medical organizations how they too can make simple changes to reduce emissions.

The event, held tomorrow, Sept. 17, at TMC Helix Park, will bring together health care professionals, industry leaders, policymakers and innovators to explore solutions for building a more sustainable healthcare system.

In an interview with EnergyCapital, Dr. Faisal N. Masud, medical director of critical care at Houston Methodist and a champion for sustainability efforts across the system, shares the inspiration behind the event and what attendees can expect to take away.

Tell us about how the Green ICU Conference came to be.

Houston Methodist’s inaugural Green ICU conference is about three years in the making. It originated because Houston Methodist recognized the significant impact health care has on sustainability and the lack of similar initiatives in the U.S.

The Center for Critical Care at Houston Methodist launched a sustainability-focused ICU initiative, published a roadmap and became involved in international efforts to develop guidelines that many other organizations now use. Our work led to the creation of the first Green ICU Collaborative in the country, and the Green ICU Conference was established to share best practices and address the global impact of critical care on the environment.

What were some of the biggest takeaways from the collaborative, and how are they represented in this new event?

Through the Green ICU Collaborative, we’ve seen that health care professionals can make a significant impact on sustainability through simple, practical changes, and many solutions can be implemented without major costs or compromising patient care. Additionally, there’s a strong link between environmental stewardship and patient safety and quality. These lessons will be represented in the new Green ICU Conference by showcasing easy-to-adopt best practices, emphasizing the importance of sustainability in daily health care operations, and fostering a sense of shared responsibility among attendees to improve both patient outcomes and environmental impact.

Why are ICUs considered to be such carbon hot spots?

ICUs are considered carbon hot spots because they care for the sickest patients, requiring intensive therapies, numerous medications and a large amount of equipment, such as ventilators and pumps. This makes them the most resource- and energy-intensive areas in a hospital. A single day in the ICU can have a greenhouse gas impact equivalent to driving a car 1,000 kilometers.

The U.S. health care sector is responsible for approximately 8.5 percent of greenhouse gas emissions, and hospitals are the second-most energy-intensive commercial buildings in the country. With the Texas Medical Center being in the heart of Houston, it’s critical that health care organizations play a role in this area.

That’s why the Center for Critical Care launched a system-wide Green ICU Initiative with the Houston Methodist Office of Sustainability to help reduce our carbon impact and waste while continuing to provide unparalleled patient care. Innovation is part of our culture, and that extends into our sustainability efforts. Houston Methodist’s Green ICU initiative is the first-of-its-kind in the U.S.

What efforts has Houston Methodist taken to cut emissions?

The first step to cutting emissions is measuring an organization’s carbon footprint to determine the best path forward. Houston Methodist’s Office of Sustainability has aggregated two years of baseline emissions data pending third-party validation. The hospital has taken several steps to cut emissions, including implementing composting programs, installing solar panels, improving energy utilization and participating in global plastic recycling initiatives. These efforts are part of a broader commitment led by our Office of Sustainability to reduce the hospital’s environmental footprint.

Tell us a little more about the event. Who should attend? What do you expect to be some of the highlights?

The Green ICU Conference, taking place during Houston Energy and Climate Week, is focused on health care sustainability, bringing together health care professionals, engineers, experts and anyone interested in reducing health care’s environmental impact. With participants and speakers from six countries, the conference brings together leading experts who aim to raise awareness, share best practices and offer practical, easy-to-adopt solutions for making health care more sustainable.

Highlights include perspectives from leading voices in health care sustainability, real-world examples of successful sustainability initiatives and opportunities for networking and collaboration. Anyone interested in health care, sustainability,or making a positive impact in their community should consider attending.

And, because of increasing interest, we’ve opened up the opportunity for attendees to join virtually at no cost or in person.

What do you hope attendees take away? What are your major goals for the event?

The main goals of hosting the Green ICU Conference for the first time are to raise awareness about the environmental impact of health care; engage and empower attendees to implement easy, practical sustainability solutions; and foster a sense of shared community and responsibility.

I hope attendees leave the event feeling motivated and equipped to make meaningful changes in their own practices, whether that’s improving patient care, supporting their colleagues, or leaving their organization and environment in a better place for future generations.

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