Energy companies’ plan to cut emissions fails to please critics
A dozen of the world’s largest energy companies have agreed to cut the emissions rate of their oil and gas production to address climate change, but environmental groups say “they must do better.”
The Oil and Gas Climate Initiative, an international consortium of CEOs heading 12 energy companies including Chevron, Exxon Mobil and Occidental Petroleum, announced a plan Thursday to reduce the carbon emissions rate of members’ total oil and gas production, cutting annual output by 36 million to 52 million metric tons by 2025.
The reduction, the group said, is equal to the carbon emissions from the energy use in 4 million to 6 million U.S. homes.
“This is a big step among a number of steps we have taken,” said OGCI Chairman Bob Dudley, the former CEO of BP.
Facing increasing scrutiny over their role in climate change, energy companies have set emissions goals and are investing billions of dollars in new technologies, such as carbon capture, to mitigate greenhouse gas emissions.
OGCI’s companies, which produce 30 percent of the world’s oil and gas, collectively invest more than $7 billion each year in low-carbon solutions. BP, CNPC, Eni, Equinor, Repsol, Saudi Aramco, Shell and Total round out the group.
OGCI, established in 2014 in response to calls for broader industry action on climate change, set a methane intensity target in 2018 that would reduce its collective methane emissions rate by 350,000 metric tons per year by 2025.
Methane can warm the planet more than 28 times as much as carbon dioxide in 100 years. OGCI last year said its member companies reduced its collective methane intensity by 9 percent in 2018.
The group’s new carbon intensity target covers carbon dioxide and methane emissions from member companies’ oil and gas exploration and production activities, as well as emissions from electricity and steam. The group is working to set emissions targets from liquified natural gas and gasto-liquids operations.
“This carbon intensity target is a near-term and practical step for member companies,” Saudi Aramco, the world’s largest oil producer and a OGCI member, said in a statement. “Together we are increasing the speed, scale, and impact of our actions to address climate change.”
OGCI began working a couple of years ago to set its new carbon intensity target, working with member companies to standardize emissions reporting and create a benchmark. Companies then set a short-term target they would report on annually.
Member companies plan to implement a range of measures to meet the new carbon emissions goal, including improving energy efficiency, minimizing flaring, using renewables to power operations, co-generating electricity and heat, and deploying carboncapture technologies.
OGCI doesn’t expect its member companies to reduce oil and gas production to lower emissions. The group is leaving that decision to individual companies, some of which have announced plans to shift from fossil fuels.
BP and Shell this year set a netzero emissions goal by 2050. BP on Thursday said it plans to take full ownership of a central Indiana wind farm in a deal that moves the British energy major closer to its net-zero goal.
Dudley, acknowledging the financial stress of the ongoing oil crash, said he believes members still will meet the new emissions target. In May, the 12 member CEOs issued a letter reaffirming their commitment to reducing emissions.
Environmental groups said they welcomed OGCI’s efforts to reduce emissions, but criticized the new targets for excluding ventures with nonmember companies and using carbon intensity targets, which are relative to total operations, allowing for emissions increases if production rises.
“OGCI’s new climate target isn’t fit for the job,” Ben Ratner, a senior director with the Environmental Defense Fund, said in a statement. “By excluding at least 85 percent of carbon lifecycle emissions from their target, OGCI companies are profiting from the use of their products while ignoring much of the pollution from that use. They must do better.”
Carbon Tracker, a Londonbased independent financial think tank researching the impact of climate change on financial markets, said looking at collective average emissions from 12 companies could mask poor performance by some member companies.
“Having some targets to reduce carbon pollution is better than none,” Andrew Grant, Carbon Tracker’s head of oil, gas and mining research, said in a statement. “But the industry can never consider itself ‘aligned’ with the Paris goals when business plans assume steady investment in fossil fuel production on a planet with absolute limits.”
Dudley said OGCI settled on a carbon intensity target, which allows companies to grow and encourages them to report emissions.
He acknowledged OGCI’s carbon emissions goal “would never be enough” for some of its critics, but said it’s a start. The target will be a stretch for companies to meet, but is not overly ambitious that it cannot be met, he said.
“It’s an achievable target,” Dudley said. “It’s tangible, and relatively near term.”