Chevron promises $10B for cleaner energy
Chevron plans to triple its investments in renewable fuels, hydrogen and carbon capture technologies as the California oil major faces mounting public pressure to address climate change.
The oil giant on Tuesday said it plans to invest more than $10 billion into lower carbon businesses by 2028, including $2 billion to lower carbon emissions from its oil and gas operations. This is more than triple the company’s $3 billion spending plan.
“Chevron intends to be a leader in advancing a lower carbon future,” CEO Michael Wirth said in a statement. “Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships.”
More oil companies are setting emissions targets and investing in lower carbon projects as government regulators and some shareholders push them to avert the worst consequences of climate change. Companies are disclosing flaring and emissions levels, electricity and water management, and the use of pipelines and trucks to transport crude. In addition, companies are turning to new drone and radar technology to monitor gas leaks and are installing solar panels to power production equipment.
This trend is driven by significant capital pouring into companies and investment funds that focus on environmental, social and corporate governance. Vanguard, Blackrock and State Street, funds with the largest holdings in oil and gas, have pledged to invest in net-zero emis
sion companies.
“Chevron is moving closer to its European peers in terms of the amount of and growth in spending on low carbon alternatives to oil and gas,” said Peter McNally, an energy leader at New York investment research firm Third Bridge. “It is a diversified approach, but there is a wide range of potential returns for Chevron and its shareholders.”
Chevron on Tuesday also set several targets for its lower carbon businesses, including growing its renewable natural gas production to 40,000 million British thermal units per day and increasing production capacity of renewable diesel and sustainable aviation fuel to 100,000 barrels per day. The company also plans to expand its hydrogen production to 150,000 tonnes per day and increase its carbon capture and offset to 25 million tonnes per day.
The oil giant in recent days has announced several joint ventures to expand its low-carbon businesses, including with Delta Air Lines and Google to measure sustainable available fuel emissions data; with Caterpillar and Mitsubishi Power on hydrogen; and with Enterprise Products Partners to explore carbon storage opportunities.
Chevron’s rival Exxon Mobil last week said it will allow an independent evaluator to grade and certify its natural gas production to give its customers more confidence that they are buying natural gas produced with lower emissions.