Making sense of Chevron's new climate pledge

Chevron's pledged this week to cut emissions intensity — that is, emissions per unit of energy produced — from its oil and gas production.

Why it matters: The oil giant hasn't been as aggressive on climate change as European-based oil majors like Shell.

Yes, but: The company has stepped up its activities in recent years with moves including ...

• Investments through its venture arm in companies like the EV charging player ChargePoint, and the CO2-removal firm Carbon Engineering.
• Last year joining the Oil and Gas Climate Initiative, a coalition of oil majors working on the topic.

However, as this Financial Times piece points out, Chevron's investment in low-carbon energy is smaller than some rivals.

What they're saying: Advocates pushing the oil majors to do more were lukewarm on Chevron's announcement when I touched base with them yesterday.

• “It’s a relatively small intensity goal. ... It certainly does not feel like something that has a whole lot of teeth or ambition," said Bruno Sarda of CDP North America (CDP was formerly the Carbon Disclosure Project).
• He notes that intensity targets allow overall emissions to keep rising, even if production is more efficient.

Indeed, that distinction between intensity and absolute emissions is evident in Chevron's announcement.

• “Global demand for energy continues to grow, and we are committed to delivering more energy with less environmental impact,” CEO Michael Wirth said.

By the numbers: Chevron, the second-largest U.S. oil company behind Exxon, said that by 2023, it would cut emissions intensity of its oil production by 5-10% and intensity of natural gas production by 2-5% by then.

• Both are relative to 2016 levels, which the Houston Chronicle points out provides the company "a significant head start."

What's next: More pressure on Chevron from activist investors. “The pressure is going to continue until they make a commitment to absolute emissions reductions that align with the science,” Sarda said.

• One area to watch: Chevron, and several other majors, have not followed a small handful of European players including Shell and Total S.A. in setting goals for reducing emissions from the use of their fuels in the economy.
• "Investor concern is not focused on operational emissions — which is what this [new Chevron] goal addresses — but on the carbon embedded in the industry's core products," Andrew Logan of the sustainable investment advocacy group Ceres tells me.

Go deeper: Sizing up Big Oil's clean tech moves