Jan 10, 2022 - Energy & Environment

The oil industry's decarbonization divide

Illustration of a fissure in the ground opening up towards barrels of oil.

Illustration: Aïda Amer/Axios

A pair of recent surveys shows how plans to curb emissions have only partially taken hold in the oil-and-gas industry.

Driving the news: The Kansas City Fed's latest quarterly poll of firms headquartered or located in its district found that 45% had a plan to reduce CO2 emissions and 41% had a plan to cut methane.

The bank's region includes Colorado and Wyoming, two major producing states.

The Dallas Fed found that 63% of large firms (defined as producing more than 10,000 barrels per day) had plans to reduce CO2, compared to 21% of small firms that responded. A similar divide exists on methane.

The big picture: Oil giants like Shell and Exxon, and big independents like ConocoPhillips, have high-profile emissions efforts. But the results show a mixed picture industry-wide (to say nothing of whether companies with plans are doing enough).

By the numbers: Among large firms, 38% plan to cut emissions by 10% or more by 2025, while the rest are planning smaller reductions, per the Dallas Fed survey. Most of the firms with over 100,000 barrels of daily production plan cuts of greater than 10%.

The intrigue: Energy analyst Mason Hamilton tweeted that the Dallas Fed survey "makes clear the double-edged sword of oil & gas divestments (i.e. large firms selling assets to smaller firms)."

"More large firms have plans to reduce GHG emissions and other ESG policies than smaller firms."

Go deeper