Feb 13, 2020 - Energy & Environment

BP's climate move could mean new pressure on Exxon and Chevron

Illustration: Rebecca Zisser/Axios 

BP's new emissions pledge could create more pressure on U.S.-based giants Exxon and Chevron.

Why it matters: European oil behemoths have been more active on climate than their U.S. counterparts.

Context: BP vowed "net-zero" emissions from its operations and oil and gas it produces by 2050 and a 50% cut in emissions intensity from products it sells.

The big question: Now the question is whether BP's plan — which is the most aggressive among super-majors, albeit lacking detail — will change the landscape.

  • "If we do see capital flowing into BP, that may force the U.S. majors to rethink the speed at which they move on carbon reduction targets," Noah Barrett of the asset management firm Janus Henderson told Bloomberg.
  • But he does not see the U.S. companies "adopting a BP-like strategy in the near future."

Where it stands: One big dividing line between European and U.S. majors is companies' willingness to set any kind of goals around Scope 3 emissions.

  • Those are the emissions from the use of a company's products in the economy from driving and so forth, and they're vastly larger than emissions from companies' direct operations and energy use.
  • BP's Scope 3 target is a mix of commitments: an absolute net-zero target for the use of the oil and gas it produces, but the intensity target once you include the oil and gas they buy from other companies to process and sell.

What they're saying: An HSBC note this morning calls the new plan "potentially a game-changer for the company and the industry."

  • "For a company of BP’s scale, a net zero scope 3 footprint from its own production introduces a climate-related ambition on an unprecedented scale."
  • "It also points to a dramatic transformation of the business, including an inevitable shrinkage of the upstream business over time."

Go deeper: BP vows to "fundamentally" change with net-zero emissions target

Go deeper

Report: BP abandoning trade groups in climate split

BP CEO Bernard Looney speaks during an event in London on Feb. 12. Photo: Daniel Leal-Olivas/AFP via Getty Images

Oil-and-gas giant BP is planning to leave at least two industry trade groups due to differences over climate change policy, The Washington Post reported Tuesday night.

Driving the news: BP is expected to leave American Fuel & Petrochemical Manufacturers (AFPM), and the Western States Petroleum Association (WSPA), they report. The WSPA confirmed to Axios that BP is leaving.

Cracks emerge in the oil lobby over climate change

Illustration: Eniola Odetunde/Axios

European-based oil giants' evolving steps on climate change are cracking — but not yet rupturing — the industry's lobbying and advocacy relationships in the U.S.

Driving the news: This morning BP said it's leaving three groups over differences on climate policy: American Fuel & Petrochemical Manufacturers, the Western States Petroleum Association, and the Western Energy Alliance.

Big Oil's ocean-wide split on climate

Illustration: Aïda Amer/Axios

This week is providing a rolling demonstration of the divide between U.S. and European-headquartered multinational oil giants when it comes to climate change.

Driving the news: Chevron CEO Mike Wirth yesterday made the case for their posture, which eschews the deep, long-term, emissions-cutting targets of companies like BP and Shell.