Let's look into something we only had time to graze yesterday: Chevron's pledge to cut emissions intensity — that is, emissions per unit of energy produced — from its oil and gas production.
Why it matters: Chevron hasn't been as aggressive on climate change as European-based oil majors like Shell.
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.