Mar 4, 2020 - Energy & Environment

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.

  • Chevron and ExxonMobil are also more cautious about spending on low-carbon technologies outside their core business than European majors.

What they're saying: “Certainly the European companies have made longer-term aspirational commitments," Wirth said yesterday at the company's annual meeting with analysts in New York.

  • "What we have done is given you things that are very tangible here and now that we are doing today,” Wirth said.
  • Wirth and other Chevron officials touted steps like near-term efforts to cut the emissions intensity of its oil production by 5%–10% by 2023.
  • "Right now for us, renewables create the most value when we integrate them into our existing operations, but we’re mindful of the opportunity for new business models," he said.

What's next: Exxon holds its annual investor day Thursday, where its approach — which shares more with Chevron than European majors — is bound to come up.

The big picture: The two U.S. giants' annual presentations come on the heels of fresh climate pledges by their rivals across the Atlantic.

  • BP last month pledged to become a "net-zero" emissions company by 2050, while last week Eni vowed an 80% cut in net emissions by then.
  • European majors are setting targets around "Scope 3" emissions, that is, the pollution from use of their products in the economy.
  • A good rundown of the plans comes via Reuters here.
  • Shell, Total, and BP have also withdrawn from some trade associations over differences on climate, something the U.S. counterparts are not doing.

Between the lines: A couple of things are worth noting here. One is that Exxon and Chevron have taken new or wider steps in recent years.

  • Examples include Chevron's investments, via its VC arm, in companies like ChargePoint and Carbon Engineering, and both majors joining the Oil and Gas Climate Initiative.
  • And when comparing them to the European majors, it's important to remember that while the European players have been more active, spending on low-carbon tech remains a small fraction of everyone's budget.

Go deeper: Big Oil lobby showing subtle shifts on climate change

Go deeper

Exxon resists calls for big climate pledges

Photo: Ken Jack/Getty Images

Exxon CEO Darren Woods put quite an exclamation point on the idea that U.S.-based oil majors aren't getting into an arms race with European rivals over long-term climate ambition.

What he's saying: Woods defended the company's approach at yesterday's investor day in New York, telling analysts that Exxon looks at the topic on a "global scale" rather than engaging in a "beauty match."

Chevron joins other majors making big cutbacks amid cratering oil demand

Photo: Justin Sullivan/Getty Images

Chevron this morning said it's slashing its planned 2020 capital spending by $4 billion — roughly 20% — and suspending share buybacks, making it the latest multinational giant to announce cutbacks as global oil demand craters.

The state of play: Chevron, the second-largest U.S.-based oil company, said around $2 billion of the cuts would be focused on shale, largely in the Permian Basin region.

Equinor bails on oil trade group over climate change disagreements

Oil field run by Equinor. Photo: Carina Johansen/NTB Scanpix/AFP via Getty Images

Oil-and-gas giant Equinor said Friday that it’s leaving the Independent Petroleum Association of America, an industry trade group, due to differences over climate policy.

What's happening: Equinor cited the group’s lack of public support for the Paris Agreement and carbon pricing.