Oil giants agree to a new emissions target

A group of the world's largest oil-and-gas companies this morning pledged near-term cuts to greenhouse gas emissions from their operations.

Why it matters: It's the latest step by energy giants — including Exxon and state-owned behemoths like China's CNPC — to address climate change. Activists say, however, the industry as a whole is moving far too slowly compared to the scope of the problem, especially outside of Europe.

How it works: The 12-member Oil and Gas Climate Initiative's target is to cut emissions intensity from exploration and production operations by 2025.

• The target is 20-21 kilograms of CO2-equivalent per barrel of crude oil equivalent, down from a "collective baseline" of 23 kilograms in 2017.
• The goal encompasses emissions of CO2 and the potent greenhouse gas methane.

The intrigue: "Intensity" means emissions per unit of output, as opposed to promising absolute reductions.

But OGCI said that if production levels remain constant, the pledge amounts to absolute emissions cuts equivalent to the energy use of 4-6 million homes.

What they're saying: “I don’t think it’s a small achievement to bring all these companies together — national oil companies, who have their own pressures, European and U.S. companies have different government and shareholder pressures on them — actually work together, particularly during the pandemic," Bob Dudley, the group's chairman and former BP CEO, tells Bloomberg.

Meanwhile, the Environmental Defense Fund's Mark Brownstein, who carefully tracks industry methane emissions, offers a mix of praise and criticism here.