For the first time in history, the world’s leading oil producers including Saudi Aramco, China’s CNPC and Exxon Mobil have united to set objectives to cut their combined greenhouse gas emissions in the proportion of their production as global pressure increases due to the lack of action in this regard.
However, the target set by the 12 members of the Oil and Gas Climate Initiative (OGCI) is sub-par compared to the more ambitious targets set individually by the consortium’s European members, including Royal Dutch Shell, BP and Total.
The OGCI members agreed to reduce the average carbon intensity of their combined upstream oil and gas operations to between 20 kg and 21 kg of CO2 equivalent per barrel of oil equivalent (CO2e/boe) by 2025, from a combined baseline of 23 kg CO2e/boe in 2017.
Intensity targets mean actual emissions can increase with rising production.
The OGCI includes Saudi Aramco, Total, BP, Shell, Chevron, CNPC, Eni, Equinor, Exxon, Occidental Petroleum, Petrobras, and Repsol which collectively account for more than 30% of the world’s oil and gas production.
“It is a significant milestone, it is not the end of the work, it is a near term target … and we’ll keep calibrating as we go forward,” OGCI Chairman and former BP CEO Bob Dudley said.
The members agreed on a common methodology to measure carbon intensity and the targets could be extended to other sectors such as liquefied natural gas and refining in the future, Mr. Dudley appended.
The announcement marks an important change for US-based Exxon which has opposed investor pressure to enhance the disclosure of its impact on the environment. It did not report its carbon emissions in 2019.
Exxon spokesman said that the firm supports the OGCI targets to decrease the carbon intensity of energy production and is “part of the industry’s efforts to take practical, meaningful steps to reduce emissions.”
The targets set by different companies can vary widely in scope and definition, making it difficult to compare. However, some members of the OGCI already exceed or plan to overshoot the joint target.
For example, Saudi Aramco, the world’s top oil exporter, had an upstream carbon intensity of 10.1kg CO2e/boe in 2019 according to company records while Norway’s Equinor intends to reduce its CO2 intensity below 8kg/boe by 2025. It has said the current global industry average is 18 kg CO2e/boe.
OGCI said the group’s collective carbon intensity would be published annually, with data examined by EY, as an independent third party. The target includes reductions in methane emissions, a potent greenhouse gas, which the group had previously committed to cut.