Page 4 - NorthAmOil Week 41 2021

NorthAmOil COMMENTARY NorthAmOil

Chevron sets sights on net zero

Super-major Chevron is now targeting net-zero emissions from its operations by

2050 but describes it as an aspiration, demonstrating ongoing caution

GLOBAL CHEVRON announced this week that it would
pursue net-zero greenhouse gas (GHG) emis-
WHAT: sions by 2050. The company described the target
Chevron announced that as an “aspiration”, and while it fell short of the
it would aspire to reach more aggressive net-zero goals set by Euro-
net-zero GHG emissions pean rivals such as Royal Dutch Shell and BP, it
from its operations by marks the first such move by one of the two US
2050. super-majors.
In an updated climate change resilience
WHY: report, Chevron outlined plans to aim for net-
The company has faced zero Scope 1 and Scope 2 emissions – those
mounting pressure from stemming directly from its operations and indi-
shareholders, among rectly from the power used for its operations
others, to do more to respectively. Scope 3 emissions – those stem-
tackle emissions. ming from the use of Chevron’s products by its carbon capture and storage (CCS) and hydrogen.
customers – were not part of the net-zero aspi- Last month, Chevron unveiled plans to triple
WHAT NEXT: ration, but the company said it would still seek its investments into lower-carbon initiatives to
The main focus will be to incorporate Scope 3 emissions into its targets. $10bn by 2028. This includes $2bn earmarked
reducing carbon intensity, To this end, Chevron will establish a portfolio for lowering the carbon intensity of the compa-
which will still allow oil carbon intensity (PCI) target inclusive of Scope ny’s operations.
and gas production to 1 and 2 and Scope 3 emissions.
grow. What next?
Cautious approach Chevron has set a few goals that will be incorpo-
The new targets come after Chevron’s share- rated into its push to decarbonise. These include
holders voted earlier this year for the company increasing carbon capture and offsets to 25mn
to reduce its Scope 3 emissions, in defiance of tonnes per year (tpy) by 2030 through the devel-
its board. Chevron’s CEO, Mike Wirth, had opment of regional hubs in partnership with
previously resisted committing the company other companies. Also by 2030, it is planning to
to any target that he said might be unrealistic or ramp up renewable natural gas (RNG) produc-
undeliverable, and the super-major’s insistence tion to 40,000mn British thermal units (11mn
on describing the new goal as an aspiration illus- cubic metres) per day, raise its renewable fuels
trates its ongoing caution on this. output capacity to 100,000 barrels per day (bpd)
Wirth had previously also said that only a and hydrogen production to 150,000 tpy.
The new targets minority of Chevron’s shareholders support Beyond this, Chevron has made a series of
come after the strategies used by European super-majors, announcements about various partnerships
Chevron’s including ramping up investment in solar and it has formed in recent months to pursue new
wind power at the expense of fossil fuel produc-
technologies aimed at promoting lower-carbon
shareholders tion. Indeed, Chevron’s latest announcement energy. The super-major hopes that some of
shows that it still intends to grow its oil and gas these technologies can ultimately be scaled up.
voted earlier output but reduce the carbon intensity – which Few further details of how Chevron plans
contrasts with absolute targets to cut emissions to achieve its targets have emerged as yet, but
this year for among European super-majors. it is clear that Chevron is trying to respond
“Our strategy is straightforward: be a leader to its shareholders’ vote on tackling Scope 3
the company to in efficient and lower-carbon production of tra- emissions. The plans are likely to come under
reduce its Scope ditional energy, in high demand today and for fire from environmental groups and activist
shareholders for not going far enough, though.
years to come, while growing low-carbon busi-
3 emissions. nesses that will be a bigger part of the future,” Indeed, activist shareholder group As You Sow
Wirth wrote in the company’s new report.
has already criticised the 2028 emissions inten-
The super-major has set an interim target to sity target as being insufficient.
reduce emissions intensity by more than 5% Others may be more receptive to the cautious
compared to 2016 levels by 2028. It also said it moves Chevron is making. And the new tar-
would publish a PCI methodology document gets also put pressure on rival US super-major
and online tool to enable third parties to calcu- ExxonMobil, which continues to resist setting
late PCI for energy companies. any kind of net-zero goal – even one that is
This approach will include renewable fuels, described as only an aspiration.™

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