Chevron Corp. aims to reduce the intensity of greenhouse gas emissions from its oil production by 5% to 10% over a seven-year period ending 2023 as part of an ongoing effort to combat global climate change, the company said on Oct. 3.
Chevron, part of the Oil and Gas Climate Initiative (OGCI) along with Exxon Mobil Corp. and BP Plc, said it will also target a reduction of 2% to 5% in greenhouse gas emissions intensity from gas production over the same period.
However, Chevron's goals do not include plans to cut Scope 3 emissions or those from its customer's use of its fuels and other products.
The company said its measure of greenhouse gas intensity uses what it called equity basis, or combining direct and indirect emissions from its own production, subtracting those indirect emissions associated with electricity and steam that its operations exports, and dividing the result by production.
The method does not include customer emissions, but a spokesperson said it is willing to work with governments to address the issue.
The OGCI, formed in 2014, is a group of 13 major oil companies that account for 32% of global oil and gas production. It aims to reduce methane emissions and increase carbon efficiency. The companies have also been investing in carbon capture technology that traps carbon in caverns or porous spaces underground.
Chevron said it had so far spent more than $1 billion on carbon capture and storage projects in Australia and Canada and the investment is expected to reduce greenhouse emissions by about 5 million metric tons per year.
Earlier this year, Royal Dutch Shell said it planned to reduce carbon emissions from its oil and gas operations and product sales by 2% to 3% during the 2016-2021 period.
Shell's targets include Scope 3 emissions, unlike rivals BP and Total, which have limited their short-term targets on reducing carbon dioxide emissions to their own operations.
Energy companies are on the front line of a global transition to a low-carbon economy, with investors potentially on the hook for hefty losses if the companies do not overhaul their business models in time.
An emphasis on relationships backed by operational expertise and experience has helped these two private-equity-backed midstream operators continue to perform.
Seventeen oil and gas producers in the U.S. have filed for Chapter 11 so far this year but many more are close.
David Baggett, founder and managing partner of Opportune, says oil and gas companies are focused on short-term survival and lowering costs, which can already be seen by massive capex cuts among producers and the historic plunge in rig counts.