Earlier this week, the head of EDF’s energy program, Mark Brownstein, asked whether the oil and gas industry was serious about climate and proposed that Monday’s annual CEO meeting of the Oil and Gas Climate Initiative companies, which includes BP, Exxon, Shell and others, could provide an answer.
I attended the meeting and listened for a real plan to transition to a low carbon economy. Though there were some bright spots, it was clear that however serious the industry is about climate, it’s not serious enough. If OGCI companies, individually and collectively, are going to demonstrate that industry can be part of the climate solution at the necessary pace and scale, 2020 is going to have to be a big year.
On the positive side, there is widespread agreement among OCGI members that substantial changes must be made to the energy system to reduce emissions. There were also encouraging reports about advances in methane monitoring and stated ambition to accelerate carbon removal technology, whether from the energy system or the atmosphere.
With the notable exception of Shell, however, which is taking steps to halve its net carbon footprint by 2050, no CEO stepped forward with a firm commitment on science-based targets that encompass their operations and products. A participant from civil society asked whether Shell’s target could be an initial OGCI target, but no CEO answered the call.
The gap between industry’s rhetoric and reality is amplified by its overinvestment in the kind of fossil fuel projects that sparked the climate crisis in the first place. According to a recent Carbon Tracker report, there are already $50 billion worth of planned oil and gas projects that will exceed Paris emission limits, with more in the queue for approval. Without firm emission reduction commitments — and capital to match them — it’s impossible to square the box for a cleaner energy future. One CEO pointed out that there are a myriad of ways to meet a less than 2°C future. But, there are also countless ways to exceed it. OGCI has work to do to raise the ambition of its actions and show how its math adds up to achieving internationally shared climate goals.
In the short term, a key opportunity for the OGCI companies to prove their potential is to first accelerate methane reductions across the global supply chain, where the group has shown real leadership.
- For OGCI’s self-reporting on its methane target to be credible, the methods must be based on accurate data. However, today’s reporting relies on desktop-based methods that underestimate actual emissions. The good news is, BP CEO Bob Dudley and Chevron CEO Mike Wirth were right that there is tremendous progress underway in better, faster and cheaper methods for conducting field monitoring and measurement. It’s time for OGCI to show its methane progress by measuring and reporting actual emissions versus reporting on estimated emissions derived by a spreadsheet formula. And to earn trust, much greater transparency is required on the breakdown of emissions results, and the measures taken to achieve them.
- Today, OGCI companies do business in major projects around the world where its methane target does not apply. Expanding the methane reduction target to all non-operated joint ventures would ensure coverage of roughly half of global upstream production and allow the industry to better manage risk as satellites work to fill in the picture of global emissions.
- OGCI must support the development of methane regulations and the explicit inclusion of methane in countries’ nationally determined climate plans. In a Climate & Clean Air Coalition press release, Total CEO Patrick Pouyanne said “We cannot do this alone. Involvement of government is essential to send the appropriate regulatory and economic signals to all concerned players. Strong and long-term policy support and regulations are critical to enable the oil and gas industry to invest in technologies and solutions.” Two immediate priorities should be filing comments to EPA opposing methane rollbacks and supporting the European Union in prioritizing ambitious methane action in the decarbonization package, including tackling lifecycle emissions from gas imported to Europe.
- OGCI Climate Investments has done fast work in identifying promising entrepreneurs, but clear pathways to broad global deployment across OGCI members are still lacking. Next year, OGCI-CI should strive to showcase big deployments that achieve big results, with greatly enhanced transparency over what was provided in 2019. For example, deployment of high frequency monitoring across all OGCI assets in a major production region, with publicly reported data on emissions, mitigation, and results relative to OGCI’s methane target.
In OGCI’s 2019 report, the first expectation of all OGCI member companies is to “support the Paris agreement and its aims.” But the annual CEO meeting revealed that there remains a major gap between the OGCI’s efforts and the scale of change required in the energy system to limit warming to well under 2°C. OGCI could still become a powerful force for progress, but time is running short.