Exxon Mobil Corp. (NYSE: XOM) has set its first company-wide targets for cutting the emissions from its operations, as the largest U.S. oil group attempted to curb its contribution to the threat of climate change.
The company is setting targets to reduce leaks of methane by 15%, and flaring of unwanted gas by 25%, by 2020, and will be deploying new equipment at its operations to achieve those goals.
Methane, which is the principal component of natural gas, is a potent greenhouse gas, with a contribution to global warming that is many times greater than carbon dioxide.
The announcement followed pressure from investors for Exxon Mobil and other energy companies to clarify how they would cope with international pressure for curbs on greenhouse gas emissions.
Sara Ortwein, president of Exxon Mobil’s shale oil and gas subsidiary XTO Energy, said the initiative reflected the group’s commitment to “improving the efficiency of our operations and reducing and mitigating greenhouse gas emissions.”
She added that Exxon Mobil aimed to meet demand for oil and gas while “doing it in an environmentally responsible manner.”
Matt Watson of the Environmental Defense Fund described the move as “an important and welcomed step” but said “greater ambition” would be needed.
He added: “In a carbon-constrained world, oil and gas industry leaders should seek to virtually eliminate emissions of this highly-potent greenhouse gas.”
Exxon Mobil was one of eight large oil groups, also including BP Plc, Royal Dutch Shell Plc and Total SA, that last year signed up to a set of “guiding principles” for reducing releases of methane from their operations. BP has also set a target of “zero net growth” in emissions from its operations out to 2025.
Exxon Mobil’s planned reductions in methane leakage of 15% from 2016 levels by 2020 will come from rolling out new technologies and practices, such as infrared detection of leaks from pipelines and other equipment, which have been first deployed at XTO operations in Texas. Exxon Mobil has already cut its emissions by 2% last year as a result of the initial implementation on those
Methane leakage has been a politically controversial issue in the U.S., with the Trump administration seeking to roll back restrictions imposed under President Barack Obama, but Exxon Mobil has suggested some regulation is needed.
Ortwein wrote in a blog post: “The correct mix of policies and regulations could help the entire industry raise the bar.”
The planned 25% reduction in flaring is intended to be achieved through finding alternative uses for the unwanted gas that is currently being burnt off, mostly in Exxon Mobil’s operations in West Africa. The company is looking at a range of options for the gas, including selling it to other businesses and using it in Exxon Mobil’s own operations.
At its annual meeting on May 30, Exxon Mobil will face a shareholder proposal calling for the appointment of an independent chairman separate from the CEO, to strengthen governance in the face of the “unprecedented rate of change facing companies regarding climate change.”
A resolution calling for an independent chairman was defeated last year, winning the support of investors with about 38% of Exxon Mobil’s shares, slightly less than similar proposals secured a decade ago.
However, Exxon Mobil has in recent years been responding to shareholder calls for greater oversight of the company, and last year agreed to publish a report on the possible impact of climate policies on its operations.
Recommended Reading
California Resources Corp., Aera Energy to Combine in $2.1B Merger
2024-02-07 - The announced combination between California Resources and Aera Energy comes one year after Exxon and Shell closed the sale of Aera to a German asset manager for $4 billion.
Equinor Brings Solar Plant Online in Brazil
2024-03-08 - Equinor says the Mendubim solar plant will produce 1.2 terawatt hours of power annually.
SCF Acquires Flowchem, Val-Tex and Sealweld
2024-03-04 - Flowchem, Val-Tex and Sealweld were formerly part of Entegris Inc.
Weyerhaeuser, Lapis Energy Enter Carbon Sequestration Exploration Pact
2024-02-29 - The exploration agreement covers 187,500 acres across three states with five potential carbon sequestration sites.
TotalEnergies Buys Majority Stake in Ecoslops Provence JV
2024-03-01 - TotalEnergies bought out its joint venture partner to become the sole shareholder in cleantech venture Ecoslops Provence.