Thirteen international oil and gas companies have committed $1 billion to reduce greenhouse gas emissions.
The organization, called the Oil and Gas Climate Initiative (OGCI), will support the goals of the Paris Agreement, which will include unlocking large-scale investments in carbon capture, use and storage (CCUS) and supporting new taxes and economic incentive aimed at reducing emissions.
The OGCI member companies are BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Pemex, Petrobras, Repsol, Saudi Aramco, Shell and Total. They account for 32 percent of global operated oil and gas production, OGCI said.
The CCUS is designed to help decarbonize multiple industrial hubs around the world, starting with hubs in the United States, United Kingdom, Norway, the Netherlands and China.
“The program seeks to create a commercially viable, safe and environmentally responsible CCUS industry and double the amount of carbon dioxide that is currently stored globally before 2030,” according to an OGCI statement.
The OGCI also wants to build on the industry’s reduction in methane emissions (9 percent in 2018) and to include carbon emissions in hope that future temperature increases will not exceed 2 degrees Celsius.
To complement its methane emissions-intensity target, OGCI seeks to reduce collective average carbon intensity by 2025. The goal will take into account carbon dioxide and methane emissions from members’ aggregated upstream oil and gas operations emissions equivalent in 2017.
“Member companies have developed a baseline and are aligning methodology and assumptions to work towards the collective target. Reducing carbon intensity involves actions including improving energy efficiency, minimizing flaring, upgrading facilities and co-generating electricity and useful heat,” OGCI said.
Each of the OGCI member companies pledged to support policies that either creates a value on carbon or increases the cost of carbon, such as a carbon tax or a cap-and-trade program.
“Acknowledging the role that attributing a value to carbon plays as one of the most cost-efficient ways to achieve the low carbon transition as early as possible, OGCI supports the introduction of appropriate policies or carbon value mechanisms by governments,” according to a news release by OGCI.
“Recognizing the urgency of responding to the climate challenge, all OGCI member companies support the consideration and introduction by governments of appropriate policies or carbon valuation mechanisms, such as through tax, trading systems, incentives or other market-based instruments appropriate to the profile of emissions, to the carbon mitigation opportunities and to the socio-economic situation of each jurisdiction,” OGCI said.
The fund has invested in 15 companies engaged in activities that parallel the goals of OGCI. For example, one company manufactures low-emissions ferroalloys and ultimately emissions-free steel. Another company uses smart control solutions in office buildings to reduce energy use. And, another provides hybrid and plug-in-hybrid electrification solutions for commercial vehicles.
Alex Mills is the former President of the Texas Alliance of Energy Producers.