A group of the world’s biggest oil and gas majors claims to have collectively increased low carbon investments by more than two-thirds last year, as the industry faced ongoing criticism for raking in record profits and using the bulk of the proceeds to reward shareholders and expand fossil fuel production.
The Oil and Gas Climate Initiative (OGCI) – a CEO-led group representing companies that collectively account for 30 per cent of global oil and gas production – said its 12 members had together increased spending on low carbon technologies, including through acquisitions, research and development (R&D), and project development, to $24.3bn in 2022.
The sum marks a 66 per cent rise in low carbon investment compared to the previous year, with renewable energy such as wind and solar accounting for more than half of the total.
Other low carbon technologies supported by the OGCI include blue and green hydrogen projects, synfuels, energy storage, and sustainable mobility, it said. The group also confirmed that investment in carbon capture utilisation and storage (CCUS) projects trebled between 2021 and 2022.
Members of the OGCI include CEOs of many of the world’s largest oil majors – including Saudi Aramco, BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Petrobas, Repsol, Shell, and TotalEnergies – who formed the group almost a decade ago to promote their efforts in support of the Paris Agreement.
However, the latest update comes as the industry continues to face fierce criticism for environmental campaigners and some investors, who have accused the sector of continuing to pursue further oil and gas expansion and failing to re-invest the bulk of the windfall they have enjoyed as a result of soaring energy prices in low carbon projects.
Since 2017, OGCI said its 12 members had collectively invested a total of $65bn in low carbon energy and technologies, yet estimates this year suggest just five of the group – ExxonMobil, Shell, BP, Chevron, and TotalEnergies – together hauled in $190bn in profits in 2022 alone.
With growing numbers of analysts projecting oil demand could peak worldwide before 2030, there are increasing concerns that oil and gas majors which fail to transition to a greener footing risk being stuck with stranded assets as fossil fuel demand declines.
Elsewhere in OGCI’s annual progress report, which was released yesterday, the group reveals its Scope 1 direct emissions have collectively fallen 17 per cent since 2017, equivalent to the removal of 27 million cars from the roads in one year.
However, the report provides no data on the industry’s Scope 3 emissions – those from the use of fossil fuel products which make up the lion’s share of the sector’s climate impact – but it claims firm’s absolute methane emissions have halved since 2017 while routine flaring has fallen by 45 per cent.
The industry is under growing pressure to tackle methane emissions from leaky pipes, with over 150 governments having signed up to the Global Methane Pledge to slash emissions of the potent greenhouse gas by 30 per cent this decade.
Last year the OGCI launched an industry wide campaign to achieve near-zero methane emissions from oil and gas assets by the end of the decade, with yesterday’s progress report confirming more than 90 companies have now signed up to the target.
The CEO-led group also said its member firms were “actively involved” in developing 40 large-scale carbon capture utilisation and storage (CCUS) hubs around the world, which it estimated could remove up to 300 million tonnes of CO2 a year by 2030.
OGCI’s executive committee chair, Bjorn Otto Sverdrup, claimed member firms had made “good progress” in 2022, but “we recognise that there’s more to do”.
“To tackle the climate challenge, we must accelerate action across our industry and other sectors,” he said. “As we head into COP, we see major opportunities for collective action on methane emissions and industry-wide efforts to reduce emissions from operations. Technologies such as carbon capture will also be vital to achieve the Paris Agreement goals.”
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