Oil supermajors rank among the biggest polluters in the world—a hardly surprising fact. In recent years, however, Big Oil has reduced its greenhouse gas emissions, in what may come as a surprising fact about the dirtiest industry globally.
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The world’s five largest oil firms—ExxonMobil, Chevron, Royal Dutch Shell, BP, and Total—cut their combined emissions by 13 percent, starting from 2010 and ending in 2015, the latest year with available comprehensive data, a report by Bloomberg New Energy Finance (BNEF) released this week showed.
BP cut its pollution the most, by 25.5 percent, while the largest polluter among listed companies—Exxon—reduced its emissions by 14 percent. The oil supermajors—excluding Chevron, which only started reporting emissions in 2012—reduced their combined greenhouse gas emissions by 56.7 million tons between 2010 and 2015, according to the BNEF report.
The emissions reduction this decade is in stark contrast with the trends in previous decades, when warnings of climate change were still new, and when corporations were actively lobbying for ignoring such warnings.
While some of Big Oil’s reduced emissions could be attributed to the reduced operations after the 2014 oil price crash, the five supermajors have all adopted climate, energy efficiency, and pollution-reduction policies, the BNEF report says.
The biggest oil and gas companies in the world have come under pressure from shareholders to disclose their emissions and vulnerability to climate change and climate policies. Moreover, the oil and gas supermajors are all betting on natural gas as the ‘bridge fuel’ between the most polluting energy sources—such as coal—and clean energy. Natural gas is quite a substantial portion of all those majors’ businesses, investments and profits. Adopting greenhouse emission-reduction policies and reporting on progress is also a way to clean up (at least a bit) the tarnished image that oil companies have in society.
According to the Carbon Majors Report 2017, published by environmental non-profit group CDP in cooperation with the Climate Accountability Institute, the 100 biggest fossil fuel producers account for 71 percent of global industrial greenhouse gas (GHG) emissions.
Since 1988, the highest emitting investor-owned companies have been Exxon, Shell, BP, Chevron, Peabody, Total, and BHP Billiton, according to the environmental report. The biggest state-held polluters include Saudi Aramco, Gazprom, National Iranian Oil, Coal India, Pemex, and PetroChina.
According to the Carbon Majors Report, all five oil supermajors contribute a lot to global greenhouse gas emissions.
So those companies cutting emissions this decade could have a significant impact on curbing pollution.
Shell, for example, says that its direct GHG emissions from facilities it operates were 70 million tons on a CO2-equivalent basis in 2016, down from 72 million tons of CO2 equivalent in 2015. Shell attributed the lower direct emissions to overall reduction in flaring, Quest carbon capture and storage (CCS) project in Canada’s oil sands, divestments, and maintenance shutdowns. The indirect emissions increased due to the inclusion of BG operations.
Total’s direct GHG emissions dropped by 23 percent between 2010 and 2016, the French company says.
In the U.S., Exxon and Chevron have adopted strategies to reduce emissions. Like the other supermajors, Exxon is betting on investing in natural gas, as well as on improving energy efficiency, and reducing flaring and venting. Chevron is increasing the weighting of gas assets in its portfolio, and is committed to flare reduction, CO2 injection, energy efficiency, research and development, and biofuels.
Unlike in the past decades, now all five supermajors (including Exxon) are using the word ‘climate change’ and adopting action plans to curb emissions. They are well aware that their shareholders know that they are some of the biggest pollutants.
Commenting on the BNEF report, its author Laura McIntyre-Brown told Bloomberg:
“This is a reflection of growing pressure from shareholders, investor groups and civil society for more disclosure of greenhouse gas emissions, as well as setting reduction targets… There’s also an evident trend of increased emissions disclosure among many of the biggest companies.”
With oil and gas expected to continue to dominate energy supply, Big Oil reducing a fraction of their emissions is a sign that there’s no going back on policies to fight climate change.