Chevron Corp. took a step closer to the climate policies staked out by its largest European rivals as chief executive officer Mike Wirth laid out a “pathway” toward net zero emissions in the coming decades.
For the first time, the U.S. oil giant said it intends to pursue a continuous journey toward achieving net zero carbon emissions from its own operations, though it sees major technology and policy hurdles along the way. The company also set out new targets to lower emissions per barrel pumped by a third over the next seven years.
“What we did there is line out a pathway toward net zero,” Wirth said Tuesday, referring to a slide from its investor day presentation. “If you look at others who have made net-zero commitments, the assumptions and caveats of the way they describe their aspirations, they’re saying the same thing: that we’re going to need big offset markets, many big technology breakthroughs, changes in policy, et cetera.”
Unlike European peers BP plc and Royal Dutch Shell plc, the American supermajors have been unwilling to commit to mid-century targets for zeroing out carbon emissions. Chevron and Exxon Mobil Corp. are concerned about eroding returns by pivoting aggressively to new, unfamiliar business lines. But growing investor pressure has resulted in both companies scaling back growth aspirations and bolstering environmental plans.
Chevron’s goals fall short of the explicit targets laid out by BP and Shell and its short-term aims focus on emissions intensity rather than absolute levels of pollution, leaving wiggle room for the company to increase overall production. Unlike Exxon’s targets, Chevron included its non-operated positions in its new goals.
“It’s not about selling things that are higher carbon,” Wirth said, drawing a contrast with European peers. “Our new investments and our growth will be in lower carbon-intensity assets so that reduces net intensity for the portfolio.”
Despite its pledge to address emissions, Chevron will still be a fossil-fuel-dominated company in 10 or 20 years, Wirth said in an interview with Bloomberg TV.
“The world will be using more oil and gas 20 years from now than it is today,” he said. “We intend to be one of the very best companies in this industry and our shareholders deserve for us to continue to deliver than to them.”
Earlier this year, Chevron created a $300 million venture capital fund for investments in novel technologies such as hydrogen, geothermal power and carbon capture. Fending off criticism that the oil giant is taking the energy transition too slowly, Wirth said that building capacity slowly is key to scaling new technology.
“The kind of slow and steady that we and some others have taken was the better approach” in U.S. shale, he said. “As we’re looking at some of these new technologies, it’s very similar. You want to incrementally build.”
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