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WHAT EXXON IS PROMISING: U.S. oil and gas giant ExxonMobil is setting short-term targets for reducing greenhouse gas emissions and vowing to begin publishing data on the use of its products, in response to investor pressure after years of resistance.
What Exxon is doing: The company announced on Monday it will reduce the intensity of its emissions from its production of oil and gas and from methane, setting targets for 2025.
Exxon also plans to eliminate routine flaring, or intentional burning, of excess natural gas by 2030 and, in the meantime, reduce its flaring intensity.
And Exxon said that next year, it will begin reporting its Scope 3 emissions, the indirect emissions coming from the use of its products. U.S. oil companies have been slower to address those emissions than European counterparts, such as BP and Shell.
Exxon has only recently switched from planning to spend more on its traditional oil and gas business after struggling through the pandemic.
The company’s new short-term actions are consistent with the goals of the Paris Agreement, Exxon said. Exxon also nodded to the need to reduce emissions to net-zero across the world by 2050, without committing for itself as a company to achieve such a target for midcentury.
“We respect and support society’s ambition to achieve net-zero emissions by 2050 and continue to advocate for policies that promote cost-effective, market-based solutions to address the risks of climate change,” said Darren Woods, chairman and chief executive officer of Exxon.
Details lacking, ambitions lagging: Despite Exxon’s rhetoric, Ben Ratner, a senior director with the Environmental Defense Fund+Business, told Josh he considers the new commitments to be “pretty lackluster.”
Reducing emissions based on intensity is not the same as targeting absolute emissions reductions, as the European oil majors have done.
“It’s one thing to purport to be adhering to Paris and quite another to deliver plans that are actually Paris-aligned,” Ratner said.
Disclosing Scope 3 emissions data is a “baby step,” he said, but Exxon also should be setting a target to reduce pollution from the use of its products and lobby for policies to help it do so. Exxon reiterated its support for carbon pricing, but it hasn’t put much muscle behind lobbying for legislation.
Ratner also considers Exxon’s commitments regarding addressing methane and flaring to be hollow.
He said Exxon should be aiming to end flaring by 2025, not 2030.
Other U.S. peers, led by Chevron, have outperformed Exxon on reducing operational flaring.
Exxon has also not pushed Texas oil regulators to limit the practice in the Permian Basin, where flaring is most prevalent.
Exxon has refused to join the Oil and Gas Methane Partnership, an initiative of mostly European oil companies led by the U.N. that purports to follow “new gold standard reporting” on methane emissions. Exxon belongs to American Petroleum Institute’s Environmental Partnership, a voluntary program whose participants work to limit leaks of methane and reduce emissions of related pollutants called volatile organic compounds.
“It’s very hard to put stock in Exxon’s methane commitment because it is not backed by high quality data reported in a transparent manner,” Ratner said.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
TAKING STOCK OF THE US AND PARIS, 5 YEARS IN: The U.S. has led the world in reductions of greenhouse gas emissions since 2005, mostly through private-sector innovation and market forces of cheap natural gas and renewables replacing coal.
Nevertheless, the U.S. before this year was not on pace to meet a target set by the Obama administration as part of the Paris Agreement in 2015 to reduce emissions 26% to 28% from 2005 levels by 2025, as Josh reported in a story this weekend charting that gap and what needs to be done to close it.
President-elect Joe Biden was absent from an online summit this weekend marking the fifth anniversary of the Paris Agreement. But in a statement, he reiterated his pledge to rejoin it on Day One and to meet and exceed the pace of emissions cuts envisioned by the Obama administration in order to reach net-zero emissions by 2050.
A lot of work to do: U.S. emissions were only 12% below 2005 levels as of January, according to the Rhodium Group, well off even the Obama targets. Steady levels of emissions reductions in the early part of last decade have worn off, while President Trump has taken the government’s foot off the gas pedal.
“We are certainly not decarbonizing at a pace needed to meet a target like that,” said Tom Cyrs, a research associate at the World Resources Institute.
The U.S. might have an outside chance of achieving the Obama-era target but only inadvertently because of a once-in-a-century pandemic causing a record drop in emissions this year.
Emissions are expected to rise again in 2021 as the economy recovers.
Ambition vs. reality: Environmental groups close to the Biden transition team say he’d have to set a goal of reducing emissions 45% to 50% below 2005 levels by 2030 in order to stay on track for net-zero emissions by 2050. That could be a tough lift to achieve without cooperation from Congress.
“It’s a big challenge for Biden,” said Zeke Hausfather, a climate scientist and energy systems analyst at the Breakthrough Institute. “There will be a lot of pressure just to make a big commitment even if we don’t see a pathway to it. At the same time, there is danger for him setting a commitment so divorced from what we can accomplish that it isn’t motivating or sets us up for failure.”
CHINA’S NEW COMMITMENTS LEAVE OUT COAL: China has begun fleshing out its commitment announced this year to reach carbon-neutrality by 2060, but is still refusing to detail how or if it will reduce its reliance on and support for coal.
President Xi Jinping announced at the Paris online summit that the world’s largest greenhouse gas emitter would reduce its carbon intensity by over 65% by 2030. China also pledged to triple its wind and solar power capacity to 1.2 billion kilowatts.
But China will continue to increase its emissions, and Xi did not commit to shortening the timeline for beginning to lower emissions from the current target of “before 2030.”
That would require China kicking its coal habit, which provides steady employment and cheap power.
“The lack of specifics on coal consumption or exports was a real disappointment although no surprise,” Jane Nakano, senior fellow in the Energy Security & Climate Change Program at the Center for Strategic and International Studies, told Josh.
Biden and his foreign policy team have indicated tackling China’s coal policies at home and abroad will be a key focus of the administration’s climate agenda, so Nakano suggested Xi may be waiting things out.
“To the extent that China may need cards to trade, it may make a good sense for the Chinese government to wait and see what the Biden administration does before announcing plans and actions on coal consumption and export,” Nakano said.
BRITAIN TO END SUPPORT FOR FOSSIL FUELS OVERSEAS: The commitment, which Prime Minister Boris Johnson announced Saturday, means the United Kingdom will no longer finance exports of fossil fuels or offer funding for new crude oil, natural gas, or coal projects overseas.
The announcement is significant, and it’s meant to be a show of climate ambition ahead of the UK hosting global climate talks next year. The UK government has supported 21 billion Euros of oil and gas exports over the last four years, according to Johnson’s office. That financing will come to a halt under the new policy, with very few exceptions for natural gas plants and other projects that would still align with the Paris Agreement goals.
The policy will be implemented after a brief consultation with industry and other stakeholders, slated to end in early February, Johnson’s office said in a statement. UK Export Finance is already ramping up investments in renewable energy.
Environmentalists such as Oil Change International welcomed the UK’s announcement, but added the government must go further by ending fossil fuel subsidies.
CANADA RAISES CARBON TAX: Prime Minister Justin Trudeau announced a more ambitious climate plan Friday that includes a higher carbon price, which will start increasing $15 per ton each year in 2022 and reach $170 per ton in 2030.
Canada returns the proceeds of its carbon fee back to households as rebate payments, and under the new climate plan, people will receive those payments quarterly instead of annually. The country also says it will “explore the potential of border carbon adjustments,” which could tax imported goods that are carbon intensive or from countries that don’t have a carbon price.
The increased carbon tax is part of a broader climate plan that includes $15 billion in clean energy and climate investments over 10 years, such as new initiatives to improve building energy efficiency, promote zero-emission vehicles, and support more renewable energy.
BIDEN SAYS VILSACK WILL WORK ON CLIMATE: Tom Vilsack, who led the Agriculture Department during all eight years of the Obama administration, helped develop Biden’s campaign plan to boost rural regions and will now oversee its implementation, the president-elect said Friday.
“That includes making American agriculture the first in the world to achieve net-zero emissions and create new sources of income for farmers in the process, by paying farmers to put their land in conservation and plant cover crops that use the soil to capture carbon,” Biden said.
Vilsack’s nomination was welcomed by many Democrats and environmental groups, who said he would help the Agriculture Department tackle greenhouse gas emissions from the sector. But other liberal environmental groups sharply criticized Vilsack, saying he failed black farmers during his last tenure at the agency.
Perhaps in response, Biden, during his remarks Friday, also said Vilsack “will ensure that USDA promotes true racial equity and inclusion.”
UNIONS AND GREENS BACK SENATE NUCLEAR BILL: A group of labor, environmental, and business groups wrote a letter to Senate leaders Friday endorsing a bipartisan bill that would set up the first federal subsidies program to support nuclear plants at risk of shutting down.
The Senate Environment and Public Works Committee approved the legislation, the American Nuclear Infrastructure Act of 2020, this month.
Liberal Democrats and some environmental groups, including the Natural Resources Defense Council, oppose the bill.
But more centrist groups including Third Way, Clean Air Task Force, and C2ES, note in the letter that “keeping reactors online preserves jobs, avoids carbon emissions, and prevents air pollution.”
SENATE APPROVES NDAA WITH NORD STREAM 2 SANCTIONS: The Senate passed its defense policy bill Friday, setting up a year-end veto fight with Trump.
The National Defense Authorization Act was approved by both chambers by veto-proof majorities.
The NDAA would expand sanctions on Russia’s Nord Stream 2 natural gas pipeline to Germany, a measure Trump supports. He’s vowed to veto the bill for unrelated reasons regarding lawsuit liability protection for Big Tech.
GLOBAL POWER DEMAND TOOK A HIT IN 2020: Global demand for electricity fell 2% this year due to the pandemic, the largest annual decline since the mid-20th century, the International Energy Agency said in a new report today.
The share of renewable electricity generation, however, grew this year by almost 7%, while coal generation fell 5%, nuclear generation fell 4%, and gas generation fell 2%. The IEA expects renewable electricity generation will continue to grow in 2021, as global electricity demand sees a slight rebound of around 3%. But coal generation will also bounce back by 3%, as will gas generation by 1%, which would contribute to a 2% increase in power sector emissions globally next year, the IEA said.
The Rundown
Reuters Biden considers former EPA chief McCarthy for domestic climate czar -sources
New York Times For Biden’s economic team, an early focus on climate
Washington Post A pandemic side effect: Used masks polluting California coastal waters
Wall Street Journal SEC schedules vote on controversial extractive industry rule
Wall Street Journal Explosion hits oil tanker at Saudi port
Calendar
MONDAY | DEC. 14
The House and Senate are out
