While the US Climate Alliance has grown significantly in recent months, portending increases in carbon reduction technology investment and state policy changes related to greenhouse gas (GHG) emissions, one industry group has been proactively flexing its sizable carbon reduction investment muscles.
As of mid-March 2019, 23 states are moving forward with substantial GHG reduction goals and carbon initiatives in line with the Paris Agreement. We blogged about this Alliance recently, as a signal for industry in Alliance states to review their carbon footprints with possible reduction mandates coming down the administrative pipeline. While Alliance states’ reduction goals will be policy driven mostly focused externally at industry and coming from a unified group of state executives, substantial momentum and environmental stewardship investment has been coming from within industry for the last several years, most notably from the oil & gas sector through its own alliance of top executives called the Oil and Gas Climate Initiative (OGCI).
Investment in Innovation
The OGCI was formed in 2014 and is led by the CEOs of 13 of the world’s biggest oil and gas powerhouses. The OGCI’s goal is to “lead the industry response to climate change” by developing and employing carbon reduction technologies within its considerable sectors of influence. The OGCI formed a $1 billion investment fund, Climate Investments, focused on developing tangible, industry-driven solutions to three challenges:
- Reducing Methane Leaks during production, delivery and usage of oil and gas
- Reducing Carbon Dioxide Emissions by increasing energy efficiency in power industry and transport
- Mitigating Carbon Dioxide produced during power generation or industrial processes by using it in products or storing it
The Climate Investment fund has already made investments in technical advances in each of these areas in support of the OGCI goal of reducing methane intensity of members’ collective upstream operations to below 0.25% by 2025. Further, the Initiative has an ultimate goal of near-zero methane emissions from the full value chain (upstream, transport, distribution, downstream) – an ambitious undertaking to say the least. The pathway to reach that goal (as stated in OGCI’s 2018 annual report) will include expansion of leak detection and repair campaigns, replacing or upgrading high emitting devices, and significant reductions in flaring.
Executives Keyed on Results
OGCI members have been the subject of litigatory actions related to climate change and have been the focus of GHG emissions studies highlighting the carbon reduction challenges and mandates facing their industry. While there is a growing push within many individual states to further regulate and mitigate their GHG emissions, the oil and gas industry is proactively putting billions of dollars to work in funding and creating its own solutions. As carbon reduction and mitigation technologies funded by industry executive initiatives come to the market, and GHG regulatory policies from state executives are promulgated, attention on quantification of results and operational efficiency gains will be at an all-time high from these leaders.
If there’s one thing that executives (either state or industry) are focused on is response to and results from their initiatives. It is likely that all levels of the oil and gas value chain, upstream and down, will be faced with increasing internal and external GHG emission awareness and perhaps more involved reporting procedures.
header image: https://oilandgasclimateinitiative.com/