The oil and gas industry is one of the biggest contributors to global greenhouse gas emissions, especially methane, which is a potent warming agent.
However, some companies are taking steps to address this challenge and align their operations with the goals of the Paris Agreement.
At the UN's COP28 climate talks in Dubai on Saturday, 50 oil and gas companies representing 40% of global production pledged to decarbonize their operations by 2050.
What are the companies committing to?
Mahmoud Khaled /COP28 via Getty Images
The companies that signed the pledge are members of the Oil and Gas Climate Initiative (OGCI), a voluntary alliance of 13 major oil and gas companies that aims to accelerate the industry's transition to a low-carbon future.
The OGCI members include BP, Chevron, Eni, Equinor, ExxonMobil, Occidental, Petrobras, Repsol, Shell, Saudi Aramco, TotalEnergies, CNPC, and Reliance Industries.
The pledge covers the companies' operational emissions, also known as Scope 1 and 2 emissions, which are the direct emissions from their own activities and the indirect emissions from the electricity they use.
The companies committed to reduce the carbon intensity of their operational emissions by 50% by 2030 and to achieve net-zero operational emissions by 2050.
To achieve these targets, the companies will implement various measures, such as increasing energy efficiency, reducing flaring and venting, deploying carbon capture, utilization, and storage (CCUS) technologies, investing in renewable energy and hydrogen, and offsetting any remaining emissions through nature-based solutions.
The companies also pledged to report their progress annually and to have their emissions data verified by independent third parties.
The pledge by the OGCI members is significant for several reasons.
First, it shows that the oil and gas industry is responding to the growing pressure from investors, regulators, customers and civil society to take action on climate change.
The pledge comes after a series of landmark events this year, such as the ruling by a Dutch court that Shell's plans to reduce carbon intensity are inadequate, the shareholder votes at Exxon and Chevron that demanded more climate action from the companies, and the announcement by the International Energy Agency (IEA) that no new oil and gas fields should be developed if the world is to reach net-zero emissions by 2050.
Second, the pledge demonstrates that the oil and gas industry is willing to collaborate and share best practices to achieve a common goal.
The OGCI members account for about 30% of the world's oil and gas production and 20% of the world's energy-related greenhouse gas emissions.
By working together, they can leverage their scale, expertise and resources to accelerate the deployment of low-carbon solutions and to influence the rest of the industry and the value chain.
Third, the pledge contributes to the global efforts to limit the rise in global temperature to 1.5 degrees Celsius above pre-industrial levels, as stipulated by the Paris Agreement.
According to the UNEP, the oil and gas sector is responsible for about 15% of global energy-related CO2 emissions and 40% of global methane emissions.
Methane is a particularly potent greenhouse gas, with a warming potential 84 times higher than CO2 over 20 years.
Reducing methane emissions from the oil and gas sector is therefore one of the most cost-effective and immediate ways to mitigate climate change.
However, the pledge by the OGCI members is not enough to address the full impact of the oil and gas industry on the climate.
The pledge does not cover the emissions from the use of their products, also known as Scope 3 emissions, which account for about 85% of the industry's total emissions.
Some of the OGCI members, such as BP, Shell, and TotalEnergies, have already set net-zero targets for their Scope 3 emissions, but others, such as ExxonMobil, and Chevron, have not.
Moreover, the pledge does not address the issue of expanding oil and gas production, which is incompatible with the IEA's net-zero scenario.
Therefore, while the pledge by the OGCI members is a welcome step, it is not sufficient to align the oil and gas industry with the 1.5-degree goal.
The industry needs to do more to reduce its emissions across the entire value chain, to phase out fossil fuels, and to invest in clean energy alternatives. Only then can the industry play a positive role in the transition to a net-zero economy.
