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A FIRST FOR US OIL COMPANIES: ConocoPhillips’ $9.7 billion deal to buy Concho Resources made the headlines yesterday, but tucked within that announcement was an update to the oil company’s climate plans: The Texas-based producer is the first U.S. oil company to target net-zero emissions by 2050.
“The world is increasingly demanding global action to address climate change,” said Ryan Lance, ConocoPhillips CEO.
ConocoPhillips is aiming to reach net-zero emissions for its operations by 2050, the company announced Monday. It is also significantly strengthening its greenhouse gas intensity targets, setting a goal to reduce its emissions intensity by 35% to 45% in the next decade (up from a 5% to 15% goal previously).
The oil company also says it will strive to eliminate routine flaring, a source of methane emissions, by 2025. In addition, the company will include a new performance metric related to environmental, social, and corporate governance (ESG) in executive and employee compensation.
It’s a change in tone for U.S. oil companies: While several European oil majors have recently been more vocal about addressing emissions (BP, Shell, and others set net-zero goals earlier this year), U.S. companies have focused on oil and gas production.
The reasoning could, in part, be because U.S. oil companies aren’t getting the same sort of pressure from the federal government to address climate change. Environmentalists have suggested U.S. oil companies’ tone might change if Democratic nominee Joe Biden is elected, given his plans to aggressively pursue emissions reductions from the U.S. economy.
Even so, ConocoPhillips’ announcement shows at least some U.S. oil companies are feeling the intensifying pressures from the public and investors that are driving more and more corporations to strengthen their climate goals.
ConocoPhillips’ goal still lags European oil companies: The Texas-based producer’s new target doesn’t include anything on indirect (or scope 3) emissions, whereas BP and Shell both pledge to partially address the carbon intensity of their products.
Instead, ConocoPhillips pledges to advocate for a carbon price to address scope 3 emissions. The oil company backs the carbon dividend approach proposed by the Climate Leadership Council.
ConocoPhillips also says it sees a need for increasing investment in oil and natural gas, even under a scenario where the world meets the Paris climate agreement’s target. The oil company cites estimates from the International Energy Agency of roughly $13 trillion in investment in oil and gas over the next two decades.
“On average that is a $650 billion annual investment, which is greater than the average annual investment of the oil and gas industry over the last decade,” Lance said.
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BIDEN’S ‘MURKY’ STANCE ON NATURAL GAS EXPORTS: Biden’s aggressive plans to address climate change are largely silent on if would promote natural gas use overseas, a key question since 85% of the world’s emissions come outside the U.S. and many developing countries are turning to gas as a cleaner alternative to coal.
In his only public comments as a presidential candidate, Biden said in a CNN town hall that he’d support banning exports depending on what “they’re replacing,” seemingly leaving open the possibility of exporting to countries switching from coal to gas.
Collin Rees, a senior campaigner with Oil Change U.S., a liberal environmental group, said Biden’s “murky” stance on natural gas exports means he isn’t serious about reducing global use of fossil fuels. Oil Change International produced a report last year that showed the carbon emissions just from burning gas are enough to overshoot climate goals.
“The absence of a discussion on constraining LNG exports tells me they aren’t planning to do much here,” Rees told Josh for a story running in our magazine this week.
Silence means acceptance? Industry groups are interpreting Biden’s reluctance to campaign against fossil fuel exports as a sign he’d follow the mold of the Obama administration, which supported shipping natural gas overseas when he was vice president and approved an initial batch of export terminals.
“I am hard-pressed to see how his policies shift that dramatically,” said Charlie Riedl, executive director for the Center for Liquefied Natural Gas, who said he has spoken with outside advisers to the Biden campaign.
VOTERS LIKE BIDEN’S BIG SPENDING ON CLIMATE: Biden’s $2 trillion plan to invest in clean energy and infrastructure is popular with voters, according to a New York Times and Siena College poll out this morning.
The national poll of likely voters found 66% support Biden’s “$2 trillion climate plan.” Voters are more split on the issue of fracking, which garnered 44% support and 42% opposition.
THE ROOM WHERE IT ‘NEVER HAPPENED’: ExxonMobil rebuked President Trump yesterday after the president during a campaign rally suggested he could raise more money than Biden by calling oil executives and granting favors in exchange for their support.
Trump described a hypothetical conversation with Exxon.
“How are you doing? How’s energy coming? When are you doing the exploration? Oh, you need a couple of permits?”
“When I call the head of Exxon I say, ‘You know, I’d love (for you) to send me $25 million for the campaign.’ ‘Absolutely sir,’” Trump said.
Exxon tweeted a conversation like that never happened.
“We are aware of the President’s statement regarding a hypothetical call with our CEO…and just so we’re all clear, it never happened,” Exxon said.
Reality check: While Exxon and other U.S. oil majors historically donate more to Republicans, they are giving more to Democrats this cycle. “Exxon sent 41% of its contributions to Democratic candidates and parties, up from 32.6% in the last presidential election,” Reuters reported last week. Data compiled by OpenSecrets shows Exxon has actually donated more to Biden than Trump, $111,866 compared to $69,486.
TRUMP CAMPAIGN PROTESTS CLIMATE IN DEBATE: The Trump campaign is not eager for the president to talk about climate change in Thursday’s last debate. Campaign Manager Bill Stepien claimed in a letter to the Commission on Presidential Debates yesterday that the debate was supposed to be about foreign policy and that climate change and the other selected topics are unrelated.
The topics “are serious and worthy of discussion, but only a few of them even touch on foreign policy,” Stepien said. The Biden campaign denied the debate is supposed to be focused on foreign policy, saying the campaigns “agreed months ago that the debate moderator would choose the topics.”
Environmental groups, meanwhile, were quick to attack Stepien, accusing him of wanting to avoid Trump answering questions on his climate change record.
“Regardless of what Bill Stepien says, the climate crisis is a foreign policy issue,” said Jamal Raad, campaign director Evergreen Action. “It’s clear that Donald Trump doesn’t want to talk about his disastrous record on climate.”
LATEST IN TRUMP OFFICIALS’ SWING-STATE ENVIRONMENTAL PUSH: Trump administration officials outlined plans to reduce plastic pollution in the oceans during a stop in Florida on Monday, touting the new strategy as an example of Trump’s environmental credentials in the run-up to the election.
It’s the latest in a series of events and announcements from the Trump administration in recent weeks focused on the environment, including two executive orders just last week and an expanded offshore drilling ban last month. The White House has sought to tout its work on environmental issues other than climate change.
“Some want to ban the use of plastics altogether, just as we know in the field of energy some would like to solve global emissions concerns by banning every fossil fuel,” said Mark Menezes, the Energy Department’s deputy secretary, during the event in Florida.
“In both cases, they’re assuming we must sacrifice economic and material progress in order to be environmentally responsible,” Menezes added. “But we reject that notion and instead have chosen to embrace the power of American innovation.”
END OF AN ERA: Coal magnate Bob Murray announced Monday he would retire as chairman of American Consolidated Natural Resources, the company that purchased nearly all of Murray Energy’s assets as the coal company emerged from bankruptcy in September.
Murray, a Trump donor, has long been an ardent critic of environmental regulation. When the Trump administration came into office, he drafted an action plan for top officials at the EPA and Energy Department that called for the elimination of many major Obama-era climate and air pollution rules. Several of those regulations have since been rolled back or weakened.
Murray was replaced as Murray Energy’s CEO when the company entered bankruptcy last year.
In a statement, Murray said American Consolidated Natural Resources “is the best positioned thermal and metallurgical coal company in the world to confront the current threats to reliable, low-cost, fossil-fueled electricity.”
COAL INDUSTRY PRESSES FERC TO ACT ON GRID RESILIENCE: America’s Power, which represents coal-fired power in the U.S., is questioning why the FERC is letting a docket on electric grid resilience collect dust.
Citing portions of the order establishing the docket that said FERC would “promptly decide” whether to take actions to protect grid reliability, the coal group asks why the commission has done little more than request comment on the issue since opening the docket in 2018. America’s Power is urging FERC to set a definition for grid resilience, an effort that it expects to benefit coal-fired power plants that can provide power round-the-clock.
“California’s unfortunate experience with five days of rolling blackouts and emergency conservation measures in mid-August is a reminder of the importance of grid reliability and resilience,” wrote Michelle Bloodworth, CEO of America’s Power, in a letter Monday to the FERC commissioners.
STATE ATTORNEYS GENERAL SLAM EPA AIRCRAFT EMISSIONS LIMITS: The EPA’s proposal to reduce greenhouse gas emissions from new aircraft “wholly fails to meet the danger of climate change” because it wouldn’t reduce emissions beyond business-as-usual, wrote the attorneys general of 11 states and Washington, D.C. in comments filed Monday with the agency.
The EPA in July unveiled first-time limits on greenhouse gas emissions from aircraft, proposing to adopt international climate standards negotiated by the Obama administration. Those standards, from the International Civil Aviation Organization, use a fuel efficiency metric to encourage reductions in carbon dioxide and nitrous oxide from new aircraft engines.
The attorneys general, however, say the ICAO standards “lag existing technology by more than 10 years.” They point to EPA’s own analysis of its proposal that shows global and domestic greenhouse gas emissions from aviation would continue to increase through 2040.
“EPA has not even considered any form of emission control that would reduce GHGs,” the attorneys general wrote, arguing the EPA’s failure to do so is unlawful.
POWER GRID CEOS UNITE TO SPEED CLEAN ENERGY ADOPTION: The heads of six electricity grid operators around the world, including the CEOs of the California and Texas power grids, will work together to accelerate integrating clean energy into their electricity mixes.
The new Global Power System Transformation Consortium, unveiled Tuesday at the BloombergNEF summit, is targeting a more than 50% reduction in air pollution emissions over the next decade by more quickly adding clean energy to the electricity system, while maintaining grid reliability. The heads of power grids in Australia, the United Kingdom, Ireland, and Denmark are also leading the effort.
The Rundown
Washington Post China delivers diatribe against US climate policies
Wall Street Journal Pioneer Natural Resources is in talks to buy Parsley Energy
Bloomberg GM to plan third electric-vehicle plant in big plug-in bet
E&E News Biden climate team quietly plans transition
Calendar
WEDNESDAY | OCT. 21
2 p.m. The Global CCS Institute and U.S. Energy Association, with the support of the Department of Energy’s Office of Fossil Energy, will host two days of virtual panels exploring opportunities to deploy carbon capture projects in Texas. Register for Oct. 21 and Oct. 22.
FRIDAY | OCT. 23
11 a.m. The United States Energy Association will host a virtual press briefing to examine energy after the 2020 election.
