By Jennifer Hiller and Ron Bousso
NEW YORK/LONDON, March 5 (Reuters) - Exxon and Chevron
boasted to investors this week about booming U.S. oil
production, illustrating how the gap has widened - at least in
words - between top American oil and gas companies and their
European rivals over efforts to transition to clean energy and
fight climate change.
World crude oil and natural gas production is running at an
all-time high, bolstered by big increases in recent years in the
United States, Brazil and other nations. At the same time, a
growing climate movement is pressuring governments and
corporations to lower emissions as the world warms.
U.S.-based Exxon Mobil and Chevron this week focused their
investor outlooks on sharp growth in oil and gas output, a stark
contrast from their European rivals including BP and Italy's Eni
which last month unveiled plans to trim their traditional
business and reduce greenhouse gas emissions.
But as of yet, no European major invests above 10% of its
total spending on renewable energy. All the world's oil majors
still plan investments in new fossil fuel production,
underpinned by forecasts for years of rising demand for oil and
gas.
“These companies all have very similar business models,”
said Ben Ratner of the Environmental Defense Fund. “The
differences we’re seeing now are largely about what they’re
saying.”
The industry faces mounting pressure from investors and
climate activists to meet the 2015 Paris climate goal of
limiting global warming to below 2 degrees Celsius from
pre-industrial levels.
Publicly, the European companies have been more vocal about
their plans to cut carbon emissions. BP, Eni, Royal Dutch Shell,
Norway's Equinor and Spain's Repsol have all agreed to reshape
themselves by increasing spending on renewable energy and
setting varying ambitions to reduce carbon
emissions.
"We have got to change and change profoundly because the
world is changing fast and so are society's expectations from
us," BP Chief Executive Bernard Looney said in his a speech on
Feb. 12, one week after taking office, where he presented a
vision to "re-invent" BP by slashing carbon emissions and
lowering oil and gas output by 2050.
Italy's Eni last week pledged to reduce its oil production
from 2025 and slash its greenhouse gas emissions by 80% and in
one of the sector's most ambitious clean-up drives.
But Exxon CEO Darren Woods, when asked about setting targets
for carbon emissions on Thursday, said the company was focused
on reducing emissions and would not engage in a "beauty match"
with its peers over how its investments appear when looking at a
broader societal problem.
Chevron CEO Mike Wirth appeared to question the Europeans'
strategy. "Whether or not there's a pathway to some of these
long-term aspirations remains a question," Wirth said this week.
Wirth returned to those remarks at an annual investor
conference on Tuesday in New York, noting that while European
companies have greater long-term aspirations, Chevron has
released a set of shorter term emissions targets that "are very
tangible here and now."
Before 2025, Eni's oil and gas output is also set to rise by
3.5% per year. And BP vowed to stick to its financial plans in
the short term.
Chevron and No. 1 oil company Exxon this week laid out plans
to sharply grow output in shale oil basins and around the world.
Chevron vowed to return to shareholders $80 billion by 2025.
Exxon plans on increasing spending this year to $33 billion,
sticking to plans to "lean in" on capital expenditures.
"The fact remains that Exxon still provides investors no
assurance that it has a strategy consistent with the goals of
the Paris Agreement and continues to lag behind its peers," said
Edward Mason, head of responsible investment for the Church
Commissioners for England, who co-leads climate talks with
Exxon.
Chevron is not pursuing renewables as a standalone business,
but sees investments in wind and solar that can provide power to
its oil field operations. It set short-term climate targets,
saying it would drop greenhouse gas and emissions intensity by
2023.
FACTBOX-Big Oil's climate targets vary widely
(Reporting by Ron Bousso in London and Jennifer Hiller in New
York; Editing by David Gaffen and David Gregorio)
BP (BP.)
