In a recent announcement that's stirring both applause and scepticism, the Oil and Gas Climate Initiative (OGCI)—a conglomerate of some of the world's most influential oil and gas corporations—has declared a significant uptick in their low-carbon investments. The collective investment reached a staggering $24.3 billion last year, marking a 66% surge compared to the year prior. Notably, over half of this investment is funnelled into renewable energy sectors like wind and solar.
Ah, but here's the rub. This financial commitment, although substantial on the surface, is but a sliver of the astronomical profits these companies amassed last year. Critics and environmental advocates quickly point out that the industry's record-breaking profits are largely channelled into shareholder dividends and the expansion of fossil fuel endeavours rather than a full-throttle push towards greener technologies.
The OGCI is no fledgling organisation. The group was established nearly a decade ago by comprising CEOs from industry titans such as Saudi Aramco, BP, Chevron, and ExxonMobil. Their mission? To accelerate the oil and gas sector's alignment with the goals of the Paris Agreement. Investments span a range of technologies, from blue and green hydrogen to energy storage and sustainable mobility. The group also reported a threefold increase in funding for carbon capture utilisation and storage (CCUS) projects between 2021 and 2022.
Yet, the numbers tell a more nuanced story. Since 2017, OGCI's members have poured about $65 billion into low-carbon technologies. Contrast this with the estimated $190 billion in profits that just five companies—ExxonMobil, Shell, BP, Chevron, and TotalEnergies—raked in during 2022 alone. The disparity is glaring.
The stakes are escalating as the clock ticks towards a potential peak in global oil demand before the year 2030. Analysts warn that companies lagging in their transition to sustainable energy could be saddled with "stranded assets" as the world's appetite for fossil fuels wanes.
In their latest annual progress report, OGCI did share some positive news: a 17% reduction in their Scope 1 direct emissions since 2017, equivalent to taking 27 million cars off the road for a year. However, the report conspicuously needs more data on Scope 3 emissions, which account for most of the industry's climate impact. On a brighter note, the group has made strides in reducing methane emissions and routine flaring.
The pressure is mounting, not just from environmental groups but also from governments around the globe. Over 150 nations have committed to the Global Methane Pledge, aiming to cut methane emissions by 30% within this decade. OGCI has responded with an industry-wide campaign targeting near-zero methane emissions from oil and gas operations by the decade's end.
Moreover, OGCI member companies are reportedly knee-deep in developing 40 large-scale CCUS hubs worldwide. These could sequester up to 300 million tonnes of CO2 annually by 2030.
OGCI's executive committee chair, Bjorn Otto Sverdrup, claimed member firms had made "good progress" in 2022, but "we recognise that there's more to do".
"To tackle the climate challenge, we must accelerate action across our industry and other sectors," he said. "As we head into COP, we see major opportunities for collective action on methane emissions and industry-wide efforts to reduce emissions from operations. Technologies such as carbon capture will also be vital to achieve the Paris Agreement goals."
In summary, while OGCI's increased investment in low-carbon technologies is a step in the right direction, the scale of their commitment remains a point of contention. The question lingers: Is the oil and gas industry doing enough, fast enough, to mitigate its environmental impact? Only time—and perhaps more transparent reporting—will tell.