The company made the announcement on Monday, saying the effort will target both its own operations as well as the indirect emissions associated with the electricity it purchases to power well sites and other infrastructure in the basin, which spans parts of southeastern New Mexico and western Texas.
Although limited, Exxon’s announcement is significant because it is the first tangible commitment the company has made to reducing greenhouse gas emissions, compared to major European oil and gas companies that are setting themselves targets. more tangible goals, said Artem Abramov, head of shale research at Rystad Energy.
“In the past, they have been somewhat criticized for the lack of any kind of tangible engagement,” Abramov said.
The scope of Exxon’s commitment is narrow in several ways. On the one hand, the target is limited to its operations in a basin that accounts for around 12-13% of its total oil and gas production this year, Abramov said.
Exxon’s commitment does not address so-called “Scope 3” emissions, the most important category, which includes emissions produced when customers burn its oil or gas. The only way Exxon could reduce these emissions would be to reduce the amount of oil and gas produced by the company.
However, rather than reducing, Exxon production in the Permian Basin increased.
Exxon’s announcement aligns with what is required of oil and gas companies operating in New Mexico under rules adopted by state regulators earlier this year. This includes better detection of methane emissions, modernization of equipment and the elimination of routine flaring, which involves burning unwanted natural gas in the atmosphere.
Hailed by state officials as one of the toughest gas capture requirements in the country, New Mexico’s rules set a target of capturing 98% of all natural gas waste by the end of it. from 2026.
The United States Environmental Protection Agency is also on the verge of toughening federal methane regulations for industry, and the New Mexico Department of the Environment is developing its own rules for oilfield equipment that emits methane, volatile organic compounds and nitrogen oxides.
The US House Science Committee has also informed the CEOs of Exxon and nine major oil companies that they need to disclose more data on their methane emissions in the Permian Basin.
Representative Eddie Bernice Johnson, a Democrat from Texas who chairs the panel, said the companies’ current approach to monitoring methane emissions in the basin is inadequate. She said U.S. companies must do more to meet the recent pledge by the United States and more than 100 other countries to cut methane emissions by 30% by the end of the decade.
In addition to Exxon, companies that received the letter included Occidental Petroleum, ConocoPhillips, Chevron, Devon Energy and Pioneer Natural Resources.
Johnson said she was concerned that the oil industry’s leak detection and repair programs might not identify the intermittent leaks that contribute to climate pollution.
The committee set a Jan. 21 deadline for companies to provide data on methane leaks and detection efforts.
House Democrats have approved a plan to impose a fee on methane leaks from oil and gas wells, but the plan faces strong industry opposition and criticism from centrist Democrats as it goes to the Senate.
Exxon has made progress in reducing flaring in the Permian Basin. In 2018, Exxon burned 11.3% of its gas in the basin. The company reduced that figure by 0.28% in the third quarter of 2021.
Earlier this month, Exxon announced it would increase its spending on greenhouse gas emissions reduction projects to $ 15 billion over the next six years. The energy giant has come under pressure to cut climate-damaging emissions, and investors forced a renewal of the company’s board in June.
Large European oil and gas companies such as Shell and BP have diversified to invest more in solar and wind power, but “as far as Exxon Mobil is concerned, they are not necessarily so proactive when it comes to renewable energy”, Abramov said. “They invest in solar and wind power to generate electricity for their oil and gas extraction. It’s not something they see as a future contributor to their income stream.”