This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
  • 126 items added with 83,783 views
  • Oct 4, 2021
  • 1295 views

Everyone in the Big Oil club has announced various plans to cut emissions and invest in low-carbon energy over the past 18 months. Yet, there are stark differences between European super majors and US oil giants in the ways they are approaching the emissions problem. 

EUROPEAN COMPANIES (Equinor BP, Shell Total and ENI)

  • Have all committed to becoming Net-zero energy businesses by 2050 or sooner.
  • All of them bet on investments in renewable electricity generation—along with hydrogen, carbon capture and storage, biofuels, and electric vehicle charging networks
  • All of them aspired to be 'Energy companies'

AMERICAN COMPANIES (Exxonmobil Chevron)

  • No net-zero commitments or targets have been announced
  • U.S. supermajors Exxon and Chevron are betting on renewable fuels and CCS,
  • They are steering clear of investments in solar and wind power generation. 
  • Shareholder returns are more important for Chevron than investing in wind and solar energy
  • Returns in wind and solar are low, and US company believe they can't create value for shareholders
  • Exxonmobil & Chevron are creating a CCUS industrial hub in Houston ship channel that will significantly reduce the emissions.

WHATS NOT MENTIONED IN ARTICLE

  • US companies have significantly larger oil & gas reserves compared to EU, therefore flexibility to switch to renewables is less.
  • US has much larger oil & gas infrastructure to develop commercial CCUS hubs; not only for capturing but storage.
  • US has very large shale resources (both oil and gas) that EU does not have; especially natural gas that can help reduce emissions in Asia-Pacific region in coal-to-gas shift strategy in Asia. 

WHAT IS DIFFERENT IN THIS ENERGY TRANSITION

The main differences between this 'Mother-of-All-Energy-Transition and previous ones are; previous ones were supply focused, created value for shareholders, were asset centric with no time limit. This one is demand focused, requires stakeholder capitalism, with global emission targets that are time bound. The latter point is usually ignored by many.

BOTTOMLINE

  • All companies will choose their own transition strategy which may differ considerably in pathways and in time frame. The U.S. supermajors have not pledged any net-zero emission targets which is a concern. But they are likely to follow a different route to energy transition that may not include renewables but is expected to be heavily focused on CCUS.

 

 

 

    Tariq Siddiqui's picture
    Thank Tariq for the Post!
    Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
    More posts from this member
    Discussions
    Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
    Matt Chester's picture
    Matt Chester on Oct 4, 2021

    By mentioning the larger U.S. reserves, it sounds like the U.S. companies simply don't feel the pressure yet. I wonder if the political support differs in a way that makes it different-- are the U.S. companies subsidized and supported more than the European ones? 

    Bob Meinetz's picture
    Bob Meinetz on Oct 4, 2021

    "Have all committed to becoming Net-zero energy businesses by 2050 or sooner."

    Tariq, lacking accountability, we can safely assume climate commitments for any year beyond the next are worthless. That ExxonMobil and Chevron haven't made any is more promising as a sign of candor than any failing of environmental responsibility.

    "All of them aspired to be 'Energy companies'..."

    Since "oil" became a dirty word more than twenty years ago, all oil companies have been rebranded as "energy" companies; their mainstay products,  "energy". They've aspired to improve their public image - nothing more.

    "...there are stark differences between European super majors and US oil giants in the ways they are approaching the emissions problem."

    Perhaps the differences aren't quite as stark as they seem:

    "Here’s a mind-blower: Within 15 years Shell wants to be the world’s #1 electricity producer! And, they plan to do it by using natural gas as the fuel to create all that electricity!"

    Either: A) Shell will postpone decarbonization until 2035, then decarbonize like mad to meet its 2050 goal, or B) They never intended to become net-zero by 2050. What are the chances?

    Get Published - Build a Following

    The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

    If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                     Learn more about posting on Energy Central »