• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days Does Toyota Know Something That We Don’t?
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 9 hours America should go after China but it should be done in a wise way.
  • 6 days China is using Chinese Names of Cities on their Border with Russia.
  • 7 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 7 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 7 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 6 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 7 days Putin and Xi Bet on the Global South
  • 7 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 8 days United States LNG Exports Reach Third Place
  • 8 days Biden's $2 trillion Plan for Insfrastructure and Jobs
The Race for Natural Hydrogen Is Heating Up

The Race for Natural Hydrogen Is Heating Up

Natural hydrogen presents a promising…

China’s EV Growth Set To Explode in 2024

China’s EV Growth Set To Explode in 2024

China leads the global electric…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Carbon Pricing Won't Kill Big Oil

Investors in Big Oil are becoming more and more vocal about the negative effects of the industry on the planet. No longer is it just about profits. Investors are demanding that some of the biggest companies in the oil industry reduce emissions to help mitigate climate change. As a result, Big Oil has succumbed to the pressure and is beginning to release climate scenarios and set indicative emission-cutting targets.

Some of the biggest oil and gas companies—including European majors BP, Shell, and Total, and even U.S. supermajor ExxonMobil—favor carbon pricing in America, as a group of major companies, also from outside the oil industry, said last year.

Exxon has recently pledged US$1 million to back the campaign for introducing a carbon tax in the United States, but is it enough?

Exxon and other oil companies’ support last year to put a price on carbon in the United States was met with skepticism by Greenpeace, which said that, “A nicely worded public relations exercise is no cure for decades of deception.”

In Europe, Norway’s Equinor—which rebranded from Statoil earlier this year to drop the reference to ‘oil’ aiming to be a ‘broader energy company’—has been working (and profiting) for decades under some kind of carbon pricing at home. Norway has a climate policy designed to reduce greenhouse gas emissions by 30 percent by 2020 compared to 1990 levels. More than 80 percent of domestic emissions is subject to mandatory emissions trading, a CO2 tax, or both, Norway’s Ministry of Climate and Environment says.

Equinor has been working under such regulations and “Regulations have been conducive to solutions,” Eirik Waerness, chief economist at Equinor, told Forbes’ Christopher Helman in an interview published last week.

“The advantage is that we’ve been exposed to framework conditions that have put a price on carbon since 1991,” Waerness said.

When Norway started to develop its vast oil resources, it had a complete ban on flaring natural gas. Until the huge natural gas pipeline network from offshore to mainland Norway and to northwest Europe was built, Equinor used the natural gas to inject in reservoirs to keep the pressure, the company’s chief economist told Forbes.

To compare, drillers in the Permian, for example, are estimated to be flaring US$1 million worth of natural gas every day. Related: IEA: Expensive Energy Is Threatening Economic Growth

Yet, not even Norway’s Equinor is giving up on oil and gas development—it will continue to produce oil and gas.

“If we don’t do it, somebody else will do it elsewhere,” possibly with less commitment to preserve the environment as much as possible, Waerness told Forbes.

Equinor cut its so-called CO2 intensity from oil and gas production by 10 percent annually in 2017, from 10kg CO2 per boe to 9kg CO2 per boe. It vows an additional reduction of the carbon intensity of its upstream oil and gas portfolio to 8 kg CO2/boe by 2030 and annual CO2 emission reductions of 3 million tons by 2030. Equinor will also invest up to 15-20 percent of its capital expenditure in new energy by 2030. It’s a large percentage, but this leaves a much larger percentage of capex to be invested in oil and gas.

Another European major, Shell, is not ‘going soft’ on oil and gas, despite recent investments in cleaner energy and energy solutions—Shell’s core business is and will continue to be oil and gas for the foreseeable future, its chief executive Ben van Beurden said last week.

Shell aims to bring down the net carbon footprint of its energy products by around half by 2050, and last month it announced a target to maintain methane emissions intensity below 0.2 percent by 2025 for all oil and gas assets for which Shell is the operator.

BP, for its part, says that it believes “that carbon pricing provides the right incentives for everyone – energy producers and consumers alike – to play their part in reducing emissions.” Related: Goldman Sachs: This Is The Next Big Risk For Oil

The UK supermajor expects two thirds of BP’s direct emissions to be in countries subject to emissions and carbon policies by 2020, and evaluates plans for new large projects assuming a carbon cost.

These big oil players are vowing to reduce carbon emissions and make accommodations to prepare for an energy transition, but they are all their basing doomsday scenarios and alternative scenarios using different approaches, making it difficult to compare their projections, according to non-profit think tank Carbon Tracker.


According to Equinor’s Waerness, the “Industry needs help in setting framework conditions.”

“The pendulum moves back and forth, but the overall trend of pricing carbon is a relatively heavy one. It would be a mistake to assume it’s not going to happen,” he told Forbes.

Carbon pricing may be coming, but the world may be a little late in its efforts to significantly cut emissions—the world needs to spend US$2.4 trillion every year until 2035 to slow down the effects of climate change, the UN said in a report last week.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Tom Blazek on October 15 2018 said:
    I'll believe the Oil Industry is interested in reducing carbon emissions when they stop opposing low carbon, clean octane sources like ethanol. Currently the oil industry and API are vowing to challenge Year-Round Sales of E-15, "with all available legal means."

    E-15 is a LOWER Carbon fuel than E-10. E-15 is a cleaner fuel than E-10 with LOWER Emissions. E-15 has a LOWER Vapor Pressure than E-10 so there is LESS Evaporation Potential with E-15. E-15 is also a Consumer CHOICE Fuel, not a mandate. So, will the Oil Industry and API come clean on Ethanol, and actually support and sell lower Carbon Fuels by using it?

    I doubt it, they are not Progressive enough to Seize The Day.

    Leadership Change is needed at Big Oil and the API if we want a cleaner future.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News