Shell says 2022 emissions down, wary of scope 3 calls
Shell said today that greenhouse gas (GHG) emissions resulting from its own operations — scope 1 and 2 emissions — decreased by 15pc year on year to 58mn t of CO2 equivalent (CO2e) in 2022. It said that calls to set targets to reduce scope 3 emissions, made through use of its production, would mean cutting its oil products and gas sales, and shareholders' returns.
Shell said it reduced its scope 1 and 2 emissions — what it calls its absolute emissions — by 30pc in 2022 compared with 2016, which is its base year. It has a goal to reduce its absolute emissions by 50pc by 2030, compared with 2016, and plans to be a net zero emissions company by 2050.
The firm's direct emissions — scope 1 — fell to 51mn t CO2e in 2022, from 60mn t CO2e in 2021 and 72mn t CO2e in 2016. Shell said cuts in absolute emissions were a result of divestments, including the sale of the 340,000 b/d Deer Park and 145,000 b/d Puget refineries in the US, the loss of its in OML 11 licence in Nigeria, and the shutdown or conversion of existing assets. It cited the shutdown of some units in Singapore, where it is rebranding its Pulau Bukom manufacturing site as an energy and chemicals park offering renewable products.
It said abatement projects and the purchase of electricity played a role in reducing emissions, but that the commissioning of its polymer facility in Monaca, US, partly offset the decreases. The firm said it did not use carbon credits to achieve scope 1 and 2 reductions in 2022.
Shell reported progress on methane emissions, which it includes in its scope 1 and 2 reporting. It reduced methane emissions from its operations by 27pc on the year to 40,000t, resulting in a slightly lower methane emission intensity, at 0.05pc compared with 0.06pc in 2021. It has a target to keep its methane emissions intensity for operated oil and gas assets — including LNG — below 0.2pc by 2025. Routine hydrocarbons flaring was reduced to 0.1mn t, from 0.2mn t in 2021, with around 50pc of flaring in its upstream and integrated gas facilities occurring in assets owned by the firm in Nigeria, Shell said.
Scope 3 commitment
Shell's emissions target covers scope 1 emissions, resulting from Shell's operations, and scope 2, coming from the energy needed to run its operations, but does not include scope 3 emissions generated through the consumption of the firm's production. They accounted for 95pc of the company's total in 2022. Shell's scope 3 emissions decreased by 10pc on the year to 1.174bn t CO2e, and by 24pc compared with 2016. The year on year decrease is largely the result of a reduction in oil product and gas sales, and a decrease in the intensity of power sold, Shell said.
Shareholder activist group Follow This is urging other shareholders at Shell, BP, ExxonMobil and Chevron to align their 2030 emissions reduction targets with the Paris climate agreement, which calls for global warming to stay "well below" a 2°C rise in pre-industrial temperatures and ideally limit it to a 1.5°C rise.
"The focus on Scope 3 by 2030 leaves the oil majors no wiggle room for smokescreens about ‘net zero emissions by 2050' or reduction targets for operational emissions — scope 1 and 2, around 5pc of emissions," Follow This said.
But Shell warned against calls to introduce medium-term targets to reduce absolute scope 3 emissions, ahead of its annual general meeting (AGM) on 24 May. It said it would have to cut its sales of oil products and gas to reduce its scope 3 emissions in line with the Follow This resolution.
"Doing so, without changing demand and the way our customers use energy, would effectively mean handing over customers to competitors, "the firm said, adding it would affect Shell's financial strength "materially" and "limits its ability to generate value for shareholders."
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New York picks WCI for carbon market platform
New York picks WCI for carbon market platform
New York, 26 September (Argus) — New York state will use the Western Climate Initiative (WCI) platform when administering its economy-wide carbon market, the latest sign that regulators in the state are looking to align program elements with systems in other North American carbon markets. Regulators from Quebec and New York announced the agreement on Wednesday at the International Emissions Trading Association's North American Climate Summit, an event on the sidelines of the UN General Assembly and Climate Week NYC. After a competitive process to select a platform for its market, New York state reached a deal this week to lean on the WCI for its "market registry platform, the auction platform, and financial services", New York State Department of Environmental Conservation deputy commissioner Jon Binder said. The WCI nonprofit provides the market infrastructure for California and Quebec's linked carbon market, as well as for a similar program in Washington state where regulators are weighing a potential linkage with the other two. Any eventual linkage with New York's program, which could see compliance obligations start in 2026, would be made easier by all the jurisdictions utilizing the same system for administering their respective programs. The decision does not "necessarily mean these programs are linking," but New York is "happy to keep those conversations going in that regard," Binder said. Nova Scotia, which wound down its cap-and-trade program last year, used the WCI platform for auctions without linking its programs with any other jurisdictions. "It doesn't mean that New York will link with us," said Jean-Yves Benoit, chair of the WCI board and the director general of carbon regulation and emissions data at Quebec's environment ministry. "Although I would be very happy if we issue a joint press release next year saying that." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec+, Saudis have no target oil price: sources
Opec+, Saudis have no target oil price: sources
Dubai, 26 September (Argus) — Neither Saudi Arabia nor the wider Opec+ group have any specific target for oil prices, and no member of the producers' alliance is about to abandon output discipline in favour of chasing market share, multiple Opec+ sources have told Argus . Oil prices fell earlier on Thursday following unconfirmed press reports that Saudi Arabia may be willing to tolerate lower oil prices as part of a plan to increase crude output to regain market share. Sources within Opec+ have since dismissed those assertions outright, insisting that the basis for the group's collective decision-making will always be market fundamentals, and in particular the five-year average of crude inventories, rather than targeting any particular oil price. "Neither Opec+, Opec nor the Saudis have any price target, let alone $100/bl," one source said, in response to a Financial Times report that stated Saudi Arabia is ready to "abandon its unofficial price target of $100/bl". A second source said the $100/bl figure being reported is not a target but is more likely to refer to a recent estimate issued by banks and other financial institutions of Saudi Arabia's "so-called break-even oil price" — that is, the price the kingdom needs to cover its spending plans. In April, the IMF estimated Saudi Arabia's breakeven oil price at $96.20 for 2024, almost 20pc above the previous year and around a third higher than current Ice Brent futures. "The breakeven is, at best, indicative, but does not tell the full story," the source said. Focusing on it "is totally devoid of the idea that a government has a host of other tools to manage an economy — issuing bonds, borrowing, adjusting one's budget". Eight Opec+ producers, led by Saudi Arabia and Russia, were due to begin a phased return of around 2.2mn b/d of "voluntary" output cuts from the start of next month. But mounting concerns over the strength of the global economy, and in turn oil demand, prompted the group to defer the plan by two months to December. With worries around oil demand not going away, and the market looking likely to flip into a surplus from the start of next year, some observers are questioning whether there will be any need for an increase in Opec+ supply from December. And if the eight members go ahead with unwinding the cuts regardless, whether that would signal a shift in the group's focus to chasing market share. But a third source rejected that view, as the group would "only be reversing what we have cut". "As a group, we have said time and time again that these cuts were both voluntary and temporary, and always stressed that they could be paused or reversed," the source said. "And earlier this month, that's exactly what we did with the two-month deferral to December." December or bust? The rationale to delay the increase in production to December was twofold, according to Opec+ sources. It not only reflected the uncertainty around the global economy, the US and Chinese economies, interest rates and demand. But more importantly, the decision was made to allow Opec+ members that have overproduced this year ꟷ namely Iraq, Kazakhstan and Russia ꟷ more time to show they are serious about compensating for exceeding their output targets. "There is so much uncertainty today which we, as Opec+, have no control over," one of the sources said. "But what we do control is our own affairs." Iraq and Kazakhstan have been under intense pressure in recent months to not only adhere to their pledged targets, but also compensate for past overproduction. While Kazakhstan did manage to produce below its target in August, Iraq continued to struggle. All eyes will be on how these countries do in September. "The overproduction is impacting our credibility, and we need to tackle that. Discipline is paramount," the source said. Reports that Saudi Arabia is committed to start unwinding cuts from December, come what may, are wide of the mark for several reasons, another source said. "First, this is not a decision for Saudi Arabia to make. It is for all eight to decide," he said. The group also still has several weeks before it has to decide whether to proceed with the plan, or defer again, the source added. A decision is due in the first week of November, by which time the group should have better visibility on market fundamentals and Iraqi and Kazakh compensation efforts. "How could we make a decision now when we don't even have September production figures?" the source said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hurricane Helene shuts in 29pc of US Gulf oil
Hurricane Helene shuts in 29pc of US Gulf oil
New York, 25 September (Argus) — Hurricane Helene, which is forecast to intensify as it heads for a late Thursday landfall in Florida, has shut in about 29pc of US Gulf of Mexico oil output. Around 511,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 313mn cf/d of natural gas production, or 17pc of the region's output, was also off line. Operators have so far evacuated workers from 17 offshore platforms. Helene was last about 110 miles north-northeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 80 mph. Helene is expected to be a major hurricane, with winds of at least 111mph, when it reaches the eastern Florida coast on Thursday evening. "A turn toward the north and north-northeast with an increase in forward speed is expected later today through Thursday, bringing the center of Helene across the eastern Gulf of Mexico and to the Florida Big Bend coast by Thursday evening," the center said. Shell restarting some production Although the hurricane will largely pass to the east of most offshore oil and gas production areas, companies have taken precautionary measures. Given a shift in the forecast track, Shell said late Tuesday that it had started to ramp up production at the Appomattox platform to normal levels, and was in the process of restoring output at the Stones facility, both off the coast of Louisiana. It paused some drilling operations. Chevron said earlier it was shutting in production at company-operated facilities in the Gulf of Mexico, and evacuating all workers. Equinor said it was shutting down the Titan oil platform. BP had earlier this week started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. US offshore production was disrupted earlier this month when Hurricane Francine made landfall, with up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG glut coming and may catch many by surprise: Orsted
LNG glut coming and may catch many by surprise: Orsted
London, 25 September (Argus) — There will be an oversupply of LNG on the global market in the coming years, which may contribute further to "the decade of turmoil", Danish utility Orsted senior vice-president Rune Sonne Bundgaard-Jorgensen told Argus . "The [energy] crisis is absolutely not over. To me, an energy crisis is one of uncertainty and volatility," Bundgaard-Jorgensen said on the sidelines of the Energy Trading Week conference in London. "We are going to see an LNG glut which we all in this [conference] room see is coming but the rest of the world does not necessarily. That is going to catch a lot of people by surprise," he said, adding that "surprises are never good when it comes to energy". According to Bundgaard-Jorgensen, "we are going to see an ongoing decade of turmoil. Who knows where the war in the Middle East with the latest attacks on Hezbollah and Israel is going to take us," he said. Among other concerns, he mentioned "uncertainties in the Far East, around the South China Sea". "So, though the current energy crisis of decoupling from Russian pipe gas is over, the continued crisis of where we are going to get sustainable, long-term energy from is far from over," Bundgaard-Jorgensen said. Commenting on Orsted's long-term gas plans, Bundgaard-Jorgensen stressed that Orsted is "constantly evaluating" its gas portfolio. He refused to say whether Orsted is negotiating another long-term deal with Norwegian state-controlled Equinor after their previous contract expired in April. Orsted entered an agreement with Equinor at the end of 2022, after Russian state-controlled Gazprom halted deliveries to the firm from June 2022 following Orsted's refusal to pay for its supply in roubles . "We are quite happy that we are out of our long-term contract with Gazprom," Bundgaard-Jorgensen said. "As a company we believe in decarbonisation — but I also need to believe in a resilient portfolio. So, we are constantly looking to optimise. Gas is not a strategic core of Orsted but it is a very important tool of securing our portfolio," he said. Bundgaard-Jorgensen refused to comment on whether the firm is planning to appeal a decision made by the Danish Supply Authority in July that the tariff levied by Orsted on the Tyra-Nybro pipeline to Denmark from 2011 to October 2012 was too high. The authority reduced the tariff in the period by almost 30pc to 7.20 Danish kroner/m³ from DKr10/m³. By Alexandra Vladimirova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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