US supermajor Chevron made a splash in the renewables pond during its investor day in March, when it outlined its plan to increase returns from and lower the carbon intensity of its operations.

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Sceptics questioned Chevron’s sincerity. It is a response that should be expected by one of the world’s largest oil and gas corporations, especially one accustomed to making its own way in the world of Big Oil.

While its European counterparts were the first off the line in the race to embrace renewables, Chevron took a different approach to the climate question.

“How do you start to lower carbon for the world? Because the real issue is lowering carbon intensity, not just shifting it off our balance sheet or offsetting it with a credit,” says Jay Johnson, the company's executive vice president of upstream.

“In our view, oil and natural gas are going to be critically needed for some time to come. The energy transition under way will take some time, to not only develop the new energy sources, but also to figure out the technical challenges that we all face.”

Chevron's approach for measuring the emissions performance of its upstream assets is to look at greenhouse gas intensity by commodity on an equity basis — the same method it uses to report production, according to the company.

"Just as we count all of our barrels for earnings, we count all of our barrels for carbon," says Johnson.

Chevron says it exceeded its 2023 upstream carbon intensity reduction targets three years ahead of schedule.

It now targets a 35% reduction in its carbon intensity by 2028 and said it will eliminate routine flaring by 2030.

“The US Gulf of Mexico, for us, has some of the lowest carbon-intensity production in the world — for anybody. In 2020, the carbon intensity for our production in the Gulf of Mexico was about seven kilograms of CO2 per barrel,” he says.

“Our overall average is around 28 kilograms, is less than half of the global average, which the best we can tell is in the high 50s, low 60s. At seven kilograms, our Gulf production is some of the best production that we can get from a carbon-intensity standpoint.”

As federal officials review policies and procedures surrounding leasing and permitting of wells on federal lands, the fate of future US Gulf wells is unknown.

Johnson believes the offshore oil and gas industry needs to work together to bring the information and data to the decision-makers.

“Helping the policymakers understand what are the lowest suppliers of energy from a carbon-intensity standpoint is an important part of understanding what's the best policy for the US and others around the world as we all work to lower the carbon intensity,” he says.

“Our focus should be on reducing emissions, not reducing energy supplies.”