Exxon Mobil Corp. has joined with seven other big energy companies to reduce pollution from natural gas production, an effort by the industry to present itself as part of the solution as governments and consumers demand more environmentally friendly energy.
Big oil companies like Exxon and Royal Dutch Shell PLC have increasingly touted natural gas as a core tool to combat climate change, since it is produces fewer greenhouse gas emissions than the fuel it often replaces in electricity production, coal.
Continue Reading Below
The rare trans-Atlantic alignment was first reported by The Wall Street Journal, ahead of the companies' announcement Wednesday. The collaboration by companies including Exxon, Shell, BP PLC and Total SA, shows the oil and gas sector is proactively trying to address burgeoning concerns about natural gas emissions to ensure that its big bet on the fossil fuel pays off.
Major energy companies have made big investments in gas in recent years and are steadily growing their production volumes. They argue that it will prove a vital source of energy stability even as renewables increase their market share, since gas can be burned when the sun isn't shining or the wind isn't blowing.
But methane, the main component in natural gas, is also a potent greenhouse gas and the issue of fugitive emissions that occur when it leaks into the atmosphere is starting to draw negative attention.
Exxon and its partners said Wednesday that they have signed up to a set of guiding principles, committing to drive down methane emissions from their assets, encourage better performance from their peers, improve transparency and data accuracy on the matter and advocate for better regulation.
"The commitment was made as part of wider efforts by the global energy industry to ensure that natural gas continues to play a critical role in helping meet future energy," the companies said in a joint statement. "Its role in the transition to a low-carbon future will be influenced by the extent to which methane emissions are reduced."
A recent International Energy Agency study found around 76 million tons of methane are emitted every year from global oil and gas operations. That is the equivalent to more than Australia's entire natural gas production, the IEA's executive director, Fatih Birol told an industry gathering last month.
The companies set of principles was developed in collaboration with the IEA, the United Nations and other international organizations focused on energy and climate change.
Exxon's decision to join the group leaves Chevron Corp. as the only major U.S. oil company that has yet to join the initiative. Both the U.S. oil companies have lagged behind their European peers on the issue of climate and Exxon hasn't participated in previous similar efforts to build an industry voice on such subjects.
Over the years, activists have pointed to the lack of participation by Exxon and Chevron in the group climate effort as evidence of a divide between the biggest U.S. and European oil companies on the issue.
Still, under pressure from investors over the past year, they have both undergone an evolution in the way they address climate change publicly. Chevron has provided more information about how it is looking at climate risks and made strides in its own methane reduction efforts. "It is in Chevron's business interest to minimize fugitive methane and to maximize the volume of natural gas that we can commercialize," the company said in an emailed statement.
Exxon Chief Executive Darren Woods has urged President Donald Trump not to withdraw from the Paris climate accord. The company has also initiated research efforts to test the viability of capturing emissions from natural gas power plant operations, as well as continued to study ways to convert algae into fuel.
Write to Sarah Kent at email@example.com and Bradley Olson at Bradley.Olson@wsj.com
(END) Dow Jones Newswires
November 22, 2017 15:55 ET (20:55 GMT)