Chevron Corporation reduced its Scope 1 operated greenhouse gas emissions to an all-time low of 52 million tonnes of CO2e in 2022, following a small increase in 2021 due to increased production as economies recovered from the Covid-19 pandemic, according to Evaluate Energy data.
Aside from 2021, Scope 1 emissions have fallen every year since 2018.
In 2021, the firm announced its plan to achieve net-zero Scope 1 and Scope 2 emissions by 2050. As part of that plan, it established a marginal abatement cost curve process (MACC), which allows it to visualize the relative cost and abatement value of different projects and then prioritize the lowest cost opportunities with the greatest abatement potential.
Using the MACC process Chevron identified over 120 reduction projects for development. It plans to spend more than US$350 million on these projects in 2023 and approximately $2 billion total on similar projects through 2028.
In 2022, the firm made progress on 90 of these projects and completed 13. One of the key successes during that year involved updating a crude unit’s heat exchangers to improve waste heat utilization and reduce furnace firing, cutting CO2 emissions from the unit by approximately 20,000 tonnes annually.
Another significant reduction according to Evaluate Energy data came in upstream flaring, which was responsible for around 13 per cent of scope one emissions in 2018. Find out more about Evaluate Energy’s ESG data here.
Flaring volumes fell from 100,000 mmcf in 2021 to 60,000 mmcf in 2022, resulting in a three million tonne CO2e reduction in emissions. Historically many energy producers flare natural gas produced as a byproduct of oil production when there is no market infrastructure or demand for the associated gas. All of Chevron’s upstream onshore facilities now operate with the aim of preventing routine flaring, and the firm now considers gas-takeaway availability in its planning process, only developing wells in the Permian where there is clear offtake potential for the associated gas.
Chevron has also begun the process of switching to electric or low carbon fuel sources to power drilling, transportation, and logistics activities across its U.S. upstream operations.
Capital allocation in low carbon
Chevron is leading the way amongst the U.S. majors in its capital allocation to reducing its carbon intensity. In addition to the $2 billion in carbon reduction projects mentioned above, the firm has announced it will invest $8 billion in new low carbon technologies by 2028.
There are three key strands to the firm’s low carbon technology investments — renewable fuels, hydrogen, and CCS — and it has formed a new division called Chevron New Energies to pursue these opportunities.
By 2030 the company wants to grow renewable fuels production capacity to 100,000 bbls/d, principally in renewable diesel and sustainable aviation fuel, where it sees growing demand.
Chevron has several joint ventures underway, including a co-investment with California Bioenergy LLC in a project to produce dairy biomethane as an RNG transportation fuel in California, and another with Bunge North America, Inc., a subsidiary of Bunge Limited, to develop renewable feedstocks from canola crops.
Chevron wants to grow hydrogen production to 150,000 tonnes annually. It is working with Japanese utility JERA to develop liquid organic hydrogen carriers (LOHC) technology — a potential alternative to ammonia for transporting the fuel over longer distances.
In 2022 Chevron also invested in Canadian clean hydrogen company Aurora Hydrogen’s $10 million funding round. Aurora uses a relatively new technology called methane pyrolysis to produce hydrogen from natural gas.
Chevron has a CCUS deployment target of 25 million tonnes annually of CO2 in equity CCS storage by 2030.
Despite problems, Chevron’s flagship Gorgon project in Australia has given it a large knowledge base in CCS. Chevron was licensed to build the $54 billion gas export plant on the condition it would inject around four million tonnes (80 per cent) of the CO2 it emitted. But it injected just 1.6 million tonnes in the 2021–22 financial year due to issues with its water management system.
Chevron has insisted that the CO2 injection part of the project is working well and is looking to leverage its knowledge from Gorgon in other projects.
It recently announced plans to expand its Bayou Bend project on the U.S. Gulf coast to enable it to store one billion tonnes of CO2. The project is planned to be deployed before 2030, pending FID. It would store four–five million tonnes of CO2 annually in its first phase before increasing this to eight–10 million tonnes.
Chevron is also one of 10 industry partners that have agreed to support large-scale deployment of carbon capture and storage (CCS) to help decarbonize industrial facilities in Houston, Texas.
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