Chevron triples low-carbon investment, pledges $10 bln through 2028
U.S. oil producer Chevron Corp on Tuesday pledged to triple to $10 billion its investments in low-carbon fuel and projects through 2028. Oil producers globally, under mounting pressure to join the fight against climate change, have stepped up plans to transition to less carbon-intensive production. Shareholders and governments are insisting they plot a path to sharply cut greenhouse gas emissions by 2050. Chevron said half of its spending will go to curb emissions from fossil fuel projects, with $3 billion for carbon capture and offsets, $2 billion for greenhouse gas reductions, $3 billion for renewable fuels and $2 billion for hydrogen energy. It reaffirmed a goal of paring greenhouse gas intensity by 35 per cent through 2028, compared to 2016 levels from its oil and gas output. However, it did not commit to 2050 net-zero emission reduction targets as some rivals have. European oil producers have ambitious plans to shift away from fossil fuels with large investments in renewables and mid-century net-zero emission targets. Chevron, Exxon Mobil Corp and Occidental Petroleum sought to reduce carbon emissions per unit of output while backing carbon capture and storage. “We are trying not to be in a position in which we lay out ambitions that we don’t believe are realistic and deliverable,” Chief Executive Michael Wirth told investors on Tuesday. BP Plc has said it will invest $3-4 billion a year in low-carbon projects by 2025 and shrink oil and gas production by 40 per cent in the next decade. Royal Dutch Shell Plc in February set annual investments of $2-3 billion in clean energy. Chevron said it would expand renewable natural gas production to 40 billion British thermal units (BTUs) per day and increase renewable fuels production capacity to 100,000 barrels a day to meet customer demand for renewable diesel and sustainable aviation fuel. “We expect to grow our dividend, buy back shares and invest in lower-carbon businesses,” Wirth said. Chevron, the second-largest U.S. oil producer, aims to increase hydrogen production to 150,000 tonnes a year to supply industrial, power and heavy duty transport customers and raise carbon capture and offsets to 25 million tonnes a year by co-developing regional hubs. Environmentalists said Chevron’s focus is on offsetting emissions from oil and gas output, not reducing oil output. “Chevron’s new announcement does not represent a particularly large strategic shift,” said Axel Dalman, an associate analyst with climate change researcher Carbon Tracker. “The main item is that they plan to spend more on ‘lower-carbon’ business lines.” This year, Chevron announced creation of a new unit to manage low-carbon investments, with an initial focus on alternative energy sources such as hydrogen and technologies including carbon capture. Chevron on Tuesday reaffirmed its expectation to generate $25 billion in cash flow, above its dividend and capital spending, over the next five years.
Covid shrank CNG sales in Gujarat by 13 per cent in FY21
The compressed natural gas (CNG) sales in Gujarat contracted by 13per cent in 2020-21 as its consumption reduced due to the restricted vehicular movement following the imposition of curbs to tackle Covid. The provisional sales of CNG in the state declined to 6.49 lakh metric tonnes in April-March 2021 as compared to 7.45 lakh metric tonnes in April-March 2020. This is revealed in the data compiled by the petroleum planning and analysis cell (PPAC) of the Union ministry of petroleum and natural gas. City gas distribution (CGD) players attributed the reduction in CNG sales to the Covid-induced restrictions, especially the nation-wide lockdown imposed in the first quarter of the fiscal 2021. “The sales of CNG had taken a major hit during the April-June quarter of the last financial year, which impacted the overall sales in the entire year,” said a source in a city-based CGD company. In fact, CNG sales were down 32per cent in the first two quarters of 2020-21. The CNG sales in the state are primarily driven by autorickshaws, school vans, public transport, and cabs, including those operated by aggregators. While schools remained closed throughout the year, rickshaw movements were curtailed due to the lockdown and territorial restrictions to contain the subsequent waves of the pandemic, said industry players. The CNG sales, however, have improved because of the easing of restrictions after the second wave of Covid and vehicular movement getting back to almost normal. According to Crisil Ratings, sales volume of city gas is set to soar 25-27per cent in 2021-22. This includes CNG used by vehicles and piped natural gas (PNG) used by homes and industries. “The first quarter of this fiscal, unlike last year, saw far less impact of lockdowns on vehicular mobility and industrial activities as volumes were up 130per cent on-year though down 18per cent sequentially,” said Manish Gupta, senior director, Crisil Ratings. “We expect sustained recovery for the rest of the year, as both CNG and industrial PNG demand improve on a combination of higher economic activity and record price advantage against alternate fuels,” he added. “This will drive the overall demand by 25-27per cent this fiscal, even 8per cent above fiscal 2020 levels.”
50 city gas distribution areas to be put under common carriers list
The Petroleum and Natural Gas Regulatory Board (PNGRB) is seeking to declare more than 50 city gas distribution licensed areas, including Delhi, Mumbai and large parts of Gujarat, as common carriers. All the city gas areas identified for the purpose have already exceeded their exclusivity period. For cities like Delhi and Mumbai, the exclusivity period expired in 2012, while for many others it ended in the years up to 2021. The downstream regulator’s move is likely to affect city gas distributors like Indraprastha Gas in Delhi, Mahanagar Gas in Mumbai and Gujarat Gas in several cities. Other distributors that will be affected by this include Gail Gas, Indian Oil-Adani Gas, Bhagyanagar Gas, Maharashtra Gas, Sabarmati Gas, Central UP Gas, Megha Engineering and Infra, Tripura Natural Gas Company, and Rajasthan State Gas. In notices published on its website, the regulator has sought comments from stakeholders on the proposed move, which falls under Section 20 of the PNGRB Act. The notices carry details of the number of piped gas connections, length of pipeline, and CNG compression capacity in each city gas area. After the regulator declares a city gas area as a common carrier, the original licensee has to permit about 20% or more of its network capacity for use by other suppliers. Increased competition among suppliers may help cut gas bills for consumers while squeezing profits of the original distributor. Declaring city gas areas as common carrier, however, has not been easy for the regulator with licensees fiercely contesting past attempts in court. Indraprastha Gas has previously fought PNGRB in court over the exclusivity period. City gas areas that the PNGRB has identified for common carrier include Bareilly, Kanpur, Dewas, Kota, Pune, Mathura, Kakinada, Sonipat, Meerut, Vijayawada, Thane, Indore, Firozabad, Hyderabad, Agra, Gandhinagar, Gwalior, Agartala, Anand, Surat, Ahmedabad, Hazira, Moradabad, Chandigarh, Allahabad, Jhansi, Bengaluru, Panipat, Daman, Haridwar, and Belgaum.