Chevron, Exxon Opt Out of Funding COP28 Methane-Cutting Fund

(Bloomberg) --

Six major oil companies each contributed tens of millions of dollars to a grant fund meant to help state-owned rivals cull the release of super-warming methane emissions, but Chevron Corp. and Exxon Mobil Corp. didn’t join in.

At issue is a Global Flaring and Methane Reduction Partnership that will be run by the World Bank with initially $255 million earmarked to help developing countries and their oil companies stifle leaks of that potent greenhouse gas. The program, unveiled at the COP28 climate summit in Dubai, is a recognition that while large oil companies in the US have spent years working to pare methane releases from wells, pipelines and processing equipment, many national oil companies are only getting started.

The initiative secured $25 million each from six oil companies: BP Plc, Eni SpA, Equinor ASA, Occidental Petroleum Corp., Shell Plc and TotalEnergies SE. Some countries also ponied up, with the United Arab Emirates that is hosting COP28 providing $100 million; the US, $2 million; Germany, $1.5 million; and Norway, $1 million.

Supporters of the initiative had hoped to raise a much higher sum by convincing large oil producers — after years plugging methane leaks — that unless national oil companies do the same, both the planet’s health and the industry’s reputation are imperiled, people familiar with the matter said. 

Yet some oil giants were reluctant to underwrite a fund seen as effectively providing cash donations to global competitors, one of the people said. 

Chevron supports the aims of the initiative but is currently “focused on funding methane reductions in our own portfolio as part of our $2 billion in funding of lower-carbon abatement projects,” the company said in a statement. The California-based producer also was a notable absence from a 50-member Oil and Gas Decarbonization Charter announced Saturday, with enrolled companies pledging to cut methane emissions to near zero and halt flaring of natural gas by the end of the decade. 

“We don’t take joining global initiatives like this lightly and require more clarity on the framework and path forward,” Chevron said in a statement. 

Exxon joined that pledge but so far has not provided money to the World Bank grant fund. However, it could provide technical support and methane-abatement training as part of the initiative.

“We support the goal of the Global Methane Reduction Fund and are in negotiations to provide our technical skills, scale and years of methane detection and mitigation experience to reduce emissions,” the company said in an emailed statement.

To access funding from the program, companies will need to commit to cutting methane intensity by below 0.2%, halting routine flaring of natural gas by 2030 and measuring and reporting emissions.

(Updates with Chevron statements from sixth paragraph.)

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