ExxonMobil makes U-turn on monitoring its methane emissions

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ExxonMobil has agreed to join the UN’s flagship methane emissions reporting programme as it seeks to present a more transparent image after years of resisting external monitoring of its approach to climate change.

The biggest western oil producer told the Financial Times that advances in technology meant it was now in a position to join the Oil and Gas Methane Partnership, a standardised reporting framework to monitor industry emissions of the potent greenhouse gas, led by the UN Environment Programme.

The decision represents a sharp U-turn for Exxon, which as recently as its annual meeting in May urged shareholders to vote against a resolution calling for it to join the programme, arguing that doing so would be “duplicative” and “unnecessary”.

“Now seems like the right time,” Vijay Swarup, Exxon’s director of technology, said in an interview at the company’s headquarters in Spring, Texas, just north of Houston. “What has happened over the last couple of years is the technology has evolved.”

“We wanted to make sure that we had the . . . technology road map to meet what OGMP requires you to do,” he said. “If we say something we’re going to do it — we’re not going to say something that we can’t do.”

China, the worlds biggest methane emitter, earlier this month said it would also start tracking and monitoring its methane emissions, regarded as the fastest way to help limit global warming.

The Exxon move also comes as government officials gather at COP28 in the United Arab Emirates to debate tough new rules to crack down on emissions of methane, which has more than 80 times the global warming potential of carbon dioxide over a 20-year period, according to the UNEP.

Some countries are already moving to impose penalties, including the US, where the Inflation Reduction Act will introduce a charge of $900 per tonne of methane emitted in 2024, rising to $1,500 per tonne in 2026. The US Environmental Protection Agency is set to finalise a rule forcing companies to find and plug emissions as soon as this week.

The OGMP was established in 2014 as a protocol enabling companies to systematically measure, manage and report methane emissions. It was rebooted in 2020 into a more ambitious and comprehensive reporting framework dubbed OGMP 2.0.

Most big western oil groups are members of the partnership. Exxon’s decision to join leaves Chevron as the only western supermajor outside the group.

Ben Cahill, senior fellow at the Center for Strategic and International Studies, said the UN programme was a good initiative, which had attracted more national oil companies as members in the past year.

“To show they are serious about tackling methane, big oil and gas companies need to share detailed annual data on overall emissions and emissions intensity, set interim and long-term targets, and create clear plans to cut non-emergency flaring and venting,” he said.

Several big players in the US shale patch including ConocoPhillips, Devon Energy and Pioneer Natural Resources — which Exxon agreed to buy last month for $60bn — joined the programme in 2022. Exxon insisted the Pioneer deal played no role in its decision to join the OGMP.

Exxon has sought to present a more open image since losing a boardroom battle in 2021 with activist investor Engine No. 1, which claimed its emissions policies ran counter to the Paris climate agreement.

The motion calling on the company to join the OGMP at this year’s annual meeting, proposed by the Sisters of St Francis, was defeated. But it received the backing of 36 per cent of shareholders, more than any other motion put forward by investors.

At the time, Exxon chief executive Darren Woods said that quantification technologies were “still emerging and do not currently provide consistent, repeatable results”.

He also said that in many of the countries in which Exxon operates there were “significant access and security issues”, adding that membership would involve “onerous legal obligations, including a requirement for us to indemnify the United Nations”.

Swarup said the extent of the company’s operations meant it needed to “do [its] homework” before signing up to new protocols.

“There is no company that matches our scale and that then requires a different assessment and a different level of complexity,” he said. “We want to be able to back up what we say with actual technical depth and a technical confidence that we can do that.”

As part of a new internal hub dubbed the Center for Operations and Methane Emissions Tracking, Exxon has introduced a host of technologies, including sensors and optical gas imaging cameras, to monitor its oil and gas operations for large-scale methane releases, as well as smaller leaks from equipment.