UK major BP has established a $100mn fund for projects that will deliver new greenhouse gas (GHG) emissions reductions in its upstream oil and gas operations, it said March 26. The new Upstream Carbon Fund will provide significant further support to BP’s work generating sustainable greenhouse gas emissions reductions in its operations.

This is on top of its commitment to the Oil & Gas Climate Initiative, which has a $1bn fund for similar schemes but downstream. It is also on top of the $500mn that BP invests in low carbon activities each year, including investment in venturing activities and into its alternative energy business.

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In April 2018, BP set specific targets to cut its emissions and advance the energy transition, including removing 3.5mn metric tons across the group from 2016 to 2025 and targeting a methane intensity of 0.2%.  

In the year since, BP’s total direct GHG emissions fell by 1.7mn mt CO2 equivalent (mtCO2e), despite a 3% growth in its oil and gas production. And its methane intensity for 2018 was 0.2%. The company has also introduced a link between carbon emissions reductions and bonuses.

Upstream boss Bernard Looney said: “A year ago we challenged everyone at BP to reduce emissions in our operations and they have responded overwhelmingly. This $100mn investment is designed to build on that momentum. It will fund ideas both big and small because everything counts in our transition to a lower carbon future and everyone at BP has a role to play.”

The money will be made available over the next three years to support new projects in the upstream that will generate additional GHG emission reductions. 

Sense of proportion needed - NGW comment

Most of the majors have made a commitment to reducing their carbon emissions from the well-head to the burner tip and to making their products, such as fuel and petrochemicals, in a less carbon-intense way. Some shareholder activists can claim success in driving companies to be more transparent about their activities. 

But producers may also feel there is also the need for some education in the other direction. Defending their activities, the UK shale producers' group UK Onshore Oil and Gas said March 24 that it would be better to produce energy at home, not only from the point of view of energy security and of balance of payments, employment and taxes; but also from the GHG point of view.

It said: "UK shale gas has a pre-combustion footprint half that of the imported sources we are increasingly relying on to keep Britain moving.... Globally natural gas consumption is forecast to increase as it displaces high carbon coal, while in the UK, 84% of homes rely on gas for heating that comes at one quarter the cost of their electricity."