During its Energy Transition Spotlight, Chevron Corporation announced plans to invest more capital to multiply lower carbon energy businesses.
“Chevron intends to be a leader in advancing a lower carbon future. Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships.”Michael Wirth, Chevron’s chairman and CEO
Establishes Growth Targets for Lower Carbon Businesses
Building on its strengths, the company set the following 2030 growth targets for new energy businesses:
- Grow renewable natural gas production to 40,000 MMBtu per day to supply a network of stations serving heavy duty transport customers;
- Increase renewable fuels production capacity to 100,000 barrels per day to meet growing customer demand for renewable diesel and sustainable aviation fuel;
- Grow hydrogen production to 150,000 tonnes per year to supply industrial, power and heavy duty transport customers; and
- Increase carbon capture and offsets to 25 million tonnes per year by developing regional hubs in partnership with others.
To achieve this scale, the company expects to invest more than $10 billion between now and 2028, including $2 billion to lower the carbon intensity of Chevron’s operations. This is more than triple the company’s previous guidance of $3 billion.
“Renewable fuels, hydrogen and carbon capture target customers such as airlines, transport companies and industrial producers. These sectors of the economy are not easily electrified, and customers are seeking lower carbon fuels and other solutions to reduce carbon emissions.”
Jeff Gustavson, president of Chevron New Energies
Reaffirms Guidance for High Return Traditional Business While Targeting Reduction of Carbon Businesses
At a Brent oil price average of $60 per barrel, the company reaffirmed its expectation to earn double-digit return on capital employed by 2025 and generate $25 billion of cash flow, above its dividend and capital spending, over the next five years. The company also reaffirmed its 2028 upstream production greenhouse gas intensity targets, which equate to an expected 35% reduction from 2016 levels.
“With the anticipated strong cash generation of our base business, we expect to grow our dividend, buy back shares and invest in lower carbon businesses. We believe a strategy that combines a high return, lower carbon traditional business with faster growing, profitable new energy ones positions us to deliver long-term value to our shareholders.”Michael Wirth, Chevron’s chairman and CEO
Exploring Carbon Storage Business Opportunities
Chevron New Energies division, and a subsidiary of Enterprise Products Partners L.P. announced a framework to study and evaluate opportunities for carbon dioxide (CO2) capture, utilization, and storage (CCUS) from their respective business operations in the U.S. Midcontinent and Gulf Coast. The companies expect the initial phase of the study in which they will evaluate specific business opportunities to last about six months.
“This joint effort has the potential to advance our ongoing work to grow our lower carbon businesses with commercial scale using the industry expertise both companies bring to the project. International climate change scientists working with the United Nations have identified carbon capture as a critical technology needed to help the global energy system transition to a lower carbon future.”Jeff Gustavson, president of Chevron New Energies
The companies have successfully worked together on prior business opportunities and believe they bring complementary capabilities to successfully pursue CCUS. Projects resulting from the evaluation would seek to combine Enterprise’s extensive midstream pipeline and storage network with Chevron’s sub-surface expertise to create opportunities to capture, aggregate, transport and sequester carbon dioxide in support of the evolving energy landscape.