Signatories to the Paris Agreement are expected to significantly reduce greenhouse gas emissions so that global temperatures can be kept below two degrees celsius by 2040 through to 2050. But the latest forecast of the International Energy Agency (IEA) notes that the world will still need more than 60 million barrels of oil per day by 2040.
It therefore means that working to uphold the ideals of the Paris Agreement as well as preparing to adequately respond to the world’s global supply needs will create a crucial challenge for companies like Hess Corporation, a 30 percent stakeholder in Guyana’s Stabroek Block.
During his most recent participation in a fireside chat at the J.P. Morgan 2020 Energy, Power and Renewables Conference, Hess Corporation’s Chief Executive Officer, John Hess acknowledged this very predicament while noting that climate change is probably the greatest scientific challenge of the 21st century. The CEO was quick to note however that addressing the dual challenge presented by climate change requires not just climate literacy but also, energy literacy.
Hess was keen to note that in Europe for example, there is a lot of political pressure on companies to pursue a lower carbon footprint. The CEO said he agrees with this but would still note that oil is just as important, as such, a healthy energy mix will be needed going forward. Hess stressed as well that there would be a great need for technological advancements to reduce companies’ carbon footprint while simultaneously growing their oil and gas portfolio.
“…That is why I am saying it is about getting the balance between climate literacy and energy literacy backed by solid policies so that you can have sustainable development,” the CEO said.
Hess was also keen to note that his company is very focused on safety, protecting the environment, and having a positive impact on the communities it does business with. All of this he said is in keeping with the company’s mission to be the most trusted energy partner in the world. On this premise, he highlighted that Hess is perhaps the only company among its peers to have set greenhouse gas emission targets and flaring intensity targets. “…And we will be upping those targets for the next five years.”
Further to this, the CEO noted that the company was recently recognized for its leadership in the area of environmental protection as it was recently deemed the number one oil and gas company on the USA’s 100 Best Corporate Citizens list. It was ranked number nine on the 2020 list for outstanding environmental, social, and governance (ESG) performance.
OilNOW understands that Hess has also been named to the list for 13 consecutive years and is one of only two oil and gas companies to earn a place on the 2020 list.
In his company’s 2019 Annual Report, Hess and his Chairman, James H. Quigley, stated that several efforts were made to ensure the board is climate change literate while noting that it actively engages in overseeing Hess’ sustainability practices. In fact, both Senior Executives revealed that over the past 12 years, the company has reduced emissions by approximately 60% on an equity basis. In addition, it is investing in technological and scientific advances designed to reduce, capture and store carbon emissions, including groundbreaking work being conducted by the Salk Institute to develop plants with larger root systems that according to the Salk Institute are capable of absorbing and storing potentially billions of tons of carbon per year from the atmosphere.
OilNOW also understands that between 2008 and 2019, Hess constantly engaged in accounting for the cost of carbon in its business decisions by conducting scenario planning. This included the Sustainable Development Scenario developed by the International Energy Agency (IEA) to test the resilience of a company’s portfolio against a range of environmental policies and market conditions.