Western Investors Reject Environmental Group’s Climate Proposal

(Bloomberg) – Occidental Petroleum Corp. shareholders rejected an environmental group’s proposal for the oil explorer to set more rigorous targets for greenhouse gas emissions.

Shareholders voted 83% against the proposal during its annual meeting on Friday, according to preliminary results issued by the company.

The vote was a blow to environmental activists that have mounted a more aggressive campaign to pressure major oil producers to lay out plans to combat climate change.

Dutch investor group Follow This proposed that Occidental set short-, medium- and long-term targets to reduce carbon emissions, including those of its customers, in line with the Paris Agreement. The proposal won support from a key proxy advisory firm, Institutional Shareholder Services Inc., which issued its first recommendation that disagreed with a major oil company position that it has Paris-aligned emissions targets.

“We have a rapidly closing window to take action,” Mark van Baal, founder of Follow This, said during the meeting. “The goals of the Paris Climate Agreement will not be met unless our medium- and large-scale reductions in global emissions come through today.”

Occidental’s board opposed the proposal, calling it “misdirected” because the oil producer was the first US energy company to set targets to zero out emissions from both its operations and its customers. The company has set 14 specific “goals” to reduce emissions the board believes align with the aim of the Paris Agreement.

The company plans to cut emissions from operating assets worldwide by at least 3.68 million metric tons per year by 2024, a 13.3% reduction from the company’s 2019 emissions. It also looks to achieve net-zero emissions from its operations between 2035 and 2040. Ultimately, Occidental’s goal is to achieve net-zero emissions from both its operations and customers by 2050.

However, those goals rely heavily on capturing carbon dioxide and burying it, a technology that’s so far been prohibitively expensive and is not yet commercial.

Occidental plans to build 70 carbon-capture facilities globally by 2035 that will each remove as much as 1 million tons per year of greenhouse gas directly from the atmosphere. Construction on the company’s first $ 1 billion direct-air-capture plant is expected to start later this year in the Permian Basin of West Texas, with startup slated for late 2024.

When fully built, the plant billed as the world’s largest DAC project, will remove emissions from the equivalent of about 215,000 cars annually from the atmosphere, Occidental said. The company is also investing $ 100 million this year to develop three carbon sequestration hubs by 2025.

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