The main European energy players pledge to invest billions in renewable energies and pledge to reduce their emissions. This reflects business concerns about climate change, as governments and investors want businesses to accelerate the production of cleaner energy. However, the US-based energy giants are sticking with fossil fuels and investing insignificant amounts to capture the carbon dioxide released into the air as a result of the burning of fossil fuels.
European energy majors at the forefront of the energy transition
Global integrated energy company Royal Dutch Shell plc RDS.A, headquartered in London, is leading the energy transition. By 2050 or earlier, the company plans to become a net zero emission energy player. The company also predicts that by 2035, its net carbon intensity of the energy products it sells will be reduced by about 30%.
Another energy giant based in Europe headquartered in London, BP plc BP is striving to establish itself as a net zero emissions company by 2050. To achieve this goal, the energy giant has decided to reduce emissions from its oil and natural gas operations to zero. . The integrated energy company also plans to halve the carbon intensity of the energy products it sells to achieve the ambitious target.
Shell and BP currently have Zacks # 3 (Hold) rank. You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.
Commitments of U.S. companies on fossil fuels
Energy companies based in the United States are paying little attention to renewables, however, and are turning to fossil fuels. Exxon Mobil Corporation XOM and Chevron Corporation CLC believes there are potentials in the Permian Basin – the most prolific oil shale area in the United States – and deepwater production in offshore fields. To increase its reserve base, Chevron acquired Noble Energy, which has a portfolio of low-cost assets in the Permian Shale and Eagle Ford.
More importantly, Daniel Droog, vice president of energy transition at Chevron, said the company would not follow what European energy companies are doing to tackle climate change. In particular, the company will focus on profitability to reduce carbon intensity. In addition, Chevron will increase the use of renewable energy only to power its operations.
Instead of focusing primarily on renewables, ExxonMobil has invested for its vested interests in 20% of the world’s total carbon capture capacity.
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Exxon Mobil Corporation (XOM): Free Inventory Analysis Report
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