Apache Corporation

Apache set itself one target aiming to reduce its methane emissions, i.e. the methane leak rate, to 0.37% or less by 2025. This represents a 23% reduction from 2016. The company achieved this target in 2019 but has not updated the target to increase its ambition. Apache’s focus on methane emissions rather than targets to reduce total emissions, indicates a lack of commitment to the low-carbon transition. The company should develop long-term scope 1 and 2 and scope 1, 2 and 3 emissions intensity targets that are aligned with its 1.5°C pathway.

There are some strong elements to Apache’s management of climate change issues. For example, Apache reports using the Task Force on Climate-related Financial Disclosures (TCFD) framework, reviews climate-related risks and opportunities, has board-level oversight of climate change issues, and incentivises methane emission reductions. However, Apache’s transition plan focuses on short-term efficiency and continued hydrocarbon production, which negates the impact of these other initiatives. Apache should build on its existing management of climate change issues and its TCFD alignment to implement a long-term, low-carbon transition plan.

Apache has indirectly opposed climate policy. It is listed as one of five oil and gas companies that supported ‘Texans for Natural Gas’, a grassroots organisation that campaigned against oil pipeline regulations using Facebook advertisements in 2019. The company also contributed USD 1.3 million to the American Petroleum Institute (API) in 2019, although it is unclear whether any of the contribution was in addition to membership fees. API is a trade association for the oil and gas industry that is reported to have opposed numerous climate policies in the USA.

Apache reviews participation in trade associations at the board-level, but it does not take action if associations that it participates in oppose climate policy. The company can increase the credibility of its climate rhetoric by defining a clear position on climate change and by implementing processes to manage engagement with associations that oppose climate policies.

Apache does not have any low-carbon business activities. The company has also not indicated any plans to develop such activities in the future and has not incorporated them into long-term plans or undertaken related research and development. Its business strategy is to continue growing its hydrocarbon production, which will increasingly diverge the company’s performance from its 1.5°C pathway. To achieve its low-carbon transition and reduce climate-related risk, Apache should invest in, and rapidly deploy, profitable and scalable low-carbon business activities.

Apache set a target to reduce its the methane leak rate to 0.37% or less methane emitted per volume of methane produced by 2025; a 23% reduction from the 2016 level. The company achieved this target in 2019 but has not indicated any plans to set new targets.

Apache’s transition plan focuses on improving operational processes and enhancing energy efficiency. The company has not reported how it plans to achieve decarbonisation in the long-term. Instead, it has presented a business plan to expand oil and gas production. There is no evidence of capital expenditure (CapEx) or research and development investment in low-carbon activities.

Although Apache is undertaking initiatives to reduce its operational methane emissions, it continues to undertake CapEx in hydrocarbon exploration and production. In 2019, it invested USD 2.37 billion in upstream activities. The company plans to expand its oil and natural gas assets and begin production in the Guyana-Suriname Basin.

A decrease in the proportion of fuel extraction in Egypt between 2014 and 2019 was insufficient to drive alignment with its 1.5°C pathway for scope 1 and 2 emissions intensity. Further, a growth in the share of oil in the company’s sold product mix resulted in an increasing scope 1, 2 and 3 emissions intensity.

Apache lacks an ambitious and long-term climate strategy, preferring to invest in short-term efficiency gains. It has opted to focus on increased hydrocarbon exploration and production, and lacks long-term commitments to deliver low-carbon business activities and transition away from oil and gas activities.