EOG Resources, Inc. is a publicly listed upstream oil and gas company headquartered in the USA. In 2020, it had USD 11.03 billion in revenue and a reported 2,900 employees*. EOG Resources is an exploration and production company operating predominantly in the USA, with smaller operations in Trinidad and Tobago and China. The company shows no intention to transition away from hydrocarbon production.
EOG targets a scope 1 emissions intensity of 13.5 tonnes of CO2 equivalent per thousand barrels of oil equivalent by 2025, representing a 21% reduction from 2017. The target covers only US operations, which accounted for approximately 94% of EOG’s production volumes in 2019. Based on the company’s reported scope 1 emissions intensity, it is on track to meet this target by 2025. However, it needs to at least double its ambition to align with its 1.5°C pathway.
EOG should develop a long-term target with regularly spaced intermediate targets at frequent intervals to hold management to account on actions for emissions reduction. The company’s targets should also cover scope 3 emissions.
There is no evidence that EOG has long-term decarbonisation plans beyond 2025. To meet its scope 1 emissions intensity and methane intensity reduction targets, it focuses on short-term improvements to energy efficiency, such as reducing flaring and incorporating solar power into its operations. The company has also formed an initiative called the Sustainable Power Group with the aim of identifying and implementing low-emissions power generation.
To develop a strong low-carbon transition plan, EOG needs to develop long-term and financially evaluated goals to decarbonise. The company should also consider scope 3 in-use emissions reduction and development of low-carbon business activities in its planning.
EOG has conducted a climate scenario analysis for its 10,500 premium oil and gas wells, which earn at least a 30% return, using the International Energy Agency’s (IEA) Sustainable Development Scenario (SDS). The company’s analysis extends up to 2040 and uses SDS-aligned carbon and commodity pricing. Although the company reports that the analysis resulted in a positive net present value for future cash flows, it does not disclose any details on its financial results. EOG has an opportunity to improve its understanding of climate risks by undertaking analysis using a 1.5°C scenario across its entire portfolio.
EOG does not undertake any low-carbon business activities to drive its energy mix to low-carbon energy, reduce energy demand or develop carbon capture and storage (CCS) and negative emissions technologies (NETs). Moreover, there is no evidence that the company plans to develop any low-carbon activities in the future. Without a plan to transition away from fossil fuel activities by developing low-carbon opportunities, such as renewable energy generation for sales to third parties, the company will be unable to transition to a low-carbon economy.
EOG receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. Although the company is on track to achieve its 2025 emissions intensity target, this target is not aligned with its 1.5°C pathway and does not include scope 3 emissions. This is critical, particularly as EOG’s scope 1, 2 and 3 emissions intensity is estimated to have increased between 2014 and 2019 due to a growing share of oil in its sold product mix. Moreover, EOG has no plans to undertake low-carbon business activities, such as developing low-carbon products, and has not indicated any decarbonisation plans beyond 2025.
EOG has a scope 1 emissions intensity target to produce 13.5 tonnes of CO2 equivalent per thousand barrels of oil equivalent by 2025. This represents a 21% reduction compared to 2017. The target only applies to its US operations, which accounted for 94% of the company’s production volumes in 2019.
EOG plans to reduce scope 1 emissions and methane intensity by making energy efficiency and technological improvements, such as reducing flaring and incorporating solar power into its operations. The company has not reported how much of its CapEx will go towards these mitigation technologies.
EOG has established an internal initiative, the Sustainable Power Group, to implement low-emissions power generation. However, the company continues to pursue hydrocarbon activities and has invested USD 4.95 billion in exploration and development drilling in 2019.
EOG reports a reduction in the scope 1 emissions intensity of its US operations between 2017 and 2019 due to energy efficiency improvements. However, its production volumes grew 38% since 2014, with an 8% rise in the proportion of oil. This has driven a small increase in the company’s scope 1, 2 and 3 emissions intensity.
Other than improving energy efficiency, EOG undertakes no low-carbon activities. It has no plans to reduce reliance on oil and gas production, viewing it as “critical to the future global energy supply”.