Permian Basin giant Pioneer Natural Resources Co. has formally adopted targets by 2030 to sharply cut emissions across its Lower 48 operations, and it plans to tie executive incentive compensation to the goals.
The strategy, to cut greenhouse gas (GHG) emissions by 25%, with methane emission intensities by 40%, was laid out in the Dallas-based independent’s 2020 Sustainability Report. The report details Pioneer’s focus on environmental, social and governance (ESG) and health, safety and environment (HSE) strategies, which CEO Scott Sheffield said are “a top priority.”
The emission intensity reduction targets are aligned with the Task Force on Climate-related Financial Disclosures (TCFD) criteria for target setting.
The Task Force is developing recommendations for voluntary climate-related financial disclosures for lenders, insurers and investors. BP plc, Chevron Corp. and Royal Dutch Shell plc are among the energy operators aligned with the TCFD criteria.
Pioneer also said it would continue to hold a “leadership position” by minimizing its natural gas venting and flaring, which has become a big issue in the Permian. Pioneer’s goal is to limit flaring intensity to less than 1% of gas produced, with assets set to be acquired from a pending takeover of Parsley Energy Inc. by 2022.
“In addition, Pioneer will end routine flaring (as defined by the World Bank) by 2030, with the aspiration to accomplish this by 2025,” management said.
“Our pending acquisition of Parsley combines similar values with a shared commitment to environmental stewardship,” Sheffield said. “Pioneer has a bright future supplying low-cost energy to the world while adhering to the highest ESG standards.”
Chairman J. Kenneth Thompson said with ESG and HSE goals in mind, Pioneer is increasing the weighting of those metrics in executive incentive compensation beginning next year to 20% from 10%.
“While board engagement is important, execution on the ground is critical to achieving our goals outlined in this report,” Thompson said. “The high standards in which our employees perform their work translates into a focus on safety, a commitment to environmental excellence and a culture that promotes strong social values.”
In the report, Pioneer also said it was nearing completion of a water infrastructure project in Midland, TX, which is in the heart of the Permian. Four years ago Pioneer and officials in Midland agreed to a groundbreaking private-public partnership. The deal is set to provide Midland citizens with a steady source of freshwater and give Pioneer a ready supply of reclaimed water for its extensive oil and gas operations within the Midland sub-basin of West Texas.
The project, management noted, represents “a significant milestone in Pioneer’s ongoing freshwater reduction strategy.”
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