By Mathew Carr
Oct. 25, 2023 — Chevron’s $53 billion swoop for rival Hess is also a carbon trade worth at least $750 million over 10 years.
And when Chevron’s effectively buying carbon, even via a back door, everyone should take note.
Oil and natural gas company Hess has agreed to spend that three quarters of a billion dollars on carbon credits linked to forest protection in Guyana at $20 a ton. That’s 13 times current market prices, though these are arguably better-than-market carbon credits.
I could not immediately find evidence from this week that Chevron is seeing the forest carbon as key, but it DID say this as it made its purchase:
“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Chevron Chairman and CEO Mike Wirth. “Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”
The Hess carbon deal did get criticised — some of it not fair, according to my view, here below.
I do agree that $20 a ton is too low for this deal, but the structure seems to imply that the price paid might be higher than that. See some details here – search for “credits”:
This pathway does not include scope 3 emissions
Ideas for scope 3: Hess
Attractive Hess
CarrZee comment: What’s key in these carbon deals is that the people of Guyana get a fair portion of the finance from the deal (and also from the oil and gas deal, of course). Transparent accounting is key.