- Environmental activists criticize Chevron Corp’s $5 billion play to buy Noble Energy, saying the deal will boost the company’s production of fracked fossil fuels.
- Chevron acquires Noble’s fields in regions including the Permian Basin — where the controversial practice of hydraulic fracturing is widely employed to extract oil.
- Activists are concerned that more drilling will add to carbon emissions at a time when world leaders are calling for switch to renewable energy sources.
Environmental activists slammed Chevron Corp.’s $5 billion deal to buy Noble Energy Inc., in a transaction that would increase the oil major’s footprint in the U.S. shale oil patch.
Chevron’s play for Noble, which was announced on Monday, will add to the company’s oil and gas generating portfolio in multiple geographies including the giant Leviathan gas-field off Israel’s coast as well as the U.S. Permian basin — a shale oil-rich area that encompasses western Texas and southeastern New Mexico.
The region is ground-zero for companies that pioneered drilling and hydraulic fracturing techniques to extract fossil fuels that spurred a historic U.S.oil and gas production boom during the last decade.
Known as fracking, the process involves blasting a mix of water and chemicals into a drilled well to release hydrocarbons, and has been criticized for contaminating groundwater and causing earthquakes.
Chevron’s latest move, coming days after it joined the world’s biggest petroleum producers in committing to cut greenhouse gas emissions, will harm the environment, says Nadia Steinzor, the community empowerment project manager for Earthworks. The group has been investigating what it says is pollution coming from Chevron’s existing oil and gas operations.
“Chevron has failed to live up to climate commitments, as evidenced by Earthworks’ documented methane and health hazardous air pollution from Chevron operations,” Steinzor told Karma in an email. “Markets are dramatically shifting and bold climate action is needed now. Chevron needs fewer polluting assets, not more.”
Environmentalists are also concerned that expanding oil and gas exploration will exacerbate carbon emissions that have been linked to climate change and more extreme weather patterns that may disrupt economic activity worldwide.
Chevron declined to comment for this article.
The deal comes as U.S. shale producers have been hurt by the pandemic. Producers such as Diamondback Energy Inc. and Noble Energy previously downsized their operations due to weak demand and an environment where investors are less willing to throw cash at the industry due to the past low returns generated by the sector.
Analysts foresee that more big oil majors may be able to pick up distressed assets in the Permian as the downturn continues.
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