Zephyr Energy plc, the Rocky Mountain oil and gas company focused on responsible resource development, announced on June 8 that it intends to achieve carbon-neutrality across its operational footprint by 30 September 2021. (Logo quoted from Yahoo’s image)
This industry-leading pledge is a major first step towards near-term delivery of hydrocarbons produced with an operational "net-zero" carbon impact, and the Company's Board members are unanimously committed to this initiative.
As an integral part of this undertaking, Zephyr has agreed to collaborate with the Prax Group, a British multinational independent oil refining, trading, storage, distribution and retail conglomerate dealing in crude oil, petroleum products and bio-fuels, headquartered in London, United Kingdom.
The Prax Group, which has trading offices in London, Singapore and the United States of America, will work with Zephyr to measure, reduce and mitigate greenhouse gas (GHG) emissions across Zephyr's businesses, with mitigation efforts primarily focused on the purchase of sustainability/decarbonisation offsets(called Verified Emission Reductions or VER) from reputable pre-vetted developers of sustainable projects.
This exercise will include Zephyr's current corporate activity,its non-operated production assets in the Williston Basin, North Dakota, US, and its upcoming appraisal drilling project in the Paradox Basin, Utah, US.
The cost to purchase the appropriate number of VERs to offset Zephyr's growing operational footprint is expected to average well under $1 per barrel of oil equivalent produced, although the net cost to Zephyr may be considerably less given the potential to sell oil volumes at a premium as a result of the anticipated "net-zero" operational carbon status of those volumes.
Purchases of VERs will be staged in increments matching Zephyr's forecast production profile to facilitate effective cash management. Recent market-based evidence suggests that purchasers and supply chain partners of "net-zero" operated volumes are willing to absorb costs associated with the purchase of VER offsets related to oil and gas production.
Zephyr's initial efforts will be focused on its Scope 1 GHG impacts, which cover all direct emissions from Zephyr-owned or controlled sources - from the drilling and production of operated and non-operated hydrocarbons through to transport to the refinery, as well as all other corporate emissions.
Over the next few months, Zephyr and the Prax Group will focus on measuring, reducing and mitigating operational GHG emissions across the company, and Zephyr's pledge to achieve carbon-neutral operations in a rapid manner is demonstrative of Zephyr's commitment to achieving sector-leading environmental standards.
Zephyr's Board also understands that mitigating the company's operational CO2 impact is only a first step - emissions from the ultimate end-use of produced volumes have a significant CO2 impact as well.
Going forward, Zephyr pledges to work with potential end-users of its products to explore routes to more fully offset its product CO2 (Scope 3 Emissions1) to the greatest extent possible.
In addition to the environmental benefits that will result from Zephyr's efforts to reach carbon-neutrality, the company anticipates that this approach will also yield economic benefits - including expanded access to a wider group of potential institutional investors, as total ESG-focused assets under management are currently estimated to be over US$30 trillion globally.
Moreover, the average cost of capital for companies with committed ESG and decarbonisation initiatives has been shown to be demonstrably less than that of traditional resource companies. The Board believes that incremental regulatory benefits may also materialise from Zephyr's actions.
(IRuniverse)
