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When Royal Dutch Shell sold its stake in Nigeria’s Umuechem oil field last year, it was on paper a step forward for the company’s climate goals: It could clean up Shell holdings, raise money to invest in cleaner technologies, and move on. Toward net zero emissions by 2050

But as soon as Shell left, the oil field underwent such a significant change that it was spotted from space: brilliantor wastage of excess gas in rising columns of smoke and fire. Flaring releases soot into the atmosphere as well as greenhouse gases that warm the planet.

Around the world, most of the largest energy companies are expected to sell more than $100 billion oil fields and other polluting assets to reduce their emissions and make progress towards corporate climate targets. But they often sell to buyers who give little information about their operations, make little or no commitment to tackling climate change, and are determined to increase fossil fuel production.

new Research Released on Tuesday, it showed that more than twice the 3,000 oil and gas deals between 2017 and 2021 had assets moved from operators with a net zero commitment to non-operators. This raises concerns that assets will continue to be contaminated, perhaps at a higher rate, but away from the public eye.

“You can move your assets to another company and remove the emissions from your own ledgers, but this does not equate to any positive impact on the planet if this is done without any safeguards,” said Andrew Baxter, who heads the energy transition. The Environmental Defense Fund team that performed the analysis.

Processes like this reveal the complex underside of the global energy transition away from fossil fuels; devastating effects of climate change.

In the four years prior to the Umuechem sale in Nigeria, the satellites had seen no routine flare-ups from the site Shell operates in the Niger Delta with European energy giants Total and Eni. But soon after those companies sold the space to a private equity-backed company, Trans-Niger Oil & Gas, an operator with no net-zero goal, flare-up levels quadrupled, according to data from the US. VIIRS satellite Collected by EDF as part of the analysis. Trans-Niger said it plans to triple production at the site last year.

According to EDF research, the biggest buyers in recent years have included state-owned oil and gas companies such as Indonesia’s Pertamina, Qatar Energy and China’s CNOOC, as well as Alabama-based company Diversified Energy, which has amassed tens of thousands of aging. Oil and gas wells across Appalachia.

Among the other top buyers were several less well-known companies. And in a sign of the difficulty in tracking these transactions, the buyers in many other deals remained unknown. Overall, the study showed that the number of transactions that took fossil fuel assets public-to-private ownership accounted for the largest share of deals, exceeding the number of private-to-public transfers by 64 percent.

In response to questions, Shell said it looks forward to seeing the full EDF report. Dutch company said that Divestitures are “an important part of our efforts to renew and upgrade our portfolio” as it seeks to achieve net zero emissions; this represents a company commitment not to add more greenhouse gases than the Earth puts into its atmosphere.

Eni spokesperson Marilia Cioni questioned the local operator and added that she does not see asset sales as a means to reduce emissions. Total and Trans-Niger Oil & Gas did not respond to requests for comment Monday.

This phenomenon, in which the emission generation that causes climate change is transferred from one company to another, also prevents the cleaning of the fossil fuel infrastructure.

In July 2021, oil and gas driller Apache, struggling with operations in Texas’ vast Permian Basin, sold nearly 2,100 wells to Slant Energy, a little-known Louisiana operating company, according to state and federal filings analyzed by ESG Dynamics. , a sustainability data firm.

About 40 percent of these wells were inactive. Before Apache sold the plot, the Houston-based company plugged an average of 169 wells a year to prevent toxic chemicals from seeping into groundwater or releasing methane, a powerful greenhouse gas, into the atmosphere. This speed could have meant that Apache would complete the accumulation of inactive wells in about nine years.

Since Slant took over, he’s only plugged two wells, according to the files. At this rate, it would take 120 years to close all of the existing inactive wells.

The Environmental Protection Agency estimates that every inactive, unplugged well causes between 17,000 and 50,000 miles of greenhouse gas emissions driven by the average gasoline-powered passenger vehicle. already have 1.6 million unplugged wells Across the United States, it has been abandoned by industry tally and in increasing numbers.

Slant spokesman Sean P. Gill said the figures from the EDF “do not appear to be accurate”, without providing further details. Slant has just taken over these wells and “continues to evaluate the economic development of assets in an environmentally responsible manner,” he added.

It’s not valid to assume that a company that buys its wells will have the same program to plug them in, Apache said.

Concerns over emissions diverted to different companies are also refocusing global banking companies, which play a critical role in facilitating coal, oil and gas mergers, acquisitions and other transactions. Climate campaigners calling for the abandonment of fossil fuels have so far focused on banks directly financing fossil fuel projects. But recent examples show that mergers and acquisitions can also have significant climate consequences.

Shell, a publicly traded company, said it disclosed emissions from both its operations and the oil and gas it produces, has corporate goals to reduce greenhouse gas emissions, and is committed to zero flare-ups in its operations. But when an oil or gas field sells, those goals and commitments for that field may come to naught.

The new owners of the Umuechem project said they would instead focus on the rapid increase in productioncan strain the oilfield’s facilities and require significant flare-ups. This is because booming oil production often releases more natural gas, exceeding the field’s ability to collect additional gas.

As major oil and gas producers sell more fossil fuel assets, experts and campaigners say, companies and their bankers must sign contracts or agreements that bind buyers to similar disclosures and emissions reduction targets. They argue that if oil and gas wells and other assets are nearing the end of their life, companies should not be allowed to delegate cleanup responsibilities to operators who either don’t have the resources or have no intention of investing in cleanup. Work.

Kathy Hipple, professor of finance in Sustainability at the Bard MBA and senior research analyst at the Ohio River Valley Institute, said one solution would be for auditors or regulators to begin reviewing every sale and contest a transaction if they don’t have environmental or sanitation obligations or goals. t was calculated.

prof. He pointed to Diversified, a London-listed operator that has purchased aging wells and has become the largest owner of oil and gas wells in the United States in recent years, Hipple said. towards the future. For example, Diversified said its wells will be productive by 2095, allowing it to defer cleanup costs for decades.

Diversified said its business model “takes assets that are often overlooked or neglected, optimizes production, improves environmental performance, and responsibly retires them.” He said he aims to achieve net zero emissions by 2040.