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Many energy players are teaming up to curb methane emission, in order to ward off global warming. As per a recent news, three leading integrated energy players — Royal Dutch Shell plc (RDS.A - Free Report) and BP plc (BP - Free Report) and ExxonMobil Corporation (XOM - Free Report) — have joined hands for the same purpose.

Earlier, Royal Dutch Shell and BP have collaborated with other oil majors for similar industry-wide cooperation on environmental issues. However, ExxonMobil has not been active in such campaigns led by its European peers. Other players like Total SA (TOT - Free Report) and Statoil ASA (STO - Free Report) are also supporting the collaboration of BP and Royal Dutch Shell.

The group aims to support and drive values that will help in cutting methane emissions from natural gas production, transportation and utilization. The new initiatives are expected to be announced soon.

Recently, ExxonMobil has been actively involved in implementing climate change policies, thanks to tremendous pressure from investors and environmentalists. The primaryobjectivesinclude the restriction of greenhouse gas emissions, reduction in global warming, appointment of a climate expert on the board, reports on fracking activities and climate change impact assessments.

As a result, the company has increased climate-related disclosures. These disclosures include affirmation ofthe company’spledge to the Paris climate agreement, inclusion of an environmental expert to its board and to decrease emissions from its operations. However, ExxonMobil isavoiding shareholders’ request for additional information regarding the impact ofclimate change its operations.

Methane and its Impact on Environment

Similarinitiatives by the industry have had a widespread impact. The new attempt is targeting to reduce the utilization of methane, another so-called greenhouse gas that is the key constituent of natural gas.

Notably, lesser amount of carbon dioxide is released during the burning of natural gas compared to oil or coal. However, unburnt methane can escape into the atmosphere during the production process, thanks to, leaks.

Per a recent International Energy Agency study,oil and gas operations worldwide release about 76 million tons of methane per year, which is more than the entire natural gas output of Australia.

ExxonMobil also launched a plan to restrain methane emissions from its onshore assets in the United States. The company plans to replace old equipments with updated technology.

Details

The replacement plan is a three-year program. The outdated natural gas-powered pneumatic pumps are more prone to methane leaks. ExxonMobil will replace the obsolete parts with compressed air-powered pumps, which will provide the appropriatepressure and temperature regulation.

ExxonMobil will also focus on employee training to reduce methane emissions. The company plans to study the use of satellites, drones and other relevant equipment in controlling future leakages. The company's ally, National Oceanic and Atmospheric Administration may help the company with drones for detecting methane.

Zacks Rank

Currently, BP sports a Zacks Rank #1 (Strong Buy), while ExxonMobil carries a Zacks Rank #2 (Buy). Shell has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

A major exploration and production company, BP, delivered an average positive earnings surprise of 26.80% in the last four quarters.

ExxonMobil is world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. It posted an average positive earnings surprise of 8.81% in the last four quarters.

Royal Dutch Shell is involved in all phases of the petroleum industry from exploration to final processing and delivery. The company delivered a positive earnings surprise of 18.07% in the preceding quarter.

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