San Antonio Express-News (Sunday)
Exxon Mobil doublespeak reveals climate change challenge
Exxon Mobil CEO Darren Woods promises the oil giant is critical to supplying the world with clean, renewable energy, but the corporation’s actions speak louder than words.
Last week, Woods reported record-high annual profit in 2022, raking in $55.7 billion for shareholders. That’s $10 billion more than the previous record set in 2008. Give him some credit; the boss outperformed expectations.
What analysts on the conference call wanted to know, though, is what’s next? Woods insisted Exxon will play a significant role in the energy transition.
“We continued to expand our Low Carbon Solutions business, recently signing the first-of-its-kind customer contract to capture and permanently store up to 2 million metric tons per year of CO2,” he said. “This agreement … highlights how Exxon Mobil can leverage our advantages to help others reduce their emissions and build an attractive business.”
While Big Oil’s lobbyists complain about the Biden administration’s climate efforts, Woods is a fan of the Inflation Reduction Act.
“We shared our plans to invest approximately $17 billion in lower-emission opportunities from 2022 through 2027, up from $15 billion in our prior plan,” he added. “We’ll advance our work to reduce greenhouse gas emissions intensity in our operated assets and help customers reduce theirs.”
Then he explained how Exxon would spend up to $25
billion this year alone on capital investments and exploration for more oil and natural gas. Herein lies the rub.
Woods and Exxon are making progress in reducing emissions and recognizing that stopping climate change means reaching net-zero carbon emissions. I understand Woods is walking a tightrope between generating shareholder value today and planning for the company’s future. However, business intelligence firm GlobalData reports Exxon’s plan, along with other oil companies’, would blow any chance of limiting global warming to 1.5 degrees Celsius. Outsiders should be forgiven for gawking at the company’s contradictions and questioning Woods’ sincerity.
Exxon’s projects in Guyana are an example of good intentions
and bad outcomes. I wrote last year about how Exxon agreed to all kinds of limits on emissions, only to convince the government to lift those restrictions once the wells started operating.
Since then, Exxon has found even more offshore oil in Guyana. Yet three years after its completion, Exxon is still withholding an audit of the company’s $460 million of expenses due to the government, the minister of natural resources told Guyana’s Starbroek News.
Critics want to see the audit, which is supposed to be public, to ensure Exxon is not overcharging the government.
Closer to home, Woods touts a plan to generate hydrogen as a clean fuel while capturing carbon at its Baytown facility. The project is central to Houston’s plan to become a hydrogen
hub.
Yet, the nonprofit Environmental Integrity Project reports that Exxon’s Baytown refinery is the nation’s highestvolume water polluter of total dissolved solids, which include chloride and sulfates.
Last month, Exxon announced it had stopped routine flaring of surplus natural gas in West Texas’ Permian Basin, a huge step toward ending a practice banned in other states. The company has proclaimed support for stricter limits on global emissions.
Matt Kolesar, Exxon’s chief environmental scientist, told Reuters: “We need strong regulations, so it doesn’t matter who owns the facility.” He added that Exxon’s investment to reduce emissions of methane, the main component of natural gas, pays for itself because the saved gas is sold.
Simultaneously, the American Petroleum Institute, the industry’s lobbying group that Exxon finances, wrote a letter last week against considering greenhouse gas emissions in federal environmental reviews of new oil and gas projects.
Exxon has also joined the API in asking the U.S. Supreme Court to overturn an Interior Department ban on fracking for oil off California’s shore.
“If allowed to stand, the decision below will undermine the development of oil, natural gas and renewable energy on the entire Outer Continental Shelf,” industry lawyers said.
For all of Woods’ talk about leading the energy transition, he’s still committed to growing oil production, not reducing it. Exxon plans to produce 1 million barrels a day from the Permian in 2027. He’s also committed to increasing Exxon’s plastics business.
The industry argues the world needs energy, which these companies provide. In the long run, Woods hopes to make money selling hydrocarbons to consumers and then have them pay Exxon again to capture the carbon.
Common sense asks, why not invest in simpler ways to produce energy? Woods and other Big Oil executives are looking for ways to profit, not provide the cleanest, cheapest and most reliable energy.