In a notable appearance at the COP28 climate summit in Dubai, Exxon Mobil CEO Darren Woods defended carbon capture technology against recent skepticism from the International Energy Agency (IEA). Woods rejected the notion that wide-scale carbon capture to combat climate change is an implausible “illusion” and drew parallels with the challenges faced by electric vehicles (EVs) and solar energy initiatives.
CEO Woods counters criticism
Exxon Mobil’s CEO, Darren Woods, challenged the recent assessment by the IEA that wide-scale carbon capture is an implausible solution to climate change. Woods emphasized that similar skepticism could be applied to various initiatives, including electric vehicles and solar energy. He argued that no existing solution is currently at the scale required to address the climate crisis comprehensively.
Contextualizing the criticism
The backdrop to this defense is the IEA’s report, issued just before the COP28 summit, which called the fossil fuel industry to a “moment of truth.” The report suggested that the industry must decide between exacerbating the climate crisis or transitioning to clean energy. The IEA specifically criticized the notion that extensive carbon capture could serve as a realistic solution.
Exxon’s shift towards low carbon
Exxon Mobil has been making efforts to position itself as part of the solution to climate change, rather than a contributor. The company has announced a substantial $17 billion investment in its low carbon business, which includes significant funding for carbon capture initiatives. Exxon asserts that the primary issue causing climate change is greenhouse gas emissions, not the existence of fossil fuels themselves.
Oil and gas in the climate transition
CEO Woods maintained that oil and gas would continue to play an “important role” in the global energy landscape until 2050. However, he refrained from providing specific estimates regarding the future demand for these fossil fuels. Exxon’s low carbon strategy involves a $4.9 billion acquisition of Denbury, a company with a substantial carbon dioxide pipeline network, and plans to bury carbon in offshore blocks in the Gulf of Mexico.
Carbon reduction contracts and global impact
Exxon has secured contracts for carbon reduction services with major industrial players in the United States, covering around 5 million tons of carbon dioxide annually. This is part of the company’s strategy to assist customers in decarbonizing. Notably, the global energy and industry sectors currently produce approximately 37 billion tons of CO2 per year. Exxon aims to contribute to carbon reduction while taking advantage of U.S. subsidies, such as tax credits for carbon capture and sequestration.
Future profitability and decarbonization
While declining to provide specific details of the contracts, CEO Woods mentioned that profitability from these deals might be a few years away. The profitability is expected to be bolstered by U.S. subsidies, including tax credits of up to $85 a ton for carbon capture and sequestration, as outlined in the Inflation Reduction Act of the previous year. Exxon sees these initiatives as steps toward helping customers decarbonize and navigating the evolving landscape of climate-conscious business practices.
Exxon Mobil’s CEO, Darren Woods, used the COP28 climate summit as a platform to defend carbon capture technology and articulate the company’s commitment to low carbon initiatives. The discourse reflects the broader narrative within the oil and gas industry as it grapples with the imperative to address climate change and align with global efforts to transition to cleaner energy solutions.