Exxon Mobil CEO Defends Carbon Capture Strategy at COP28

         

Exxon Mobil CEO, Darren Woods, defends the use of carbon capture to fight climate change at COP28, rejecting criticism from the IEA.

ExxonMobil CEO Challenges IEA Criticism

Exxon Mobil CEO, Darren Woods, has pushed back against the International Energy Agency’s recent criticism of using carbon capture to combat climate change. He dismissed the IEA’s assertion that carbon capture was an unattainable ‘illusion,’ comparing it to the challenges faced by electric vehicles and solar energy.

Woods’ Perspective on Climate Solutions

Woods emphasized that no current solution is of the scale required to effectively address climate change. He also noted that criticisms regarding implausibility could be applied to various climate initiatives, including carbon capture, electric vehicles, wind, and solar power. Woods highlighted the commercial viability of electric vehicles, which constitute approximately 13% of the global market, as well as the rapid expansion of solar and wind deployments.

Exxon’s Shifting Stance

The CEO’s presence at the COP28 climate summit marked the first attendance by a CEO of Exxon, signifying a notable shift in the stance of fossil fuel companies. They are seeking to position themselves as contributors to resolving global warming, as opposed to being viewed as perpetuators of the issue. The conference’s focus on the future role of carbon capture technology and fossil fuels underscores the significance of Woods’ participation.

IEA Report and Exxon’s Response

The IEA report, released just prior to COP28, presented a critical juncture for the fossil fuel industry, urging companies to decide between exacerbating the climate crisis and transitioning to clean energy. It challenged the notion perpetuated by oil and gas companies that continued drilling could be justified by mitigating emissions through carbon capture. Exxon, on the other hand, has invested $17 billion in its low carbon business, including carbon capture, and contended that the primary issue lies with greenhouse gas emissions rather than the use of fossil fuels.

Exxon’s Investments and Future Outlook

Exxon’s strategy involves substantial investments, such as the $4.9 billion acquisition of Denbury and its extensive carbon dioxide pipeline network. This acquisition is integral to the company’s plans for carbon burial in offshore blocks in the Gulf of Mexico. Exxon has secured long-term contracts with major industrial entities to reduce carbon emissions, aiming to cover around 5 million tons of carbon dioxide annually. Notably, global energy and industry currently produce approximately 37 billion tons of CO2 per year.

Financial Aspects and Timeline

While declining to divulge specific contract details, Woods highlighted the profitability of these investments, citing U.S. subsidies of up to $85 per ton for carbon capture and sequestration, as stipulated in last year’s Inflation Reduction Act. He anticipates that the deals will become profitable in a few years, emphasizing Exxon’s role in enabling customers to decarbonize while capitalizing on the available tax credits.

Outlook on Fossil Fuels

Woods expressed confidence in the lasting significance of oil and gas, envisioning an important role for these resources through 2050. However, he refrained from providing a specific estimate for future demand levels, emphasizing the company’s commitment to a low carbon strategy and its contributions to reducing carbon emissions.

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For daily in-depth coverage of COP28, readers can subscribe to the Reuters Sustainable Switch newsletter for the latest insights and updates. The reporting on COP28 is performed by Richard Valdmanis, with editing by Katy Daigle.

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