Call it an irony of energy transition: Oil giants that produce planet-warming fuels say their size makes them best equipped to launch projects that help tame emissions, Ben writes.
Driving the news: The latest exec to deliver this message is Exxon boss Darren Woods, who yesterday touted the company’s long-term business plans around hydrogen, carbon capture and lower emissions fuels.
- “I think we’re very well positioned there. This is not a game for startups,” he told analysts when touting the business case for Exxon’s “low carbon solutions” unit.
- “These are large scale projects that require the kind of project expertise that we have, require the kind of size and balance sheet capacity that we have, require the technology and operating experience that we have,” Woods said on their Q4 earnings call.
- He reiterated Exxon’s plan to invest $17 billion through 2027, with returns greater than 10%.
Catch up fast: If that line about the startups sounds familiar, it is!
- “If you believe that the energy transition is going to be solved by startups or companies that have yet to be invented, then I would say dream on,” then-Shell CEO Ben van Beurden told Axios‘ Hope King in 2021.
Yes, but: Low-carbon investments remain a small share of the majors’ spending.
- And while European giants are increasingly moving into mainstream renewable power, big projects around carbon storage and hydrogen produced with climate-friendly methods are further behind.
What they’re saying: Andrew Logan, an oil expert with sustainable investment advocacy group Ceres, said scale can be an edge — but it’s hardly destiny.
- “If Darren Woods were correct across the board, Toyota today would be the world’s leading EV company, rather than an also-ran,” he said via email.
- And who knows if Exxon’s making the right bets. “Woods may find that Exxon wins the battle but loses the war, dominating carbon capture projects even as innovation in other low-carbon energy sources undercuts the need for those… projects in the first place.”
Zoom in: Exxon’s various plans include:
- Producing hydrogen with carbon capture at its Baytown, Texas complex around 2027-2028.
- A deal with CF Industries to trap and store emissions from a Louisiana ammonia plant beginning mid-decade.
- A broad concept with a suite of corporate giants for developing a Houston-area carbon capture and storage “hub.”