Emissions from fossil fuels supplied by Exxon and others make the Earth uninhabitable for humans. This is unfortunate, because the energy generated by burning fossil fuels has become the basis of virtually all human activity. Transport, agriculture, industry, the built environment, heating, cooling, social media, bitcoin mining – even warfare – have relied exclusively on fossil fuels for the past 150 years. Wind and solar energy have recently become part of the energy mix, but still represent only a modest amount of the world’s energy needs.
Last week, Darren Woods, CEO of ExxonMobil, sat down to interview David Faber from CNBC. The extensive conversation (you can see everything in the video below) touched on electric cars, the demand for gasoline and diesel in the future, and where Woods sees his company in 2040. His answers were instructive.
Woods said he fully expects all passenger cars sold in the world in 2040 to be electric, but that declining demand for motor fuels will mean the company will return to where it was in 2013 and its business was pretty good at the time. and so it will soldier quite nicely, thanks a lot.
There are many exciting new opportunities for the company on the horizon, he said. Hydrocarbons can be regrouped into literally millions of combinations. Oil and gas are just a collection of hydrocarbons that beg some smart scientist to turn into new products.
Some of them could be used to create the solar panels and wind turbines of the future or even components for these battery-powered cars and trucks. Others can make billions of disposable bottles, straws, food containers and shopping bags. There is literally no end to the things that the oil and gas that Exxon markets can take advantage of, so Woods says there is no need to worry about the company’s future.
He pointed out that Exxon invented butyl rubber, which proves that it can be a leader in innovating the products that society needs. He failed to mention that the invention took place in 1937.
Exxon does not manufacture cars or power stations; it just makes the fuels that power them, Woods said. Then he set out on a tangent known to many who remember Donald Trump’s speeches. The sun is not always shining and the wind is not always blowing, so fossil fuels will always be needed to keep the lights on and lift billions of disadvantaged people around the world out of poverty.
Exxon & The Hydrogen Thing
A few years ago, there was only talk of wind and sun. Today, the conversation has expanded to capture carbon, hydrogen, biofuels and ammonia. Woods says technology proves it can solve our carbon problems by letting the free market work with its magic.
No wonder there is “all of the above” in the camp, which says we will need energy from multiple sources. From there, it easily slides to “we should not give government incentives for wind and solar energy unless fossil fuels also get their fair share.” He even had the audacity to look into the camera and say that Exxon did not seek favorable treatment from the government and never did. Uh, huh.
He quickly pointed out that the United States has abundant reserves of methane – aka natural gas – which can be “reformed” into pure burning hydrogen. However, he very conveniently omitted that the reform process releases large amounts of carbon dioxide into the atmosphere. It did not address the huge amount of documented emissions from methane production, leaks at gas stations and along pipelines, and environmental damage that comes from the fracking that releases all that gas trapped deep underground.
Europe is lucky to have enough hydropower to use to produce “green” hydrogen, but the US is more limited in this regard, so the only alternative is to increase the production of “blue” hydrogen. It’s unfortunate, but what can be done?
David Faber confronted Woods directly with his company’s legacy, especially when he was led by Lee Raymond, the architect of a corporate campaign denying climate change. Woods insisted the company did always followed the science of the subject. 30 years ago, science was still evolving.
There is no doubt today that carbon dioxide released by human activity is driving global warming, Woods said, but we did not always know it. Now, yes, so it is useless to look back and criticize what could have been. Instead, it is time to look to a future in which the free market is advancing the most cost-effective climate solutions. Exxon expects to play a significant role by providing fuels for industry and heavy transport, switching to biofuels and transforming carbon sequestration into a viable business.
Biofuels is a general phrase that includes many alternatives, many of which have questionable climate benefits. Plants are made up of hydrocarbons. Through the magic of science, some of them can be reworked into the production of so-called biofuels. But many plants are also the primary source of food for humans and animals. One gallon of ethanol can be someone else’s daily meal. Woods’s somewhat casual claim that biofuels are the answer to gasoline is superficial at best, false at worst.
During the interview, Woods slammed hard into the drum to capture the carbon, and saw it as a great new business opportunity waiting to be exploited. And Exxon scientists are working hard to make ways a.) Feasible and b.) Profitable. The viewer almost sees his eyes light up as he thinks of all the money they earn by removing the raw materials for which his company is responsible from the atmosphere. They got paid to create it and now they get paid again to remove it. Talk about your capitalist dream!
The problem is that it doesn’t work and shows no signs that it will ever work in the future. And profitable? Not in this life, Darren, and probably not in the next. Faber even pointed out that the world will have to eliminate 4 trillion tons of carbon dioxide by 2040, just so that global heating does not go into hyperdrive. Exxon’s target for the same year is 100 million tons. Talk about how you stayed in the snow.
Price for carbon
Woods says his company absolutely supports the price of carbon as a way to level the playing field. Win the best and most economical technology. The question of how much it should be and what carbon will it cover? You can bet on your lower dollar Woods does not suggest that his company should pay for the carbon dioxide generated by the combustion of its products. Let someone else bear the burden.
Nor should the price be high enough to limit demand, leading to lower profits. In other words, it’s a strategy that gives the impression that you’re doing something while you’re actually achieving very little.
Fulfilling the demand
When Faber suggested that most of the oil and gas reserves be left in the country to prevent further global warming, Darren Woods looked horrified. Without the high demand for oil and gas, Exxon and its colleagues in the industry would not be in a hurry around the world trying to find more.
Yes, something needs to be done to make the Earth uninhabitable for humans (cockroaches and rats always find a way to survive), but that should not involve freezing traditional energy companies. We need an “all of the above” approach. Exxon just wants to do his part to serve humanity.
If you have time, check out some comments on the interview with Woods on YouTube. They are a lot of fun and provide some insight into how the online community thinks of Exxon in general and Darren Woods in particular.
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