By Paul Takahashi STAFF WRITER
Exxon Mobil plans to use a combination of technologies to become a net-zero emissions company by 2050, joining U.S. rival Chevron and Europe’s largest oil companies in a quest to meet pollution targets set by the Paris climate accord.
Irving-based Exxon, the largest oil company in the U.S., on Tuesday said it plans to remove and offset its carbon emissions from oil and gas operations over the next three decades. Exxon also has set a 2030 net-zero emissions target for its operations in the Permian Basin, home to more than 40 percent of its domestic oil and gas production. Net-zero emissions is achieved when the amount of greenhouse gases produced is offset by the amount of earth-warming pollution removed from the atmosphere.
“ExxonMobil is committed to playing a leading role in the energy transition, and Advancing Climate Solutions articulates our deliberate approach to helping society reach a lower-emissions future,” CEO Darren Woods said. “We are developing comprehensive road maps to reduce greenhouse gas emissions from our operated assets around the world, and where we are not the operator, we are working with our partners to achieve similar emission-reduction results.”
Exxon’s lastest climate plans, which come two years after BP became the first oil major to set such an emissions target, is the clearest sign yet the oil industry is starting to acknowledge that climate change threatens the business models of its fossil fuel producers. The Texas oil major had long been recalcitrant, confident fossil fuels would remain viable even as society began to more urgently seek alternatives. Exxon’s rival Chevron in October set a similar net-zero target by 2050.
Mike Coffin, head of oil and gas at London-based financial think tank Carbon Tracker, said Exxon’s net-zero ambitions are a “step forward” for the company, but said Exxon still lags behind its peers in addressing customer emissions and setting absolute limits on its carbon emissions.
“To protect both the planet, and shareholders’ interests, Exxon must seek to transition its business towards one that is sustainable in a low fossil fuel demand world,” Coffin said. “If it continues to invest in oil and gas then it continues to increase its transition risk exposure, whether to policy action, society shifts or the out-competition of its product by renewables. Or all three.”
The company’s announcement also comes about eight months after a climate-minded activist investor won a quarter of the seats on Exxon’s board of directors, shaking up corporate oversight of the company. Although these new board members are a minority on the board, environmentalists had said they are hopeful having climate-minded executives in the boardroom would lead to change.
Exxon’s net-zero goals, however, cover only emissions from its oil and gas operations, not from the use of its petroleum products by customers. Exxon said it is committed to helping them reduce their greenhouse gas emissions by investing in carbon capture and storage, hydrogen and biofuels, including plans for a $100 billion carbon-capture hub in Houston.
“Today’s announcement brings Exxon in line with the other five supermajors, which had all previously announced targets for net zero by 2050,” said Will Scargill, managing analyst at analytics company GlobalData Energy. “However, it stands out among its peers as the only one not to have set targets around … emissions from the products it sells. This gap in strategy puts it at risk of losing ground as a major player in the energy space as the global transition to cleaner energy consumption accelerates.”
Exxon last year said it plans to invest more than $15 billion by 2027 to reduce its emissions, with a focus on accelerating technology that would capture carbon dioxide from industrial operations and store it deep underground. The company, which has moved aggressively in recent months to tackle its carbon emissions, has long supported a tax that would help pay for and encourage lower-carbon initiatives.
In September, Exxon said it is allowing an independent evaluator to grade and certify its natural gas production to give its customers confidence that they are buying natural gas produced with lower emissions.
Exxon last month said it plans to eliminate all routine flaring in the Permian by the end of 2022, in support of the World Bank’s zero routine flaring initiative. The company plans to reach its net-zero goals in the Permian Basin by using low-carbon electricity, including renewable energy, hydrogen and natural gas with carbon capture; detecting methane emissions; eliminating routine flaring and upgrading equipment to eliminate venting emissions.
And in December, the company said it is working with a third party to deploy 24 satellites starting in 2023 to detect methane leaks in the Permian Basin.
Exxon said it expects to reduce greenhouse gas emissions from its operations by up to 50 percent by 2030, compared with 2016 levels, including a reduction in methane emissions of up to 80 percent and a reduction in flaring of up to 70 percent. The company estimates it has reduced greenhouse gas emissions from operations by 15 to 20 percent in 2021, compared with 2016 levels, including a reduction in methane emissions of up to 50 percent and a reduction in flaring of up to 45 percent. paul.takahashi@chron.com twitter.com/paultakahashi