November 14, 2024 • 44 mins
Reporter Akshat Rathi sits down with ExxonMobil CEO Darren Woods, who made his second-ever appearance at the United Nations climate conference. Woods made the case for why incoming US president Donald Trump shouldn’t exit the Paris Agreement, and should uphold the country’s monumental climate legislation passed under the Biden administration. It’s quite the tone shift for a company that has a well-documented history of sowing doubt about the dangers of global warming. Listen now, and subscribe on Apple, Spotify, or YouTube to get new episodes of Zero every Thursday.
Explore further:
- Past episode about what’s at stake at COP29 in the aftermath of President Trump’s election
- Past episode about the infamous fossil fuel lobbyist Don Pearlman and his role in the COP process
- Past episode with Uber CEO Dara Khosrowshahi on why its green goals are good for business
Zero is a production of Bloomberg Green. Our producer is Mythili Rao. Special thanks to Kevin Crowley, Jen Dlouhy, Siobhan Wagner, Aaron Rutkoff, Jessica Beck and Ethan Steinberg. Thanks also to the Atlantic Council, the International Chamber of Commerce and Uve Sabirowsky. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to zero. I am Akshatrati. Today Egxon's new tactic.
An oil CEO walks into a climate conference. No, it's
(00:21):
not a joke. Actually, these days it's not even an
uncommon occurrence. But it is still a big deal when
that CEO is Darren Woods, who leads Exonmobile Corporation. Regardless
of where this interiview happened, I would have jumped on
the opportunity. Far too few oil CEOs opened themselves up
(00:41):
to journalistic scrutiny. That it was at a climate conference
in Baku, Azerbaijan only made it more interesting. And this
was not Darren's first rodeo. He became the first Exon
CEO ever to attend a climate conference at COP twenty
eight in Dubai last year. When we spoke, it was
only days since the US election result had come out,
(01:03):
and Darren had things to say about Donald Trump that
I wasn't expecting. He also had strong ideas about how
Eggxon can be a positive force on climate. Now that
might seem odd. It is among the world's largest oil
companies and it has increased oil production quite a lot
over the last few years. There is also a well
(01:25):
documented history of companies like Eggxon showing doubt about climate
science to slow down climate action. But something has clearly
changed and it's worth hearing Darren's take. Welcome everybody to
(01:54):
a live taping of the Zero Podcast at COP twenty nine,
and welcome to the show, Darren.
Speaker 2 (01:59):
Thank you. It's good to be so here.
Speaker 1 (02:01):
We are in Baku, And before I get to important questions,
let me ask you what are you doing for fun?
While you're in od Zerbaijan. People keep recommending to me
that I should take a bath in crude oil. It's
a thing that a famous spa offers over here, and
I fact checked it and it's real.
Speaker 2 (02:19):
I'm not doing that. I got in last night and
I'm spending the day here talking to a number of
people trying to share ex Molble's perspective on how we
can contribute to this challenge that we're all discussing this week.
Speaker 1 (02:31):
So let's get to business. Then, many people here will
see Eggxon as a barrier to tackling climate change. But
you're here at a cop. You're here at a cop
for the second time, so you clearly don't think so
why do you come to a cop?
Speaker 2 (02:45):
Well, I think one of the things that's been happening
over the last several years is the challenge of significantly
reducing emissions while continuing to meet the growing demand for
affordable energy is a tough challenge to solve. I think
the paulice that have been pursued to date are very
narrowly focused on limiting the supply of traditional sources and
(03:06):
trying to drive more expensive alternatives. That frankly isn't accomplishing
the overall objective. If you look at where we stand today,
oil is that record levels of demand a coal, gasoline, diesel,
and so I think while wind and solar, elected vehicles
are going to play a very important role, they're necessary,
they're not sufficient. We need more solutions. Frankly, as a company,
(03:28):
we think we can bring those solutions to bear. If
you look at what we're doing today, we have the
only large scale carbon caption storage system in the world.
We've got five customers with almost seven million tons per
am of contracted storage for CO two. No other company
in the world has that. We're developing the world's largest
(03:49):
virtually carbon free hydrogen facility in the US. We've got
plans to build that if the IRA legislation gets translated
into regulation. We're developing a new technique for producing lithium
to supply battery markets. We're doing work on carbon and
we have an opportunity to build a new type of
anode for batteries which have the potential to increase battery
(04:11):
capacity by thirty percent. And so a lot of things
we're doing across the very broad spectrum of opportunities, leveraging
our core capabilities to try to help reduce the world's emissions.
Speaker 1 (04:21):
But COP is mainly about countries negotiating over I will
say laborious text because I've seen some of that text.
What conversation do you have as a corporate CEO here
at COP that are beneficial to you as a company.
Speaker 2 (04:35):
Well, I think it's trying to make sure we have
a good understanding of where people are, what their concerns are,
where they're focused at. You know, there are a lot
of ambitions and aspirations that come out of the COP discussions.
We're very focused on the action and how do you
go from ambition to plan. So we're trying to help
provide a perspective from a company in an industry that
has a very long history of taking ambitious plans or
(04:58):
ambitious objectives in trans leading those into real war plans
and ultimately putting steel in the ground and building facilities
to accomplish them.
Speaker 1 (05:06):
So we are going to unpack a lot of the
solutions you've talked about, but before we dive deeper into that,
I think it's worth addressing too elephants in this room,
Trump and Trust. Let's start with Trump. Do you think
Donald Trump, he's going to be in his second presidential
term in the US in January, do you think Donald
(05:27):
Trump is a threat to global climate action?
Speaker 2 (05:30):
I think you know, if you look at the time
scale it's going to be required to address this challenge,
and the way that we think about it is a
long term investment. There's work that has to be done,
and so I'm not sure that any one administration is
going to significantly advance the pace of the transition or conversely,
significantly slow the pace. I think there's a lot of
(05:52):
work that needs to be done across the world, a
lot of sectors that need to be advancing the work
in this space. Frankly, we need more comprehensive policy, things
that encourage and tap into the capabilities of companies and
markets to reduce submissions. We're leaving a lot of opportunity
on the table today as a global society, as governments
around the world, there's a lot of work to be
(06:12):
done here. I don't think we're depending on anyone administration
or anyone country, frankly, to advance the global objectives.
Speaker 1 (06:18):
So even as the president of the largest economy in
the world, the second largest emitter, if it's a four
year term, you're not that worried, But you do want
to see policies. And we know that Trump pulled the
US out of the Powis Agreement the first time around.
He has said that he will do so again. You
have said that you would see that as a mistake.
(06:41):
Trump pulling the US out of the Powis Agreement will
be a mistake. Why would it be a mistake.
Speaker 2 (06:46):
First of all, what I'd say is the world needs
to find ways to reduce submissions in a thoughtful, constructive way,
in a consistent approach. We need to do that while
we're balancing the needs of people around the world to
have affordable energy. And so we call it the end equation.
You got to do both. You can't focus on one
at the exclusion of the other. That's going to require
a global effort. There's no one country that's going to
(07:06):
solve this problem. And so I do think in a
coord that brings together the world community to focus on
this subjective, which I believe is needed, is an important
accord in one that countries should stay in. And I
think the focus out to be not necessarily on pulling
in and out of the agreement, but finding a constructive
way to advance the goals of the agreement without compromising
(07:27):
economic growth, without compromising the growth in people's prosperity all
around the world. And there is the opportunity to do that.
I just don't think we've seen the policy manifest themselves
to achieve it.
Speaker 1 (07:37):
Yet there is also a chance that he doesn't just
pull the US out of the Paris Agreement, that he
pulls the US out of the UN Climate Treaty. Now,
from a presidential perspective, they can't just rejoin a treaty.
So say there's a new president who does care about
climate change, who comes to power after Trump, They'll have
to go to the Senate, And as you know, the
Senate is really divided, and a likelihood of getting a
(07:59):
two thousand majority to join a climate treaty seems very
far fetched right now. So there could be irreversible consequences
of a Donald Trump election. Does that not wor you?
Speaker 2 (08:10):
I We're very focused on what we as a company
can do to contribute to this space. We're not a
political entity, and so I mean I continue to stay
focused on the long term. We serve global markets. We
work all around the world, and that's what we're focused
on doing, is taking our capabilities and contributing. We're doing
work not only in the US, but in Asia, in
Singapore and Indonesia, looking for opportunities to help with that.
(08:31):
And so we'll continue to look for and pursue the
opportunities where there's a need and a desire for us
to contribute.
Speaker 1 (08:38):
So if there's more energy transition opportunities outside of the US,
you already have a global company, you'll pursue those opportunities outside. Yeah,
let's look at the domestic front. We know under Trump
last time around, you saw lower corporate taxes. That means
for corporations, higher profits. He has said he wants to
cut taxes further and that would mean even higher profits
(08:59):
than the last time around. But he's also said he's
going to roll back regulations domestically in the US, and
you've talked about how having that back and forth that
uncertainty is bad for business. But do you think the
higher profits will make up for the regulatory uncertainty that
is coming.
Speaker 2 (09:18):
Yeah, I'm not sure. I would look at profitability and
regulatory uncertainty as a plus and a minus, or a
balancing factor. I actually consider those two very separate things.
I think there is a role for smart regulation, effective regulation.
There's also a role to eliminate unproductive and inefficient regulation,
and so that's a separate category. We're supportive of regulation
(09:41):
for the industry. We think it's important, but we think
it's important to have cost effective, productive regulation that's consistent
to allow business to get businesses a runway to implement
that regulation. I also believe that spurring economic growth is
an important element of not only making the economy more successful,
but then lifting people up and raising their standards are living.
Speaker 1 (10:02):
Can you give some examples of regulations that you think
are ineffective and should go.
Speaker 2 (10:07):
I think you know, what we're looking for is making
sure that the intent of the regulation is clear and
that the regulations are set in such a way that
you achieve that intent at the lowest possible cost, that
it's practical that it can be implemented in the timeframe
that's suggested. But no specific regulations come to mind, any
specific ones now.
Speaker 1 (10:25):
So one thing that may happen is Donald Trump gets
a trifecta. You know, he's won the presidency, he's won
the Senate, Republicans have won the Senate. There is a
likelihood that they get the House as well, and that
gives them a mandate which could in principle allow them
to take actions such as repealing many of the things
that are there under the Inflation Reduction Act. You brought
it up, you said, IRA is something that you're looking
(10:47):
forward to. You're hoping that rules will be settled, the
tax credits for all kinds of climate solutions that you
mentioned earlier. Do you think the repeal of some parts
of the IRA will happen and do you welcome that?
Speaker 2 (10:59):
So let me maybe start with why we think the
IRA makes sense. And if you look around the world
and a lot of the climate policies that are being pursued,
they pick winners and losers, and they choose a technology
and insist that that then gets pursued. The advantage of
the IRA was it focused on outcomes carbon intensity. Our
view was that's if you're going to mandate carbon emissions reductions,
(11:24):
you ought to focus on the outcomes that you're looking for,
put in place the regulations to dictate those outcomes, and
then let companies, individual businesses, the market figure out how
best to meet those outcomes. And that's what the IRA
has done. And so we're supported of the IRA and
that it approached emissions reductions in the right way. And
what it allowed us to do as a company then
(11:46):
is basically draw on all of our resources. So we
are today investing to decarbonize the production of natural gas
in the permium. I can take that decarbonized natural gas.
I can move it down a pipeline system that I
operate that I control the emissions on. I can bring
it into my facility where I operate and control the emissions,
and convert that GOPE wanted to zero methane into hydrogen,
(12:11):
capture the CO two that's released in that conversion, and
store that so that I get a near zero hydrogen source.
And I can do that and then qualify for the
incentives that the IRA has. That's what we like about
the IRA, and frankly, the IRA reflected what the administration
felt like the people of America wanted them to do.
The Trump, as you say, if he gets all three
(12:31):
the two houses in the White House, he has a mandate.
He will then interpret what the people of America want.
And our job is to respond to what work the
people around the world want. We deliver on the needs.
We use our capabilities to help address society's needs. We
don't determine what those needs are.
Speaker 1 (12:46):
But the Inflation Reduction Act you're saying is technology neutral?
Is it so? Because the tax skurits are different for
different technologies. Some tax skrates have much more money than others.
And yes, they are all geared towards reducing emissions, not
just emissions intensity. They are geared towards reducing absolute emissions
(13:07):
because they were geared towards the US being able to
hit its climate goals, which it currently isn't on track,
but the IRE would have start to put it on track.
Speaker 2 (13:16):
So so why I say it's technology agnostic is it's
focused on a carbon intensity for say, hydrogen, a carbon
intensity level right doesn't specify a technology to achieve that level.
There may be an underlying assumption as to what technology
you need in order to reach that. But from my
perspective and what we're advocating for is irrespective of what
(13:38):
technology you use, if you can achieve that level, you
should qualify for the credits. So that makes it technology agnostic.
Speaker 1 (13:45):
So let's take the example of hydrogen, because that's something
that you have worked on quite consistently. So within the IRA,
there's a tax cred called the forty five V tax Credit.
Currently there's a lot of back and forth going around
to figure out what the rules of that tax credit
would be. Most of the rules right now, if they're written,
would prefer that that hydrogen is produced from renewable energy only.
(14:06):
So you take solar and wind power, you put that
into an electrolyzer, you split water, you create hydrogen. You
are arguing that there should be another route allowed to
be counted under those tax credits, which is to take
natural gas, do carbon capture, So do steam methane reformation,
convert that into hydrogen capture the CEO to bury that,
do you think you'll succeed in getting the equivalency between
(14:29):
what is known as green hydrogen coming from renewables and
what is known as blue hydrogen that comes from carbonator.
Speaker 2 (14:33):
Actually, if you look at the legislation, it doesn't specify
a color. Yes, it's the regulations that come from the
legislation that will then specify how that. But the legislation
is very focused on carbon intensity levels. The regulations will
then tell you how you qualify to meet those carbon
intensity levels. And there are ways to do that today
to meet high levels or low levels of carbon intensity,
(14:56):
high tiering within the legislation that doesn't require a color.
And all we're saying is if I decarbonize my natural gas,
I spend billions of dollars to reduce the emissions associated
with production and natural gas, that as a company, I
should get credit for that. And frankly, that's what you
want to do. You want to incentivize our industry to
(15:17):
invest the money to reduce the emissions associated with production
and natural gas. That's what we're doing today, and what
we're advocating for is that that reduction gets reflected when
we're trying to qualify for a credit within the IRA.
If that happens, which is what I think the intent
of the legislation was, then that will justify the investments
that we're making and the investment in the blue hydrogen.
If it doesn't happen and they want to incentivize green
(15:41):
hydrogen and electoralizers, we're not in that business. We won't
make the investments. That's how it'll work.
Speaker 1 (15:46):
It's billed as the world's largest hydrogen plant. How much
is it going to cost if you do get these
tax credits?
Speaker 2 (15:52):
A lot, no number, no number for you. Billions here, here's.
Speaker 1 (15:58):
One way to think about numbers. Right this year, in
the first three quarters, Exon has given shareholders twelve billion
dollars back in dividends, fourteen billion dollars as shareholder buyback.
So you're just buying your own stockback. That's twenty six
billion dollars in the first three quarters. If I calculate
the cost of this hydrogen plant, it's a few billion
(16:19):
dollars two three four billion dollars. You could be doing
that without the tax credits. Why don't you?
Speaker 2 (16:25):
Well, I have a responsibility shareholders, not my money, and
so my job is a business and this is I
think one of the challenges that as you look at
incentivizing all aspects of an economy, we all have different
roles to play. I take shareholders money, and I have
a responsibility to generate a return on that shareholder money,
and so it's critical for me to make sure that
the investments that I'm making generate return for the shareholders.
(16:48):
If I can't do that, if I have more money
than I can productively invest and get a return, I
have a responsibility to return that money to the shareholders
so that they can invest in some other company to
generate a return. So what I'm doing doing is balancing
across the portfolio. I'm frankly building a business and have
a strategy that allows me to be successful. And frankly,
(17:08):
any scenario that you can forecast going forward, if you
want to take the IA net zero a very extreme
decarbonization scenario, if you look at the businesses that we've
established within the company, the core capabilities that we're building
those businesses on. In that scenario, using the assumptions of
the IA, I grow earnings and I grow cash flow.
That's good for my shareholders. I'm responsible for doing that.
(17:31):
You can take the other extreme and say we don't
make any progress with the transition. I'm using the same
core capabilities and I can grow earnings in cash flowd
with my business, and so what you want. What you need,
What the world needs is a transition that companies can
make money in and generate returns on. Otherwise you're not
going to drive the investment that you need. So I
think you know what the world I'd be focused on
(17:52):
is finding ways to profitably manage the transition. Because we
can't afford to give to give that away, governments can
afford to pay that and subsidize it in perpetuity. We've
got to find a market that rewards for decarbonization.
Speaker 1 (18:06):
So take the example of carbon capture, which you talked about.
You said you have seven million tons per anem of
contracted carbon capture facility right.
Speaker 2 (18:15):
Now close to that.
Speaker 1 (18:16):
Yeah, Now that is if you took all your emissions,
which is Scope one, two and three, less than two
percent of your total emissions. If you exclude Scope three,
it's still less than ten percent of your total emissions.
But Exxon has a reputation for getting results, has top
notch engineers, has the resources. You bought Denberry, a company
(18:37):
that has carbon dioxide pipelines and that supports a lot
of your carbon capture business. Are you betting now that
because of your spend on Denbury, that carbon capture is
going to be a viable business without subsidies.
Speaker 2 (18:52):
So I would tell you today, if you look at
the drives to invest in the transition, there aren't any
market forces or incentives to invest, which is why government
policy is either mandating or subsidizing. And that's true across
all the transitions. To go from the system that we
have today to a less carbon intensive systems is going
to require money, and it's going to be more expensive.
(19:13):
And so the trick is to start down that path,
you've got to drive the cost of technology down. And
so I would tell you as we've started this business,
we've leveraged the IRA and the government incentives as a
catalyst to get started while we work on the technologies
to lower the cost. But ultimately this has to transition
away from government subsidies and then to market driven investments,
(19:36):
because ultimately that's what it's going to take to be
successful if you want to roll this out across every
economy around the world.
Speaker 1 (19:43):
But you've done that for other types of hydrocombon technologies.
You've done it for offshore drilling, you've done it for
shale technology where you did not have subsidies, you did
have to take real big risks with the technology, and
the market rewarded us, and the market reported because you executed,
you've made the technology viable. And now if I look
at your per barrel cost of oil over the past
(20:05):
few years, they've been falling as a result of your
investments in a technology. So I understand the theory completely
that if you invest in a technology and you build
projects at scale, you can drive down the cost. But
you've done that so far really well for the hydrocarbon
exploration and extraction technologies. But the set of investments when
(20:27):
it comes to climate solutions is still very small.
Speaker 2 (20:31):
So nobody will pay you for me. And that's the
sad fact today is nobody will pay us for emissions reductions.
I could provide sustainable aviation fuel, but no airline will
sign a contract with me to provide it because it's
more expensive than existing aviation fuel. That's the challenge of
the transition is it's going to be more expensive and
today the market won't bear that additional cost. And so
(20:53):
as a company that has a responsibility to invest and
generate a return, I got to find ways to do
that without market forces that exist today, without the demand
or the customer base. That's willing to pay for it.
That's the challenge in this space.
Speaker 1 (21:07):
And one thing where people could start to pay for
these solutions, And something that you have argued for over
a decade is to have a carbon price, a broad based,
economy wide carbon price. Now, if you look at the
politics of a global broad based carbon price, it doesn't exist.
There is no global government that's going to put a
(21:29):
carbon price at a global level. Even at a national level,
when many countries have tried to put a carbon price,
look at your northern neighbor, Canada, the politics has become
really toxic. So what you do have today is regional
carbon pricing. You know, the European Union has been quite
successful in certain sectors. It has a carbon price. In
the US, you have California, you have some Northeastern states
(21:51):
that have a carbon price. We know that under a
Trump presidency there is going to be very unlikely that
there will be a even conversations about based carbon price
across the US. So what specific regulations will you ask
for now that you can't get a broad based carbon
price in the US.
Speaker 2 (22:10):
We've been advocating differently recognizing the political challenges of a
carbon price or a carbon tax and I would also say,
as we've worked through how that would function globally, it
falls apart because of the reasons that you said that
those prices change as you move around the nation. What
we're now advocating from what we've been talking about is
starting first with establishing a global carbon accounting system. You know,
(22:32):
it's amazing to me today if you think about what
we're trying to do as a planet, as a world,
that we want to reduce emissions, but today we have
no mechanism for accounting for all those missions. And so
step number one is establish a global mechanism for accounting
for carbon so that we know where all the carbon's
being generated. As a chemistry person, you will know that
CO two gets created one time. We ought account for
(22:53):
that so we know where it's coming from. You get
a carbon accounting system in place around the world, you
can then start to calculate what the carbon intensity is
for every aspect of your economy and for all the
products those economies are making. If you have a carbon
intensity for the products that you're making, governments can now
start to specify what the carbon intensity of the products
sold in their markets. Have to be very similar to
(23:14):
how today we sell diesel all around the world, but
we have different desulfurization requirements for the desers, so different
specs for sulfur and diesel as you move around the world.
And so there is an approach today that exists that
we meet day in and day out to meet a
specification for the products that we sell globally. Doesn't require
barriers or trade carbon border or border adjustments or anything
(23:37):
like that. If you want to sell a product in
that market, you have to meet that specification. We could
establish carbon intensity specifications for products in any market, and
if you want to sell a product in that market,
you have to meet that carbon intensity specification.
Speaker 1 (23:49):
But the system you're describing already exists, so which we're
sitting at a cop meeting, which is under the U Entreaty.
Under the Unreaty, every country has to report their annual
greenhouse gas accounting two different greenhouse gases into the UN.
So that exists at a country level. The second thing
that exists, which was created in two thousand and one,
(24:09):
is the Greenhouse Gas Protocol, which is created by not
for profits and by corporations to come up with a voluntary,
rules based system that you report under. So when we
talk about Scope one, two and three direct and indirect
emissions that is under the Greenhouse Gas Protocol. So what
exactly are you trying to reinvent here?
Speaker 2 (24:28):
I'm very familiar with that. I'm not trying to reinvent
anything that's not a carbon accounting system. Because you account
for the carbons. Several times you have people double in
triple counting carbon. That's not an accounting system. It has
to add up to global emissions. You can't have multiple
people counting the same molecules of CO two. You need
to establish where that's coming from in the As you
(24:49):
add up those emissions across different reporters, it should all
add to the same total. You couldn't do that today
with the JHG protocol.
Speaker 1 (24:56):
You can't do it with the GG protocol. But the
UN system does exactly.
Speaker 2 (25:00):
You can't manage at a country level. You can't manage
you need. You need carbon accounting for a product level
so that you can start to understand what the carbon
intensity of the product is. That will then drive different
manufacturers of that product to try to meet these carbon
intendency specifications. That's exactly think about desulfurization of diesel. There's
no country wide desulfurization number. It's done at a product
(25:22):
level so manufacturers can meet those specifications. That does not
exist today.
Speaker 1 (25:27):
So the GREENOSKT protocol, if you ignore Scope three, does
include Scope one and two, which are direct emissions. They
if you only added Scope one and two emissions.
Speaker 2 (25:36):
I will guarantee you that everyone's calculating those things differently.
There's not a consistent standard as you move around the world,
around the countries, or even between businesses. That's the challenge.
That's the difference between sitting at a table like this
and talking about it and running a business like I
have to actually deliver on those things. There is not
a consistent approach. That's what we're advocating for.
Speaker 1 (25:55):
So one thing that axand does really well is be
able to lobby for outcomes you want that would help
support many of the goals that you've stated. Are you
lobbying for new rules and carbon accounting, what are they?
Speaker 2 (26:07):
Well, that's what we're asking xon. Molbill can't create a
global system, but we are talking to governments around the
world to suggest that they form a basis to start
this work to establish a system for accounting for carbon
around the world, establish protocols for how you calculate carbon
intendency for different products, and then each government has the
opportunity to set carbon intensity specifications. We are working to
(26:29):
try to see that idea and then to get governments
around the world to start driving that.
Speaker 1 (26:34):
So one place that might have been happening, and tell
me if that's true, is when the SEC in the
US was working towards reporting rules on Scope one and
two emissions for corporations. Were you engaged in those conversations
when they ask for a request for comment? Did you
send in a request for comment asking for what rules
you do?
Speaker 2 (26:50):
Yeah, we did, And I'd say the SEC is not
the body for establishing carbon accounting system across It's there's
a it's not a gap accounting system. It needs it
needs to be like a gap accounting system where you
have consistent approach. But as you know CO two is
there's a science that sits behind and so the SEC
is not the body to do that. You need a
regulatory body. Well, that's what we've got to establish. This
(27:13):
is a brand new approach that we're trying to establish,
consistent with what we've done in other areas of our products,
but this is one that has to be established today.
There's a transportation organization that does that for water fuels today.
That could be one area, but this is an opportunity
to do it across an entire economy.
Speaker 1 (27:35):
After the break, more of my conversation with x On
CEO Darren Wards. By the way, if you've been enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. It helps other
listeners find the show. So let's come to some of
(27:58):
the other climate solutions that you talked about. You have
said in the past that as exit mobile, the thing
you want to invest in in climate solution space is molecules,
not electrons. Now, when I heard that, and I knew
that I was going to talk to you, I thought,
on this table, there's a chemical engineer and that's me,
(28:19):
and I'm arguing for more renewables, and there's an electrical
engineer that's you, and you're arguing for molecules not electrons.
How did that happen?
Speaker 2 (28:27):
Well, I run a business that's in a molecule business.
That's what happened. I think you know what we when
I first got into this job, a lot of pressure
to move into wind and solar and we looked at that.
I mean, we recognize the need for the world to
carbonize and whether or not we could contribute something in
that space. But if you look at what our core
capabilities are where we have developed competitive advantage. It's not
an electron business.
Speaker 1 (28:48):
Right.
Speaker 2 (28:48):
People think that we're in the energy business because we
supply fuel for energy, but we provide fuel for mobility
for cars. This doesn't put us in the transportation business
or as an automaker. So we're folks Stone what do
we do today? Today? We explore for, and produce and
then manage and transform hydrogen and carbon molecules to a
variety of products that meet the critical needs of society.
(29:10):
That's what we do goes far beyond combustible products. That's
where our strengths are. And so as we looked at
those capabilities, how can we apply that then to this
challenge of reducing emissions and the solutions we've come up
with as our low carbon solutions business.
Speaker 1 (29:24):
And one of those solutions is biofuels in your portfolio,
and your push on biofuels has been quite interesting. You
spend roughly three hundred and fifty million dollars trying to
convert algae into biofuelds. My colleagues worked on a story
where they found that you also spend sixty million dollars
on just TV advertising telling the world that you're working
(29:46):
on it, but now you've wound that down and you're
not investing in it because you don't see that it's
working out as a climate solution. So what are the
lessons from the failure of algae for biofuels that you
will apply to future climate solutions.
Speaker 2 (29:59):
Well, I think you know. The challenge here is when
you're trying to develop breakthrough technologies, you never know whether
or not that's going to be successful. And I think
that's the case for algae. Was we recognized when we
were pursuing that that we had to make some significant
breakthroughs in the productivity of the oil productivity of algae
if we were going to be successful, and we worked
on that for several years to try to make those advances,
(30:21):
But it became very clear as we were working our
way and actually achieving some of the milestones, that we
were not going to get to the level of productivity
that would allow us to effectively scale that technology to
meet this much broader demand out there. And so we
had to come to the conclusion that while this held promise,
it wasn't going to solve the problem, which then had
(30:41):
us pivot to other technology areas. We're now working on
a direct air capture technology that is a huge hill
to climb. There's a huge lot of breakthroughs that we
need there. So we have built a prototype we're working
hard on that. We talk about the work that we're
doing in a direct air capture I can't promise you
today that we will be successful in it, but what
I can promise you is we're committed to trying to
(31:01):
make it successful. And I think that's what you actually want,
is you want companies that have capabilities around the world
to be looking for ways that they can innovate and
drive advancements and technologies to solve this problem. Not all
of them are going to be successful, but the more
companies you have doing that, leveraging their core capabilities, the
better chance we have as a planet of finding a solution.
(31:21):
And so that's what we're working on, and we're continuing
to look for other We've got other technologies that we're
advancing to try to reduce emissions, but they're in the
very early stages, they require technical breakthroughs. Yep, we're working those.
We'll talk about them as we go forward, and hopefully
we'll find some that are successful. But I can't guarantee it.
Speaker 1 (31:40):
But sixty million dollars on TV advertising, surely one of
the lessons might be not to advertise a solution before
it's working well.
Speaker 2 (31:47):
I think it's important for people to know what we're trying.
If you want to limit only talking about the things
that are going to absolutely work, it'll be an awful
quiet world out there. And I think, you know, trying
to make sure that everyone recognizes the need for a
diversified set of solutions and that you've got many companies
around the world working hard to try to find those solutions.
It's important. I would argue, what we haven't done enough
(32:09):
is to help people understand how we are trying to
contribute in this space. And so almost the opposite, I
would suggest we need to do more to help people
understand the work that we're doing to be a meaningful
contributor in this space.
Speaker 1 (32:22):
So if you look at the wider business you're here
at a cop you know that one of the agenda
items that was agreed on at COP twenty eight, which
was being argued on in Day one over here is
how does the world transition away from fossil fuels now.
One of the things that's happened among the oil majors
where Egxon has really pulled ahead of all your peers, Shell, Chevron, BP,
(32:47):
is that Egxon has really increased its production of oil
over the past few years. And that's proven to be
a hugely profitable strategy with two things. One price is
going up, but also your cost of battle of all
going down, and that's made Shell and Chevron envious of
what Exon is doing. There's also risk though, say the
(33:08):
energy transition does speed up at some point, does it
not wory you you might have stranded assets.
Speaker 2 (33:14):
No, because I'd tell you if you look at oil
production around the world, first point to make is it's
a depletion resource. Is a depleting resource. So every barrow
you produces a barrow you don't have. If you look
at the supply of oil today in the market, with
the amount of unconventional oil that's come on out of
the US, that mix has changed pretty dramatically. Unconventional oil
depletes at a much faster rate, and so with zero
(33:36):
investment going into the industry to produce more oil. That
depletion rate is about fifteen percent per year, and that
is an extremely steep decline rate, and so the industry
has to invest significant amount of money just to hold
production flat. And so as you look at the world,
the challenge is maintaining enough production to meet the demand
(33:59):
in the near medium term. And because that depletion curve
will catch up to you very quickly. The energy system
is huge. The transition is going to take time. And
if we make advances in other technologies, if the right
kind of policies come into place to incentivize the transition
and move there faster, depletion will take care of the
resources that are out there today being produced, and investments
(34:21):
should shift then from that portfolio to a portfolio of
the new energy sources of the new transition. That's what
our strategy does. Because we're using the same core capabilities.
I can put my reservoir engineers onto storing co two
looking for Brian water with lithium in it, or for
exploring for oil, and which every one of those businesses
(34:42):
are more successful and grows faster, I shift the resources there,
same with my project's organization. I have that opportunity, that flexibility,
so that I can thrive as a business well into
the future, irrespective of the scenario that we see.
Speaker 1 (34:56):
Earlier, you were talking about investors when we talked about
how much money you've going back to investors this year,
twelve billion dollars in dividends, putteen billion dollars in share buybacks.
You said that investors are smart people. They can do
what they want with that money, right, And you've been
a close watcher of investors even before you became CEO.
You were in the investor relations role at some points
(35:17):
in your career during exone. Now it seems to me
that investors are looking at companies like Exon, not just you,
but the oil majors in general, and they want as
much of the profit as possible extracted. But they also
want you to be very disciplined in what types of
new oil and gas projects you invest in. Is that
(35:39):
a right assessment.
Speaker 2 (35:40):
What investors want is to make sure that you're spending
that money wise and you're going to generate every turn,
and so yes, the way we look at it, discipline
investment means investing only in the projects where you have
an advantage that will be resilient to the down cycles
because these capital intensative commodities. Businesses have price cycles that
we have a high price and you move into low price.
That is a that's they constant in this business. You're
(36:02):
always moving through these cycles, and so the investments that
we make have to be robust to the down cycles.
They have to be advantaged versus the rest of industry.
They have to be capital efficient. That's what discipline investing.
Speaker 1 (36:15):
Is, and it shows up in your capital expenditure. Say
you compare yourself during the twenty tens to the twenty twenties.
You're spending a lot less on your capital expenditure even
as your oil production is higher than it was back then.
Would you say One of the ways in which investors
are thinking about this is that they want not just Egxon,
but oil companies in general to run in a harvest
(36:36):
mode where they draw down the profits and the investors
then invest in the companies they think are building the
climate solutions. And Egxon does the job of a good
corporation of producing the profits that it needs, but maybe
shrinks eventually because the world doesn't need as much fossil fuel.
Speaker 2 (36:51):
Well, I think the facts are counter to that. The
world needs more fossil fuels. If you look at the
demand today, as I mentioned at the beginning, demand for
world today is at record levels. It'll grow going into
next year. And so that's I think the thing you
have to You know, we as a very large company,
represent probably about three percent of the world's oil and
gas supply, and so as a company, we're not going
(37:13):
to dictate how much oil and gas gets used in
the world. In fact, there's no single company that's going
to dictate that. What dictates the amount of oil that
gets used in the world is one what is the
available alternatives that meet the collection of needs, one of
them being affordability, one of them being reliability, one of
them being availability. You've got to have an energy supply
that does That depends on how quickly economies are growing,
(37:36):
it depends on how quickly people's prosperity are living. So
those are the things they are going to drive demand,
and then the challenge for our industry is to meet
that demand and to meet those different criteria, and as
we continue to work for ways to decarbonize and meet
those needs with lower emissions, that's the challenge that we face.
But you can't stop meeting those needs to reduce emissions
(37:57):
because now you basically create more and more human hardship.
This is the challenge that I started this conversation with
is you've got to find a way to do both.
Speaker 1 (38:06):
But if there are no ideologies and there are just incentives.
We talked through how the incentive to reduce emissions will
come from carbon pricing, because that will allow people to
make choices for lower carbon products at a cost that
is the right cost for those products versus the cost
that society bars from climate change. If carbon pricing is
not going to happen, as we've talked about the political
(38:27):
infeasibility of it, I use supportive of just direct regulation
to reduce emissions because something has to cause.
Speaker 2 (38:35):
That's what I'm suggesting when I talk about a carbon
accounting system, a global carbon accounting system, and then a
mechanism for calculating carbon intensity at a product level, and
then a regulation that sets the specification for carbon intensity
for that market, so that every country can set the
carbon intensity specifications for the products sold in that market.
(38:57):
That gets rid of the need for these very inefficient
come or some carbon border adjustments. So yeah, that's what
we're talking about regulation. As I said at the beginning,
is there's a need for smart, efficient, thoughtful regulation. We
think this is an area we could do that and
the world could do that in.
Speaker 1 (39:12):
So one place where regulations have had an impact to
some extent is methane. You set a target to reduce
methane emissions by eighty percent by twenty thirty and you
say you are on track. There's a reduction of sixty
percent as of last year, but why not go further
because your colleagues at the Oil and Gas Climate Initiative
(39:32):
have a zero methane emissions by twenty thirty target.
Speaker 2 (39:35):
That's what we're doing. We're part of that commitment.
Speaker 1 (39:37):
Yeah, yeah, so you want to go beyond the eighty
percent that you've set already.
Speaker 2 (39:41):
So it's a near zero methane what's basically possible is
what the industry is committing to, and we're part of
that commitment and we're that's what we're working our way to.
Speaker 1 (39:50):
Okay, So that because that right now the official target
is eighty percent reduction by you.
Speaker 2 (39:54):
Said by twenty thirty eight, Yes, so when you want
to get nearly at near zero, when we get so
it's an eight percent reduction gets this down to near zero.
Speaker 1 (40:02):
Now, the second elephant in the room that I wanted
to bring up, but we got sidetracked into a lot
of other discussion is one about trust, and it is
worth acknowledging here. A lot of people in this room
will be familiar with Exon's history around so in doubt
on climate science, just load down climate action. At one point,
Exon employed some of the world's best climate scientists. They
(40:25):
predicted very accurately, what would happen if you keep burning
fossil fuels and we are living with those consequences today.
You've said multiple times Exon is a different company today.
But given Exon's history, why should people trust you?
Speaker 2 (40:41):
Now? Yeah, Well, I think what you've described there's you
can debate. I think the facts around that. I think
we had two scientists working thirty or forty years ago.
These are things that happened thirty or forty years ago.
I think what people had to focus on what have
we been doing, what are we committing to do, and
what are we demonstrating that we're doing. And as I
come back to you, if you look at the things
that we're doing today, we're investing more than any other
(41:03):
company across a broader array of solution sets to try
to help economies decarbonize. I think that's what we can
be expected to do, or what should be expected of us,
and I think we're working harder to deliver on that.
But at the end of the day, you've got to
have supportive policy in lieu of a market but ultimately
you got to have market forces.
Speaker 1 (41:24):
But when we talk about those efforts, which you say,
we're thirty forty years ago, now you were at the
company at the time you joined in nineteen ninety two,
Many of these efforts were done in the nineties and
the two thousands. I know you weren't in a role
which made the decisions whether these efforts go forward or not.
But you are in charge of the entire company today,
and the questions I'm asking you are questions that your
(41:47):
predecessors took actions on, and now you're answering those questions.
Twenty years from now, your successors will be answering questions
about the actions you take today. So that will be
a time when climate impacts will be worse. And I'm
saying will because that's a scientific certainty, as exon scientists
(42:07):
have predicted so what are you doing now to protect
your legacy At EGXON.
Speaker 2 (42:12):
We're trying to solve the problem is leveraging the capabilities
that we have as a company. That's what we've been
talking about this whole podcast. I mean, the reality is
there's no one company out there doing more than we're doing.
If you look at the amount of money that we're
investing on an annual basis, the commitments on an average
annual basis, it's a third of what the US EPA
is spending. That's one company doing that. So again, I'm
(42:33):
not claiming that we're going to solve the problem, and
I'm claiming is we're going to use our capabilities to
contribute to solving that problem. I think that's all that
we can ask of ourselves as a company, and that's
what we're doing. Thank you, Dare, thank.
Speaker 1 (42:44):
You, thank you for listening to zero. Now for the
sound of the week, that's the sound of the heaters
(43:06):
keeping us warm in the Bakwu Stadium here at COP
twenty nine. If you like this episode, please take a
moment to rate or review the show on Apple Podcasts
and Spotify. Share this episode with a friend or with
someone who has had a crude oil bar at a SPA.
You can get in touch at zero port at bloomberg
dot net. Zero's producer is Mighty le Rau, Bloomberg's head
(43:28):
of podcast is Sage Bauman, and head of Talk is
Brendan Nunan. Our theme music is composed by Wonder Day
Special thanks to Kevin Crowley, jend De, Louis schwan Wagner,
Aaron Rudkoff, Jessica Beck and Ethan Steinberg. Thanks also to
the Atlantic Council, the International Chamber of Commerce and Uwe
sabiovski I am Akshatrati Band
Welcome to zero. I am Akshatrati. Today Egxon's new tactic.
An oil CEO walks into a climate conference. No, it's
(00:21):
not a joke. Actually, these days it's not even an
uncommon occurrence. But it is still a big deal when
that CEO is Darren Woods, who leads Exonmobile Corporation. Regardless
of where this interiview happened, I would have jumped on
the opportunity. Far too few oil CEOs opened themselves up
(00:41):
to journalistic scrutiny. That it was at a climate conference
in Baku, Azerbaijan only made it more interesting. And this
was not Darren's first rodeo. He became the first Exon
CEO ever to attend a climate conference at COP twenty
eight in Dubai last year. When we spoke, it was
only days since the US election result had come out,
(01:03):
and Darren had things to say about Donald Trump that
I wasn't expecting. He also had strong ideas about how
Eggxon can be a positive force on climate. Now that
might seem odd. It is among the world's largest oil
companies and it has increased oil production quite a lot
over the last few years. There is also a well
(01:25):
documented history of companies like Eggxon showing doubt about climate
science to slow down climate action. But something has clearly
changed and it's worth hearing Darren's take. Welcome everybody to
(01:54):
a live taping of the Zero Podcast at COP twenty nine,
and welcome to the show, Darren.
Speaker 2 (01:59):
Thank you. It's good to be so here.
Speaker 1 (02:01):
We are in Baku, And before I get to important questions,
let me ask you what are you doing for fun?
While you're in od Zerbaijan. People keep recommending to me
that I should take a bath in crude oil. It's
a thing that a famous spa offers over here, and
I fact checked it and it's real.
Speaker 2 (02:19):
I'm not doing that. I got in last night and
I'm spending the day here talking to a number of
people trying to share ex Molble's perspective on how we
can contribute to this challenge that we're all discussing this week.
Speaker 1 (02:31):
So let's get to business. Then, many people here will
see Eggxon as a barrier to tackling climate change. But
you're here at a cop. You're here at a cop
for the second time, so you clearly don't think so
why do you come to a cop?
Speaker 2 (02:45):
Well, I think one of the things that's been happening
over the last several years is the challenge of significantly
reducing emissions while continuing to meet the growing demand for
affordable energy is a tough challenge to solve. I think
the paulice that have been pursued to date are very
narrowly focused on limiting the supply of traditional sources and
(03:06):
trying to drive more expensive alternatives. That frankly isn't accomplishing
the overall objective. If you look at where we stand today,
oil is that record levels of demand a coal, gasoline, diesel,
and so I think while wind and solar, elected vehicles
are going to play a very important role, they're necessary,
they're not sufficient. We need more solutions. Frankly, as a company,
(03:28):
we think we can bring those solutions to bear. If
you look at what we're doing today, we have the
only large scale carbon caption storage system in the world.
We've got five customers with almost seven million tons per
am of contracted storage for CO two. No other company
in the world has that. We're developing the world's largest
(03:49):
virtually carbon free hydrogen facility in the US. We've got
plans to build that if the IRA legislation gets translated
into regulation. We're developing a new technique for producing lithium
to supply battery markets. We're doing work on carbon and
we have an opportunity to build a new type of
anode for batteries which have the potential to increase battery
(04:11):
capacity by thirty percent. And so a lot of things
we're doing across the very broad spectrum of opportunities, leveraging
our core capabilities to try to help reduce the world's emissions.
Speaker 1 (04:21):
But COP is mainly about countries negotiating over I will
say laborious text because I've seen some of that text.
What conversation do you have as a corporate CEO here
at COP that are beneficial to you as a company.
Speaker 2 (04:35):
Well, I think it's trying to make sure we have
a good understanding of where people are, what their concerns are,
where they're focused at. You know, there are a lot
of ambitions and aspirations that come out of the COP discussions.
We're very focused on the action and how do you
go from ambition to plan. So we're trying to help
provide a perspective from a company in an industry that
has a very long history of taking ambitious plans or
(04:58):
ambitious objectives in trans leading those into real war plans
and ultimately putting steel in the ground and building facilities
to accomplish them.
Speaker 1 (05:06):
So we are going to unpack a lot of the
solutions you've talked about, but before we dive deeper into that,
I think it's worth addressing too elephants in this room,
Trump and Trust. Let's start with Trump. Do you think
Donald Trump, he's going to be in his second presidential
term in the US in January, do you think Donald
(05:27):
Trump is a threat to global climate action?
Speaker 2 (05:30):
I think you know, if you look at the time
scale it's going to be required to address this challenge,
and the way that we think about it is a
long term investment. There's work that has to be done,
and so I'm not sure that any one administration is
going to significantly advance the pace of the transition or conversely,
significantly slow the pace. I think there's a lot of
(05:52):
work that needs to be done across the world, a
lot of sectors that need to be advancing the work
in this space. Frankly, we need more comprehensive policy, things
that encourage and tap into the capabilities of companies and
markets to reduce submissions. We're leaving a lot of opportunity
on the table today as a global society, as governments
around the world, there's a lot of work to be
(06:12):
done here. I don't think we're depending on anyone administration
or anyone country, frankly, to advance the global objectives.
Speaker 1 (06:18):
So even as the president of the largest economy in
the world, the second largest emitter, if it's a four
year term, you're not that worried, But you do want
to see policies. And we know that Trump pulled the
US out of the Powis Agreement the first time around.
He has said that he will do so again. You
have said that you would see that as a mistake.
(06:41):
Trump pulling the US out of the Powis Agreement will
be a mistake. Why would it be a mistake.
Speaker 2 (06:46):
First of all, what I'd say is the world needs
to find ways to reduce submissions in a thoughtful, constructive way,
in a consistent approach. We need to do that while
we're balancing the needs of people around the world to
have affordable energy. And so we call it the end equation.
You got to do both. You can't focus on one
at the exclusion of the other. That's going to require
a global effort. There's no one country that's going to
(07:06):
solve this problem. And so I do think in a
coord that brings together the world community to focus on
this subjective, which I believe is needed, is an important
accord in one that countries should stay in. And I
think the focus out to be not necessarily on pulling
in and out of the agreement, but finding a constructive
way to advance the goals of the agreement without compromising
(07:27):
economic growth, without compromising the growth in people's prosperity all
around the world. And there is the opportunity to do that.
I just don't think we've seen the policy manifest themselves
to achieve it.
Speaker 1 (07:37):
Yet there is also a chance that he doesn't just
pull the US out of the Paris Agreement, that he
pulls the US out of the UN Climate Treaty. Now,
from a presidential perspective, they can't just rejoin a treaty.
So say there's a new president who does care about
climate change, who comes to power after Trump, They'll have
to go to the Senate, And as you know, the
Senate is really divided, and a likelihood of getting a
(07:59):
two thousand majority to join a climate treaty seems very
far fetched right now. So there could be irreversible consequences
of a Donald Trump election. Does that not wor you?
Speaker 2 (08:10):
I We're very focused on what we as a company
can do to contribute to this space. We're not a
political entity, and so I mean I continue to stay
focused on the long term. We serve global markets. We
work all around the world, and that's what we're focused
on doing, is taking our capabilities and contributing. We're doing
work not only in the US, but in Asia, in
Singapore and Indonesia, looking for opportunities to help with that.
(08:31):
And so we'll continue to look for and pursue the
opportunities where there's a need and a desire for us
to contribute.
Speaker 1 (08:38):
So if there's more energy transition opportunities outside of the US,
you already have a global company, you'll pursue those opportunities outside. Yeah,
let's look at the domestic front. We know under Trump
last time around, you saw lower corporate taxes. That means
for corporations, higher profits. He has said he wants to
cut taxes further and that would mean even higher profits
(08:59):
than the last time around. But he's also said he's
going to roll back regulations domestically in the US, and
you've talked about how having that back and forth that
uncertainty is bad for business. But do you think the
higher profits will make up for the regulatory uncertainty that
is coming.
Speaker 2 (09:18):
Yeah, I'm not sure. I would look at profitability and
regulatory uncertainty as a plus and a minus, or a
balancing factor. I actually consider those two very separate things.
I think there is a role for smart regulation, effective regulation.
There's also a role to eliminate unproductive and inefficient regulation,
and so that's a separate category. We're supportive of regulation
(09:41):
for the industry. We think it's important, but we think
it's important to have cost effective, productive regulation that's consistent
to allow business to get businesses a runway to implement
that regulation. I also believe that spurring economic growth is
an important element of not only making the economy more successful,
but then lifting people up and raising their standards are living.
Speaker 1 (10:02):
Can you give some examples of regulations that you think
are ineffective and should go.
Speaker 2 (10:07):
I think you know, what we're looking for is making
sure that the intent of the regulation is clear and
that the regulations are set in such a way that
you achieve that intent at the lowest possible cost, that
it's practical that it can be implemented in the timeframe
that's suggested. But no specific regulations come to mind, any
specific ones now.
Speaker 1 (10:25):
So one thing that may happen is Donald Trump gets
a trifecta. You know, he's won the presidency, he's won
the Senate, Republicans have won the Senate. There is a
likelihood that they get the House as well, and that
gives them a mandate which could in principle allow them
to take actions such as repealing many of the things
that are there under the Inflation Reduction Act. You brought
it up, you said, IRA is something that you're looking
(10:47):
forward to. You're hoping that rules will be settled, the
tax credits for all kinds of climate solutions that you
mentioned earlier. Do you think the repeal of some parts
of the IRA will happen and do you welcome that?
Speaker 2 (10:59):
So let me maybe start with why we think the
IRA makes sense. And if you look around the world
and a lot of the climate policies that are being pursued,
they pick winners and losers, and they choose a technology
and insist that that then gets pursued. The advantage of
the IRA was it focused on outcomes carbon intensity. Our
view was that's if you're going to mandate carbon emissions reductions,
(11:24):
you ought to focus on the outcomes that you're looking for,
put in place the regulations to dictate those outcomes, and
then let companies, individual businesses, the market figure out how
best to meet those outcomes. And that's what the IRA
has done. And so we're supported of the IRA and
that it approached emissions reductions in the right way. And
what it allowed us to do as a company then
(11:46):
is basically draw on all of our resources. So we
are today investing to decarbonize the production of natural gas
in the permium. I can take that decarbonized natural gas.
I can move it down a pipeline system that I
operate that I control the emissions on. I can bring
it into my facility where I operate and control the emissions,
and convert that GOPE wanted to zero methane into hydrogen,
(12:11):
capture the CO two that's released in that conversion, and
store that so that I get a near zero hydrogen source.
And I can do that and then qualify for the
incentives that the IRA has. That's what we like about
the IRA, and frankly, the IRA reflected what the administration
felt like the people of America wanted them to do.
The Trump, as you say, if he gets all three
(12:31):
the two houses in the White House, he has a mandate.
He will then interpret what the people of America want.
And our job is to respond to what work the
people around the world want. We deliver on the needs.
We use our capabilities to help address society's needs. We
don't determine what those needs are.
Speaker 1 (12:46):
But the Inflation Reduction Act you're saying is technology neutral?
Is it so? Because the tax skurits are different for
different technologies. Some tax skrates have much more money than others.
And yes, they are all geared towards reducing emissions, not
just emissions intensity. They are geared towards reducing absolute emissions
(13:07):
because they were geared towards the US being able to
hit its climate goals, which it currently isn't on track,
but the IRE would have start to put it on track.
Speaker 2 (13:16):
So so why I say it's technology agnostic is it's
focused on a carbon intensity for say, hydrogen, a carbon
intensity level right doesn't specify a technology to achieve that level.
There may be an underlying assumption as to what technology
you need in order to reach that. But from my
perspective and what we're advocating for is irrespective of what
(13:38):
technology you use, if you can achieve that level, you
should qualify for the credits. So that makes it technology agnostic.
Speaker 1 (13:45):
So let's take the example of hydrogen, because that's something
that you have worked on quite consistently. So within the IRA,
there's a tax cred called the forty five V tax Credit.
Currently there's a lot of back and forth going around
to figure out what the rules of that tax credit
would be. Most of the rules right now, if they're written,
would prefer that that hydrogen is produced from renewable energy only.
(14:06):
So you take solar and wind power, you put that
into an electrolyzer, you split water, you create hydrogen. You
are arguing that there should be another route allowed to
be counted under those tax credits, which is to take
natural gas, do carbon capture, So do steam methane reformation,
convert that into hydrogen capture the CEO to bury that,
do you think you'll succeed in getting the equivalency between
(14:29):
what is known as green hydrogen coming from renewables and
what is known as blue hydrogen that comes from carbonator.
Speaker 2 (14:33):
Actually, if you look at the legislation, it doesn't specify
a color. Yes, it's the regulations that come from the
legislation that will then specify how that. But the legislation
is very focused on carbon intensity levels. The regulations will
then tell you how you qualify to meet those carbon
intensity levels. And there are ways to do that today
to meet high levels or low levels of carbon intensity,
(14:56):
high tiering within the legislation that doesn't require a color.
And all we're saying is if I decarbonize my natural gas,
I spend billions of dollars to reduce the emissions associated
with production and natural gas, that as a company, I
should get credit for that. And frankly, that's what you
want to do. You want to incentivize our industry to
(15:17):
invest the money to reduce the emissions associated with production
and natural gas. That's what we're doing today, and what
we're advocating for is that that reduction gets reflected when
we're trying to qualify for a credit within the IRA.
If that happens, which is what I think the intent
of the legislation was, then that will justify the investments
that we're making and the investment in the blue hydrogen.
If it doesn't happen and they want to incentivize green
(15:41):
hydrogen and electoralizers, we're not in that business. We won't
make the investments. That's how it'll work.
Speaker 1 (15:46):
It's billed as the world's largest hydrogen plant. How much
is it going to cost if you do get these
tax credits?
Speaker 2 (15:52):
A lot, no number, no number for you. Billions here, here's.
Speaker 1 (15:58):
One way to think about numbers. Right this year, in
the first three quarters, Exon has given shareholders twelve billion
dollars back in dividends, fourteen billion dollars as shareholder buyback.
So you're just buying your own stockback. That's twenty six
billion dollars in the first three quarters. If I calculate
the cost of this hydrogen plant, it's a few billion
(16:19):
dollars two three four billion dollars. You could be doing
that without the tax credits. Why don't you?
Speaker 2 (16:25):
Well, I have a responsibility shareholders, not my money, and
so my job is a business and this is I
think one of the challenges that as you look at
incentivizing all aspects of an economy, we all have different
roles to play. I take shareholders money, and I have
a responsibility to generate a return on that shareholder money,
and so it's critical for me to make sure that
the investments that I'm making generate return for the shareholders.
(16:48):
If I can't do that, if I have more money
than I can productively invest and get a return, I
have a responsibility to return that money to the shareholders
so that they can invest in some other company to
generate a return. So what I'm doing doing is balancing
across the portfolio. I'm frankly building a business and have
a strategy that allows me to be successful. And frankly,
(17:08):
any scenario that you can forecast going forward, if you
want to take the IA net zero a very extreme
decarbonization scenario, if you look at the businesses that we've
established within the company, the core capabilities that we're building
those businesses on. In that scenario, using the assumptions of
the IA, I grow earnings and I grow cash flow.
That's good for my shareholders. I'm responsible for doing that.
(17:31):
You can take the other extreme and say we don't
make any progress with the transition. I'm using the same
core capabilities and I can grow earnings in cash flowd
with my business, and so what you want. What you need,
What the world needs is a transition that companies can
make money in and generate returns on. Otherwise you're not
going to drive the investment that you need. So I
think you know what the world I'd be focused on
(17:52):
is finding ways to profitably manage the transition. Because we
can't afford to give to give that away, governments can
afford to pay that and subsidize it in perpetuity. We've
got to find a market that rewards for decarbonization.
Speaker 1 (18:06):
So take the example of carbon capture, which you talked about.
You said you have seven million tons per anem of
contracted carbon capture facility right.
Speaker 2 (18:15):
Now close to that.
Speaker 1 (18:16):
Yeah, Now that is if you took all your emissions,
which is Scope one, two and three, less than two
percent of your total emissions. If you exclude Scope three,
it's still less than ten percent of your total emissions.
But Exxon has a reputation for getting results, has top
notch engineers, has the resources. You bought Denberry, a company
(18:37):
that has carbon dioxide pipelines and that supports a lot
of your carbon capture business. Are you betting now that
because of your spend on Denbury, that carbon capture is
going to be a viable business without subsidies.
Speaker 2 (18:52):
So I would tell you today, if you look at
the drives to invest in the transition, there aren't any
market forces or incentives to invest, which is why government
policy is either mandating or subsidizing. And that's true across
all the transitions. To go from the system that we
have today to a less carbon intensive systems is going
to require money, and it's going to be more expensive.
(19:13):
And so the trick is to start down that path,
you've got to drive the cost of technology down. And
so I would tell you as we've started this business,
we've leveraged the IRA and the government incentives as a
catalyst to get started while we work on the technologies
to lower the cost. But ultimately this has to transition
away from government subsidies and then to market driven investments,
(19:36):
because ultimately that's what it's going to take to be
successful if you want to roll this out across every
economy around the world.
Speaker 1 (19:43):
But you've done that for other types of hydrocombon technologies.
You've done it for offshore drilling, you've done it for
shale technology where you did not have subsidies, you did
have to take real big risks with the technology, and
the market rewarded us, and the market reported because you executed,
you've made the technology viable. And now if I look
at your per barrel cost of oil over the past
(20:05):
few years, they've been falling as a result of your
investments in a technology. So I understand the theory completely
that if you invest in a technology and you build
projects at scale, you can drive down the cost. But
you've done that so far really well for the hydrocarbon
exploration and extraction technologies. But the set of investments when
(20:27):
it comes to climate solutions is still very small.
Speaker 2 (20:31):
So nobody will pay you for me. And that's the
sad fact today is nobody will pay us for emissions reductions.
I could provide sustainable aviation fuel, but no airline will
sign a contract with me to provide it because it's
more expensive than existing aviation fuel. That's the challenge of
the transition is it's going to be more expensive and
today the market won't bear that additional cost. And so
(20:53):
as a company that has a responsibility to invest and
generate a return, I got to find ways to do
that without market forces that exist today, without the demand
or the customer base. That's willing to pay for it.
That's the challenge in this space.
Speaker 1 (21:07):
And one thing where people could start to pay for
these solutions, And something that you have argued for over
a decade is to have a carbon price, a broad based,
economy wide carbon price. Now, if you look at the
politics of a global broad based carbon price, it doesn't exist.
There is no global government that's going to put a
(21:29):
carbon price at a global level. Even at a national level,
when many countries have tried to put a carbon price,
look at your northern neighbor, Canada, the politics has become
really toxic. So what you do have today is regional
carbon pricing. You know, the European Union has been quite
successful in certain sectors. It has a carbon price. In
the US, you have California, you have some Northeastern states
(21:51):
that have a carbon price. We know that under a
Trump presidency there is going to be very unlikely that
there will be a even conversations about based carbon price
across the US. So what specific regulations will you ask
for now that you can't get a broad based carbon
price in the US.
Speaker 2 (22:10):
We've been advocating differently recognizing the political challenges of a
carbon price or a carbon tax and I would also say,
as we've worked through how that would function globally, it
falls apart because of the reasons that you said that
those prices change as you move around the nation. What
we're now advocating from what we've been talking about is
starting first with establishing a global carbon accounting system. You know,
(22:32):
it's amazing to me today if you think about what
we're trying to do as a planet, as a world,
that we want to reduce emissions, but today we have
no mechanism for accounting for all those missions. And so
step number one is establish a global mechanism for accounting
for carbon so that we know where all the carbon's
being generated. As a chemistry person, you will know that
CO two gets created one time. We ought account for
(22:53):
that so we know where it's coming from. You get
a carbon accounting system in place around the world, you
can then start to calculate what the carbon intensity is
for every aspect of your economy and for all the
products those economies are making. If you have a carbon
intensity for the products that you're making, governments can now
start to specify what the carbon intensity of the products
sold in their markets. Have to be very similar to
(23:14):
how today we sell diesel all around the world, but
we have different desulfurization requirements for the desers, so different
specs for sulfur and diesel as you move around the world.
And so there is an approach today that exists that
we meet day in and day out to meet a
specification for the products that we sell globally. Doesn't require
barriers or trade carbon border or border adjustments or anything
(23:37):
like that. If you want to sell a product in
that market, you have to meet that specification. We could
establish carbon intensity specifications for products in any market, and
if you want to sell a product in that market,
you have to meet that carbon intensity specification.
Speaker 1 (23:49):
But the system you're describing already exists, so which we're
sitting at a cop meeting, which is under the U Entreaty.
Under the Unreaty, every country has to report their annual
greenhouse gas accounting two different greenhouse gases into the UN.
So that exists at a country level. The second thing
that exists, which was created in two thousand and one,
(24:09):
is the Greenhouse Gas Protocol, which is created by not
for profits and by corporations to come up with a voluntary,
rules based system that you report under. So when we
talk about Scope one, two and three direct and indirect
emissions that is under the Greenhouse Gas Protocol. So what
exactly are you trying to reinvent here?
Speaker 2 (24:28):
I'm very familiar with that. I'm not trying to reinvent
anything that's not a carbon accounting system. Because you account
for the carbons. Several times you have people double in
triple counting carbon. That's not an accounting system. It has
to add up to global emissions. You can't have multiple
people counting the same molecules of CO two. You need
to establish where that's coming from in the As you
(24:49):
add up those emissions across different reporters, it should all
add to the same total. You couldn't do that today
with the JHG protocol.
Speaker 1 (24:56):
You can't do it with the GG protocol. But the
UN system does exactly.
Speaker 2 (25:00):
You can't manage at a country level. You can't manage
you need. You need carbon accounting for a product level
so that you can start to understand what the carbon
intensity of the product is. That will then drive different
manufacturers of that product to try to meet these carbon
intendency specifications. That's exactly think about desulfurization of diesel. There's
no country wide desulfurization number. It's done at a product
(25:22):
level so manufacturers can meet those specifications. That does not
exist today.
Speaker 1 (25:27):
So the GREENOSKT protocol, if you ignore Scope three, does
include Scope one and two, which are direct emissions. They
if you only added Scope one and two emissions.
Speaker 2 (25:36):
I will guarantee you that everyone's calculating those things differently.
There's not a consistent standard as you move around the world,
around the countries, or even between businesses. That's the challenge.
That's the difference between sitting at a table like this
and talking about it and running a business like I
have to actually deliver on those things. There is not
a consistent approach. That's what we're advocating for.
Speaker 1 (25:55):
So one thing that axand does really well is be
able to lobby for outcomes you want that would help
support many of the goals that you've stated. Are you
lobbying for new rules and carbon accounting, what are they?
Speaker 2 (26:07):
Well, that's what we're asking xon. Molbill can't create a
global system, but we are talking to governments around the
world to suggest that they form a basis to start
this work to establish a system for accounting for carbon
around the world, establish protocols for how you calculate carbon
intendency for different products, and then each government has the
opportunity to set carbon intensity specifications. We are working to
(26:29):
try to see that idea and then to get governments
around the world to start driving that.
Speaker 1 (26:34):
So one place that might have been happening, and tell
me if that's true, is when the SEC in the
US was working towards reporting rules on Scope one and
two emissions for corporations. Were you engaged in those conversations
when they ask for a request for comment? Did you
send in a request for comment asking for what rules
you do?
Speaker 2 (26:50):
Yeah, we did, And I'd say the SEC is not
the body for establishing carbon accounting system across It's there's
a it's not a gap accounting system. It needs it
needs to be like a gap accounting system where you
have consistent approach. But as you know CO two is
there's a science that sits behind and so the SEC
is not the body to do that. You need a
regulatory body. Well, that's what we've got to establish. This
(27:13):
is a brand new approach that we're trying to establish,
consistent with what we've done in other areas of our products,
but this is one that has to be established today.
There's a transportation organization that does that for water fuels today.
That could be one area, but this is an opportunity
to do it across an entire economy.
Speaker 1 (27:35):
After the break, more of my conversation with x On
CEO Darren Wards. By the way, if you've been enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. It helps other
listeners find the show. So let's come to some of
(27:58):
the other climate solutions that you talked about. You have
said in the past that as exit mobile, the thing
you want to invest in in climate solution space is molecules,
not electrons. Now, when I heard that, and I knew
that I was going to talk to you, I thought,
on this table, there's a chemical engineer and that's me,
(28:19):
and I'm arguing for more renewables, and there's an electrical
engineer that's you, and you're arguing for molecules not electrons.
How did that happen?
Speaker 2 (28:27):
Well, I run a business that's in a molecule business.
That's what happened. I think you know what we when
I first got into this job, a lot of pressure
to move into wind and solar and we looked at that.
I mean, we recognize the need for the world to
carbonize and whether or not we could contribute something in
that space. But if you look at what our core
capabilities are where we have developed competitive advantage. It's not
an electron business.
Speaker 1 (28:48):
Right.
Speaker 2 (28:48):
People think that we're in the energy business because we
supply fuel for energy, but we provide fuel for mobility
for cars. This doesn't put us in the transportation business
or as an automaker. So we're folks Stone what do
we do today? Today? We explore for, and produce and
then manage and transform hydrogen and carbon molecules to a
variety of products that meet the critical needs of society.
(29:10):
That's what we do goes far beyond combustible products. That's
where our strengths are. And so as we looked at
those capabilities, how can we apply that then to this
challenge of reducing emissions and the solutions we've come up
with as our low carbon solutions business.
Speaker 1 (29:24):
And one of those solutions is biofuels in your portfolio,
and your push on biofuels has been quite interesting. You
spend roughly three hundred and fifty million dollars trying to
convert algae into biofuelds. My colleagues worked on a story
where they found that you also spend sixty million dollars
on just TV advertising telling the world that you're working
(29:46):
on it, but now you've wound that down and you're
not investing in it because you don't see that it's
working out as a climate solution. So what are the
lessons from the failure of algae for biofuels that you
will apply to future climate solutions.
Speaker 2 (29:59):
Well, I think you know. The challenge here is when
you're trying to develop breakthrough technologies, you never know whether
or not that's going to be successful. And I think
that's the case for algae. Was we recognized when we
were pursuing that that we had to make some significant
breakthroughs in the productivity of the oil productivity of algae
if we were going to be successful, and we worked
on that for several years to try to make those advances,
(30:21):
But it became very clear as we were working our
way and actually achieving some of the milestones, that we
were not going to get to the level of productivity
that would allow us to effectively scale that technology to
meet this much broader demand out there. And so we
had to come to the conclusion that while this held promise,
it wasn't going to solve the problem, which then had
(30:41):
us pivot to other technology areas. We're now working on
a direct air capture technology that is a huge hill
to climb. There's a huge lot of breakthroughs that we
need there. So we have built a prototype we're working
hard on that. We talk about the work that we're
doing in a direct air capture I can't promise you
today that we will be successful in it, but what
I can promise you is we're committed to trying to
(31:01):
make it successful. And I think that's what you actually want,
is you want companies that have capabilities around the world
to be looking for ways that they can innovate and
drive advancements and technologies to solve this problem. Not all
of them are going to be successful, but the more
companies you have doing that, leveraging their core capabilities, the
better chance we have as a planet of finding a solution.
(31:21):
And so that's what we're working on, and we're continuing
to look for other We've got other technologies that we're
advancing to try to reduce emissions, but they're in the
very early stages, they require technical breakthroughs. Yep, we're working those.
We'll talk about them as we go forward, and hopefully
we'll find some that are successful. But I can't guarantee it.
Speaker 1 (31:40):
But sixty million dollars on TV advertising, surely one of
the lessons might be not to advertise a solution before
it's working well.
Speaker 2 (31:47):
I think it's important for people to know what we're trying.
If you want to limit only talking about the things
that are going to absolutely work, it'll be an awful
quiet world out there. And I think, you know, trying
to make sure that everyone recognizes the need for a
diversified set of solutions and that you've got many companies
around the world working hard to try to find those solutions.
It's important. I would argue, what we haven't done enough
(32:09):
is to help people understand how we are trying to
contribute in this space. And so almost the opposite, I
would suggest we need to do more to help people
understand the work that we're doing to be a meaningful
contributor in this space.
Speaker 1 (32:22):
So if you look at the wider business you're here
at a cop you know that one of the agenda
items that was agreed on at COP twenty eight, which
was being argued on in Day one over here is
how does the world transition away from fossil fuels now.
One of the things that's happened among the oil majors
where Egxon has really pulled ahead of all your peers, Shell, Chevron, BP,
(32:47):
is that Egxon has really increased its production of oil
over the past few years. And that's proven to be
a hugely profitable strategy with two things. One price is
going up, but also your cost of battle of all
going down, and that's made Shell and Chevron envious of
what Exon is doing. There's also risk though, say the
(33:08):
energy transition does speed up at some point, does it
not wory you you might have stranded assets.
Speaker 2 (33:14):
No, because I'd tell you if you look at oil
production around the world, first point to make is it's
a depletion resource. Is a depleting resource. So every barrow
you produces a barrow you don't have. If you look
at the supply of oil today in the market, with
the amount of unconventional oil that's come on out of
the US, that mix has changed pretty dramatically. Unconventional oil
depletes at a much faster rate, and so with zero
(33:36):
investment going into the industry to produce more oil. That
depletion rate is about fifteen percent per year, and that
is an extremely steep decline rate, and so the industry
has to invest significant amount of money just to hold
production flat. And so as you look at the world,
the challenge is maintaining enough production to meet the demand
(33:59):
in the near medium term. And because that depletion curve
will catch up to you very quickly. The energy system
is huge. The transition is going to take time. And
if we make advances in other technologies, if the right
kind of policies come into place to incentivize the transition
and move there faster, depletion will take care of the
resources that are out there today being produced, and investments
(34:21):
should shift then from that portfolio to a portfolio of
the new energy sources of the new transition. That's what
our strategy does. Because we're using the same core capabilities.
I can put my reservoir engineers onto storing co two
looking for Brian water with lithium in it, or for
exploring for oil, and which every one of those businesses
(34:42):
are more successful and grows faster, I shift the resources there,
same with my project's organization. I have that opportunity, that flexibility,
so that I can thrive as a business well into
the future, irrespective of the scenario that we see.
Speaker 1 (34:56):
Earlier, you were talking about investors when we talked about
how much money you've going back to investors this year,
twelve billion dollars in dividends, putteen billion dollars in share buybacks.
You said that investors are smart people. They can do
what they want with that money, right, And you've been
a close watcher of investors even before you became CEO.
You were in the investor relations role at some points
(35:17):
in your career during exone. Now it seems to me
that investors are looking at companies like Exon, not just you,
but the oil majors in general, and they want as
much of the profit as possible extracted. But they also
want you to be very disciplined in what types of
new oil and gas projects you invest in. Is that
(35:39):
a right assessment.
Speaker 2 (35:40):
What investors want is to make sure that you're spending
that money wise and you're going to generate every turn,
and so yes, the way we look at it, discipline
investment means investing only in the projects where you have
an advantage that will be resilient to the down cycles
because these capital intensative commodities. Businesses have price cycles that
we have a high price and you move into low price.
That is a that's they constant in this business. You're
(36:02):
always moving through these cycles, and so the investments that
we make have to be robust to the down cycles.
They have to be advantaged versus the rest of industry.
They have to be capital efficient. That's what discipline investing.
Speaker 1 (36:15):
Is, and it shows up in your capital expenditure. Say
you compare yourself during the twenty tens to the twenty twenties.
You're spending a lot less on your capital expenditure even
as your oil production is higher than it was back then.
Would you say One of the ways in which investors
are thinking about this is that they want not just Egxon,
but oil companies in general to run in a harvest
(36:36):
mode where they draw down the profits and the investors
then invest in the companies they think are building the
climate solutions. And Egxon does the job of a good
corporation of producing the profits that it needs, but maybe
shrinks eventually because the world doesn't need as much fossil fuel.
Speaker 2 (36:51):
Well, I think the facts are counter to that. The
world needs more fossil fuels. If you look at the
demand today, as I mentioned at the beginning, demand for
world today is at record levels. It'll grow going into
next year. And so that's I think the thing you
have to You know, we as a very large company,
represent probably about three percent of the world's oil and
gas supply, and so as a company, we're not going
(37:13):
to dictate how much oil and gas gets used in
the world. In fact, there's no single company that's going
to dictate that. What dictates the amount of oil that
gets used in the world is one what is the
available alternatives that meet the collection of needs, one of
them being affordability, one of them being reliability, one of
them being availability. You've got to have an energy supply
that does That depends on how quickly economies are growing,
(37:36):
it depends on how quickly people's prosperity are living. So
those are the things they are going to drive demand,
and then the challenge for our industry is to meet
that demand and to meet those different criteria, and as
we continue to work for ways to decarbonize and meet
those needs with lower emissions, that's the challenge that we face.
But you can't stop meeting those needs to reduce emissions
(37:57):
because now you basically create more and more human hardship.
This is the challenge that I started this conversation with
is you've got to find a way to do both.
Speaker 1 (38:06):
But if there are no ideologies and there are just incentives.
We talked through how the incentive to reduce emissions will
come from carbon pricing, because that will allow people to
make choices for lower carbon products at a cost that
is the right cost for those products versus the cost
that society bars from climate change. If carbon pricing is
not going to happen, as we've talked about the political
(38:27):
infeasibility of it, I use supportive of just direct regulation
to reduce emissions because something has to cause.
Speaker 2 (38:35):
That's what I'm suggesting when I talk about a carbon
accounting system, a global carbon accounting system, and then a
mechanism for calculating carbon intensity at a product level, and
then a regulation that sets the specification for carbon intensity
for that market, so that every country can set the
carbon intensity specifications for the products sold in that market.
(38:57):
That gets rid of the need for these very inefficient
come or some carbon border adjustments. So yeah, that's what
we're talking about regulation. As I said at the beginning,
is there's a need for smart, efficient, thoughtful regulation. We
think this is an area we could do that and
the world could do that in.
Speaker 1 (39:12):
So one place where regulations have had an impact to
some extent is methane. You set a target to reduce
methane emissions by eighty percent by twenty thirty and you
say you are on track. There's a reduction of sixty
percent as of last year, but why not go further
because your colleagues at the Oil and Gas Climate Initiative
(39:32):
have a zero methane emissions by twenty thirty target.
Speaker 2 (39:35):
That's what we're doing. We're part of that commitment.
Speaker 1 (39:37):
Yeah, yeah, so you want to go beyond the eighty
percent that you've set already.
Speaker 2 (39:41):
So it's a near zero methane what's basically possible is
what the industry is committing to, and we're part of
that commitment and we're that's what we're working our way to.
Speaker 1 (39:50):
Okay, So that because that right now the official target
is eighty percent reduction by you.
Speaker 2 (39:54):
Said by twenty thirty eight, Yes, so when you want
to get nearly at near zero, when we get so
it's an eight percent reduction gets this down to near zero.
Speaker 1 (40:02):
Now, the second elephant in the room that I wanted
to bring up, but we got sidetracked into a lot
of other discussion is one about trust, and it is
worth acknowledging here. A lot of people in this room
will be familiar with Exon's history around so in doubt
on climate science, just load down climate action. At one point,
Exon employed some of the world's best climate scientists. They
(40:25):
predicted very accurately, what would happen if you keep burning
fossil fuels and we are living with those consequences today.
You've said multiple times Exon is a different company today.
But given Exon's history, why should people trust you?
Speaker 2 (40:41):
Now? Yeah, Well, I think what you've described there's you
can debate. I think the facts around that. I think
we had two scientists working thirty or forty years ago.
These are things that happened thirty or forty years ago.
I think what people had to focus on what have
we been doing, what are we committing to do, and
what are we demonstrating that we're doing. And as I
come back to you, if you look at the things
that we're doing today, we're investing more than any other
(41:03):
company across a broader array of solution sets to try
to help economies decarbonize. I think that's what we can
be expected to do, or what should be expected of us,
and I think we're working harder to deliver on that.
But at the end of the day, you've got to
have supportive policy in lieu of a market but ultimately
you got to have market forces.
Speaker 1 (41:24):
But when we talk about those efforts, which you say,
we're thirty forty years ago, now you were at the
company at the time you joined in nineteen ninety two,
Many of these efforts were done in the nineties and
the two thousands. I know you weren't in a role
which made the decisions whether these efforts go forward or not.
But you are in charge of the entire company today,
and the questions I'm asking you are questions that your
(41:47):
predecessors took actions on, and now you're answering those questions.
Twenty years from now, your successors will be answering questions
about the actions you take today. So that will be
a time when climate impacts will be worse. And I'm
saying will because that's a scientific certainty, as exon scientists
(42:07):
have predicted so what are you doing now to protect
your legacy At EGXON.
Speaker 2 (42:12):
We're trying to solve the problem is leveraging the capabilities
that we have as a company. That's what we've been
talking about this whole podcast. I mean, the reality is
there's no one company out there doing more than we're doing.
If you look at the amount of money that we're
investing on an annual basis, the commitments on an average
annual basis, it's a third of what the US EPA
is spending. That's one company doing that. So again, I'm
(42:33):
not claiming that we're going to solve the problem, and
I'm claiming is we're going to use our capabilities to
contribute to solving that problem. I think that's all that
we can ask of ourselves as a company, and that's
what we're doing. Thank you, Dare, thank.
Speaker 1 (42:44):
You, thank you for listening to zero. Now for the
sound of the week, that's the sound of the heaters
(43:06):
keeping us warm in the Bakwu Stadium here at COP
twenty nine. If you like this episode, please take a
moment to rate or review the show on Apple Podcasts
and Spotify. Share this episode with a friend or with
someone who has had a crude oil bar at a SPA.
You can get in touch at zero port at bloomberg
dot net. Zero's producer is Mighty le Rau, Bloomberg's head
(43:28):
of podcast is Sage Bauman, and head of Talk is
Brendan Nunan. Our theme music is composed by Wonder Day
Special thanks to Kevin Crowley, jend De, Louis schwan Wagner,
Aaron Rudkoff, Jessica Beck and Ethan Steinberg. Thanks also to
the Atlantic Council, the International Chamber of Commerce and Uwe
sabiovski I am Akshatrati Band
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