Every new passenger car sold in the world will be electric by 2040, according to Exxon Mobil CEO Darren Woods, in an interview aired this weekend by CNBC.<\/p>\n
The interview also covered the company\u2019s climate ambitions, putting a flashy coat of paint on an organization that is the world\u2019s 5th largest historical polluter and has pushed climate denial at a high level for half a century.<\/p>\n
Exxon Mobil CEO Darren Woods sat down with CNBC\u2019s David Faber for a long interview about climate change. The full interview is 35 minutes long<\/a> (on top of a previous hour-long interview<\/a>) and mostly discusses climate change and Exxon\u2019s carbon capture and storage desires.<\/p>\n The interview sounds, at first glance, surprisingly reasonable and candid. Woods does not deny the scientific reality of climate change, calls for carbon reductions and a higher global carbon price<\/a>, and recognizes that electric cars are coming.<\/p>\n But in view of Exxon\u2019s history, Woods looks more like a wolf in sheep\u2019s clothing.<\/p>\n Of particular note is that he seems to think that sales of new gas-powered passenger vehicles will end in 2040 globally \u2013 before even many governments do. Some governments have set a target earlier than that \u2013 for example 2035 in California<\/a> and Europe<\/a> (some European countries will go even earlier<\/a>), 2030(-ish) in Washington<\/a>, and the gold-standard 2025 in Norway<\/a>. But there are others which have either set no target or which have set later<\/em> targets, like China<\/a> and Japan\u2019s<\/a> 2035 targets that still allow gas cars, and the US which currently has no target but the earliest nationwide proposal is for 2045<\/a>.<\/p>\n We\u2019ve written before about how many of these targets will likely be exceeded<\/a> (and also why post-2035 ambitions are pathetic<\/a>), but the notion that Exxon also<\/em> sees these targets being exceeded is quite interesting. Particularly given that not long ago, Saudi Aramco, the world\u2019s largest oil company, said that it expects 90% of vehicles to still be driven by internal combustion engines in \u201cmid-century\u201d<\/a>, and industry analyst IHS Markit thinks only 30% of new cars<\/a> in \u201ckey automotive markets\u201d (i.e., not globally) will be electric in 2040.<\/p>\n So Exxon\u2019s is a big outlier here, and is predicting a much earlier end to gas vehicles than most other groups.<\/p>\n Though Woods still claims this isn\u2019t a threat to Exxon\u2019s business. He says that even if all new cars were electric by 2040, that would only drop oil demand back down to 2013-2014 levels by Exxon\u2019s calculations. Since the company was profitable then, he sees a future where it can remain profitable even with that level of demand.<\/p>\n A much larger part of the interview is devoted to Exxon\u2019s plans for carbon capture, which it is clear that Woods sees as a potential future revenue stream that Exxon can leverage.<\/p>\n Woods paints a rosy picture about Exxon\u2019s potential for contribution, but it\u2019s easy to see the dollar signs in his eyes while he does so.<\/p>\n He claims that Exxon is responsible for more direct air capture than any other company in the world, and thinks that Exxon can be a leader in carbon capture.<\/p>\n Direct air capture is the idea that carbon can be taken directly out of the air and then sequestered in some way to make sure it stays out of the atmosphere. Environmentalists have questioned whether it is a valuable goal<\/a>, or if it risks delaying climate action or simply works to serve oil industry profits.<\/p>\n Currently it is very costly, as Woods points out in the interview, stating that it is \u201ctoo expensive\u201d to consider right now (would this excuse work if you threw your trash in the street and told your neighbors\/city it\u2019s \u201ctoo expensive\u201d to pay taxes for trash pickup? try it out and report back in the comments).<\/p>\n On this tack, Exxon has recently asked for a higher carbon price<\/a>, because this would help incentivize companies to develop carbon capture technology. Which is true \u2013 if Exxon, or some other company, could eventually capture carbon at a cost of $80 a ton and the carbon price is $100 a ton, then it could profit by removing carbon from the air, and this will incentivize cleanup while disincentivizing pollution.<\/p>\n But we\u2019ve heard this carbon pricing story before from Exxon. Last year, Exxon lobbyist Keith McCoy was caught on tape by Greenpeace<\/a> revealing the company\u2019s reason for publicly supporting carbon pricing. The lobbyist said that Exxon felt it was politically safe to advocate for carbon pricing because it makes the company look good (known as \u201cgreenwashing<\/a>\u201c), but that \u201ca carbon tax is not going to happen,\u201d so Exxon benefits from goodwill but gets to continue benefitting from massive subsidies<\/a>.<\/p>\n It is possible<\/em> that Exxon has now earnestly changed its position only one year later, but even if it has, it certainly feels like Exxon may have only changed that position because it sees potential for profit. And given Exxon\u2019s history on climate, the wolf-in-sheep\u2019s-clothing theory is quite persuasive.<\/p>\n In the interview, Woods completely fails to take responsibility for Exxon\u2019s tremendous contributions to climate change. When Faber asks whether there is any question that climate change is manmade, Woods states that there\u2019s no question it is, and that \u201cit was always understood that CO2 in the atmosphere had potential for warming.\u201d<\/p>\n This statement is true, scientists have known for a long time that CO2 increases warming and that humans are causing this. But Woods blatantly ignores a half-century of Exxon\u2019s efforts<\/a> to cast doubt on climate science<\/a>, which it is currently being tried in court over<\/a> and which McCoy admitted to in Greenpeace\u2019s investigation<\/a>. Exxon knew climate change was happening and lied about it, and Woods not only doesn\u2019t acknowledge those lies, but claims Exxon never told those lies. Which is, itself, another lie.<\/p>\n And while Exxon plans to lower its carbon emissions and become carbon neutral by 2050, that only accounts for its \u201cscope 1 and 2\u201d carbon emissions. This only counts company-owned facilities and vehicles and the energy they use, but it does not<\/em> account for the impact of various impacts like distribution, leased assets, employee travel and, most importantly, Exxon\u2019s products, which account for the vast majority of any fossil fuel company\u2019s \u201cscope 3\u201d emissions (for Exxon, about 85% of its emissions are scope 3).<\/p>\n Exxon has not committed to carbon neutrality for scope 3 emissions, so, its \u201ccarbon neutral\u201d commitment means it will offset 100%\u2026 of 15% of its emissions.<\/p>\n Part of Woods\u2019 plan includes other ways to leverage Exxon\u2019s vast store of hydrocarbons and its existing infrastructure into cleaner-burning fuels. Rather than eliminating petrochemicals from our energy supply, which is necessary for the climate, Woods wants blue hydrogen (cracked from methane, rather than green hydrogen which is generated through electrolysis of water), biofuels and ammonia to play a part in the conversation. He is sure to point out the \u201cchallenges\u201d of solar, wind and battery storage \u2013 three products his company isn\u2019t involved in. And he explains how LNG could fix Europe\u2019s heating issues, rather than geothermal, heat pumps, electric heating or other less-polluting or more efficient solutions. Weird, almost like he\u2019s selling us something.<\/p>\n Despite that Exxon, a single company, has sold products responsible for almost 3% of all of humanity\u2019s historical carbon emissions, Woods claims that Exxon can be a large part of the cleanup. Which seems appropriate, since Exxon made the mess in the first place<\/em>.<\/p>\n And at the $100\/ton price that Exxon seems to favor, it would cost several trillion dollars to make up for its historical contribution to carbon emissions and at least $65 billion for its scope 3 emissions for the year 2020. Exxon made $181 billion in revenue and $30 billion in profit in 2020.<\/p>\n But rather than spending the $65 billion a year it needs to clean up its scope 3 CO2 at the price it favors, Exxon has announced a plan to spend just $15 billion over 6 years ($2.5bil\/yr) on its scope 1 and 2 emissions reduction plan.<\/p>\n Woods plays the blame game, which is so common with every entity these days with respect to climate change. In this game, everyone stands around pointing fingers, blaming some other entity for climate change, absolving themselves as only responding to market forces, and claiming that action can only happen once some other entity takes action first.<\/p>\n Exxon, in this case, was only responding to \u201cconsumer demand,\u201d and still responds to consumer demand, selling oil because there are buyers for it. Woods foresees continuing to meet that demand, and considers Exxon the savior for people around the world who are \u201cliving in energy poverty.\u201d But a large majority of currently proven oil reserves must stay in the ground if we want to avoid catastrophe<\/a>, and that catastrophe will disproportionately affect those people living in poverty. He also blames government for not crafting consistent and efficient regulation, after Exxon has lobbied against action for decades.<\/p>\n Meanwhile, consumers point out Exxon\u2019s contribution to climate change \u2013 the 2.6% of scope 3 carbon emissions the company\u2019s products are responsible for \u2013 and claim there are a lack of non-polluting options. Then blame government for not acting to pass climate legislation, while also complaining about high prices for a fuel that needs to stay in the ground anyway and basing their votes on whichever candidate \u201cseems more fun to have a beer with<\/a>\u201d rather than which one will keep our only home from burning<\/a>.<\/p>\n And governments stand by in a cowardly manner because of fear that voters will blame them for any disruption of the energy industry and that companies will leverage their power towards unseating any representative who affects the profits of established, polluting firms (rather than funding them, as those firms currently do).<\/p>\n This behavior is echoed on a worldwide level, as governments and citizens wonder why they should act when that other country over there \u201cisn\u2019t doing enough\u201d \u2013 a common excuse used by world\u2019s climate criminals<\/a>.<\/p>\n So everybody points the finger at everybody else, uses this to absolve themselves of blame and to justify inaction.<\/p>\n And the worst part is, everyone is partially right. Nobody is doing enough. Everyone can do more.<\/p>\n But the \u201cwait and see\u201d approach (or, worse, Exxon\u2019s \u201cpropose solutions you know are unpopular or not technologically or politically viable\u201d approach) doesn\u2019t solve any problems. We can\u2019t all stand around, pointing fingers and loudly proclaiming our innocence while the boat sinks. We have to grab a pail and start bailing, and the more powerful entities, like perhaps the 16th largest company by market cap in the world, have to leverage that power to bail harder.<\/p>\n Exxon mustn\u2019t wait for the carbon prices to incentivize cleanup \u2013 it needs to clean up its mess now, and make up for the century of messes it has caused and lies it continues to tell. Consumers have to stop making excuses for sticking to the status quo, and need to demand more action from governments and from themselves, because everyone\u2019s life is going to have to change somehow or another to fix the biggest problem humanity has ever faced (and caused). And governments need to take courageous and bold action and call Exxon\u2019s bluff on carbon pricing \u2013 which a majority of Americans in every congressional district support<\/a>.<\/p>\n And if we do all that, maybe we\u2019ll even beat Exxon Mobil\u2019s 2040 all-EV target.<\/p>\nNo new gas cars by 2040<\/h2>\n
Carbon Capture as another revenue stream<\/h2>\n
The mess is Exxon\u2019s \u2013 why should it profit from cleanup?<\/h2>\n
The emissions blame game<\/h2>\n