Cost remains key challenge to transition: ExxonMobil

Market: Crude oil, Emissions, Hydrogen
18/03/24

Society may want to see emissions reduced, but the challenge is that no one wants to pay for the energy transition, according to the chief executive officer of ExxonMobil.

"And so if you don't pay for it, you can't engage the markets, you can't provide the incentives for what are very large capital investments," Darren Woods said today at the CERAWeek by S&P Global conference in Houston, Texas.

Although government incentives -- such as those pushed by the Inflation Reduction Act in the US -- are helping, at some stage market forces need to be in a position to take over.

"As a company, I am not real keen on building businesses based on government subsidies," Woods said. "That's not a sustainable business model."

The challenge for hydrogen in particular is there is not a "huge incentive" to drive forward low-carbon projects over existing sources.

Woods also defended a lawsuit the company is pursuing against two activist investors who had pressed for ExxonMobil to set more ambitious emissions targets, even though they have since pulled the proposal.

Investment company Arjuna Capital and Dutch activist group Follow This had been seeking a a shareholder vote on a motion urging ExxonMobil to target more ambitious Scope 3 emissions,

"These are not legitimate investors -- they are activists," Woods said. "These activists have no interest in the economic wellbeing of our company."

The shareholder proxy process that involves the US Securities and Exchange Commission has been "hijacked to the detriment of our shareholders," he added.

By Stephen Cunningham

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