(Bloomberg) — For Darren Woods, Exxon Mobil Corporation’s chief executive officer, the answer to climate change won’t be found in solar panels or high-profile global accords, but rather in a U.S. government laboratory.
At a time when environmentalists want Exxon to leave more oil and gas in the ground, Woods is pressing an alternative strategy. He wants to explore the “fundamental science” behind climate change for a way to cut carbon emissions without forcing consumers “to give up the use of energy, and give up their standards of living.”
To that end, Exxon will unite with the Energy Department to study technologies including algae biofuels, carbon capture and storage, the company said in a statement. Exxon is contributing as much as $10 million a year to the effort, or the equivalent of about five hours of profit for the oil major. The pact runs for a decade.
“We’re working on a solution that doesn’t exist but is needed,” Woods said in an interview. “Somebody needs to be doing that. There’s more value in that than investing in technologies that already exist but are not comprehensive enough.”
The partnership will focus on innovations that work at the massive scale needed to make a meaningful effect on the climate. Exxon’s contributions can help federal scientists “fail fast” on unworkable concepts so they can advance to ideas that might, said Martin Keller, director at the National Renewable Energy Laboratory in Golden, Colo.
Unsurprisingly for the leader of the West’s biggest oil and gas company, Woods prefers to focus on reducing emissions through technology that takes carbon out of the atmosphere, taxing carbon and reducing methane leaks rather than limiting oil and gas production.
“Frankly we haven’t seen a strong desire around the world for folks to do that,” Woods said.
For many, it will be too little, too late. The world is already warming at a rate that makes the Paris climate accord a serious challenge. And like its Big Oil rivals, Exxon has become a lightning rod for climate activists at its annual meetings.
‘Failed to respond’
This year will be no different. The New York State Common Retirement Fund and Church of England last week said they will vote against all Exxon directors and urged other shareholders to do the same. They say the super major has “failed to respond adequately” on climate change and greenhouse gas emissions since 2005 in contrast to peers such as BP plc, Chevron Corporation, Royal Dutch Shell plc and Total SA.
Exxon says it adequately considers climate risks in its business planning.
Shell and other oil majors have won plaudits for expanding their ownership of wind and solar assets, and for expanding into power generation. For Exxon, though, that’s the wrong approach, Woods said.
“We don’t see us adding a lot of unique value in that space,” Woods said. “More fundamentally, if you look at what society is asking for, it’s not for companies like ourselves to go into those sectors. Instead what they’re looking for is solutions to the risk of climate change.”
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