A model of an oil refinery is displayed at a congress.
The images are from the same company.
The congress was held in Houston last week for the first time in 30 years. Oil and gas leaders addressed climate change at a meeting. Key points made by some speakers at the Congress are provided in an insightful summary.
In this response, I try to add balance where the climate story was not told. The original article in the Financial Times was written by the authors M and J. My responses are labeled.
On the first day of the conference, Exxon Mobil's XOM +0.6% was the new tone, calling climate change one of the most important conversations of our time.
Exxon Mobil changed their climate position in the last year when they bought the Bass family holdings in the Permian and then in the last year announced a goal of 1 million boepd by 2024. Three new members were elected to the company's board that had transition experience. Exxon Mobil stated on December 6 that they would achieve net-zero greenhouse gas emissions by the year 2030. Exxon Mobil is not on the World Bank list of oil companies that have endorsed zero routine flaring.
It was part of a broad recognition that the sector's fortunes are now tied to the pace and course of the global transition to cleaner fuels.
The broad recognition is due to a number of factors.
The oil industry has a vision for the energy transition that is at odds with what is being advocated by climate scientists and activists. The oil companies are still the stars of the show, not the other way around, as the bosses at WPC see.
The main issue is whether to stop producing oil and gas or develop renewable energy. An argument is made that oil and gas contributes more to the world's energy than it does to its GHG emissions. European-based companies are doing this. US companies are planning to keep up their oil and gas production, but instead find ways to reduce GHG by using renewable energy and reducing gas flaring.
The growth of a carbon capture and storage industry needed to bury the GHG generated by continual burning of oil and gas products would have to be enormous. An analysis shows that a scale up of CCS looks impractical.
Wood said that the world needs our industry's expertise and experience to successfully reduce emissions while preserving economic prosperity. The oil industry is better positioned to tackle climate change than any other industry according to the boss of Chevron.
This is a hopeful claim but needs more study. If they mean by this oil and gas companies who reduce emissions by investing in renewable energy, then yes, the statement is still valid. If big oil in the US means to continue full oil and gas production while greening their operations and burying the leftover GHGs from burning their products, then this won't work.
The transition did not mention wind, solar and electric vehicles. Carbon capture and storage, hydrogen, and biofuels are important technologies in the oil industry, but they have yet to prove themselves as meaningful tools to combat climate change.
Carbon capture and storage will not save the oil and gas industry if it continues running at full production, although it may serve to remove a portion of GHG leftovers by 2050.
In the form of aviation and shipping fuel, and the manufacture of metals and chemicals, liquid hydrogen and derivatives will make up only 7% of energy in the year 2050. Although hydrogen is expensive now and prices will come down over time, it seems a case of too little too late for other applications.
Exxon's Woods warned that abandoning fossil fuels too soon could cause the energy transition to go into a ditch. He said that focusing on one aspect of the challenge could lead to significant consequences.
The words "Narrowly focusing on taking action on one aspect of the challenge" are not clear. We would all starve if Woods were to stop production of oil and gas. This solution is impractical if he means don't stop any production of oil and gas, which seems to be the position of US companies. The result would be a world that will be warmer than it has been in a million years.
The answer lies in a glide path of lowering oil and gas production, and hence GHG emissions, while wind, solar and battery sources that are now cheaper than new-build conventional power plants take their place in decarbonizing the world.
Saudi Aramco's boss was the talk of the conference after warning that the world was facing an ever more chaotic energy transition, centered on highly unrealistic scenarios and assumptions. He told delegates that admitting oil and gas was here to stay would be easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high.
One of the problems with making a transition to renewable energy is that it takes 7 to 10 years to pay back investment. This is too long for profit-driven companies. There needs to be a balance between climate action and investment recovery. He said that the world doesn't have a model for this.