As Exxon Mobil trail blazes the path to net zero emissions—announcing carbon capture and blue hydrogen projects, investing in low carbon businesses and deploying new sustainability technology—the company is emphasizing the importance of securing affordable and steady energy.
Put another way, the company is trying to tackle the trilemma of energy security, access and sustainability.
The theme dominated the 2023 World Petroleum Congress in Calgary, Canada. As the world embarks on “the path to net zero,” companies such as Exxon have established a Low Carbon Solutions business unit to address emissions.
Jaxon Caines, Hart Energy’s technology reporter, sat down with Vijay Swarup, Exxon’s senior director of climate strategy and technology, in Calgary to discuss the supermajor’s commitment to providing affordable, scalable energy.
JC: What are some of the top objectives for you in terms of climate strategy over the next several years into 2050?
VS: I think you start with the overarching strategy, which is to provide energy. It's an industry that supplies a product that's needed, so we have to maintain that flow of energy. Look at this room. Everything in this room came from energy. So you have to have a continuous flow of energy. And so we need to continue to do that. That's the key word in this entire conference, you have to provide the energy while reducing the emissions.
And so we look for investments across the entire spectrum. And so as we continue over the next decade, I think it's going to be focusing on both. And you see that we're doing that. We have numerous announcements on where we're investing and growing our traditional business. Whether we're expanding refinery, building another chemical plant, expanding production in the Permian, or expanding production in Guyana—those are all examples of doing what's needed today. And on the other side, we're doing three or four announced carbon capture projects. We have a hydrogen project that's being progressed in Baytown, [Texas]. We have advanced recycling. The thing that's happening here is you have the traditional value chains, if you will, and you have these emerging value chains, which are focusing more on the low carbon pathways. And we continue to invest and look in technologies to do both.
JC: As we approach 2030, how much differently will Exxon’s operations look, particularly in the upstream, from how they do today and, for that matter, compared to 2016?
VS: Well, I think some things will change and some things won't. I think our commitment to providing reliable, affordable, scalable supply is always going to be there. I think what you're going to see over the next 10 years is … more of these newer technologies getting on the deployment curve. And what happens when you get on the deployment curve is two things happen. One, scale goes up and cost goes down. And so you don't really want to compare today with tomorrow because you're in a very different paradigm. Today you're deploying technologies that have had 30, 40, 50 years to mature. Tomorrow you're deploying technology that hasn't really had its first scale deployment yet. You just got to make sure that you're not looking to do a parity comparison between today and tomorrow. You've got to let the maturity happen. We're focused on getting these technologies deployed because that way you can prove at scale and you get better every time you deploy.
JC: In creating a climate strategy, Scope 3 emissions seems to be one of the most difficult areas for people, including in the oil and gas industry, to wrap their minds around. How do you look at Scope 3 and curtailment, particularly since you produce energy but cannot really dictate how it’s used?
VS: Well, let's talk about carbon accounting, which is an incredibly important topic and one that we spend a lot of time thinking about. Scope 3 emissions are called indirect emissions because they're emissions outside of your direct control. And the emissions associated with, for the purposes of this discussion … use of product. What we're doing is we're saying, ‘Hold on a second. The targets we set and what we're out to achieve are reducing emissions in our own operations—which is sometimes called Scope 1, 2—why do we do that?’ Because that’s what we control. Then we work with customers to help reduce their emissions. So a perfect example is, if you're using gas instead of coal, you're deploying less emissions when you produce the power.
I think it's important to not artificially confine the problem in terms of a Scope 3 or [Scope 1 or 2], no it's the lifecycle of the product that matters from the beginning to end. So we are more proponents of a lifecycle approach methodology—LCA as it's called—and that allows a pathway to be compared to another pathway. And if we're going to produce and provide energy while reducing emissions, you have to do that by comparing pathway one to pathway two and trying to find the lowest emission pathway to provide the energy.
With hydrogen you need to understand the pathway for the hydrogen and you need to take steps along that pathway to reduce the emissions. The more we have that discussion, the more we'll advance the technology deployments and the more we'll advance reducing the emissions the atmosphere sees.
JC: This World Petroleum Congress has made the path to net zero the theme of this year’s conference. What are some things you’ve learned from the discussions you’ve seen or had with attendees? And what do you think are some things that surprise people when you talk about Exxon’s efforts?
VS: I would like to think that nothing we say would surprise anybody because I think one of the things about our company is constancy of purpose and we have a constancy of purpose over 130 years. The constancy of purpose is providing affordable, scalable energy in the most efficient way. Now that [efficiency] is now being extended to lower emissions, lower carbon intensity. And so you see that even on our billboards and everything we're talking about ... I think the theme though is you've got to continue to provide energy. You can have no disruption in energy. It is essential to quality of life. This is undisputable: quality of life and access to energy go together. We can't forget that there are a billion people out there that don't have that today. And the population projections say you're going to have 2 billion more people coming to this planet. And so we just got to make sure that as we're having discussions, net zero is a term, scale is a term that's often talked about, deployment curves, transitions in terms of policies and technologies working together because there’s a natural fit between policy and technology to get technologies deployed. And so I would like to think that the communications, the openness to have the communications, is constantly getting better. And I think the focus on delivering today is very important. Delivering today and building the pathway to tomorrow
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