HOUSTON—Amid increasing concerns of energy security on the heels of the Russian-Ukrainian conflict, the U.S. shale industry—especially the Permian Basin—is playing a critical role in keeping markets supplied with essential energy, according to Darren Woods, CEO of oil major Exxon Mobil Corp.
“Our industry has an important role in keeping markets supplied, helping keep lights on and keeping hospitals, schools and businesses running,” Woods said speaking at the annual CERAWEEK energy conference by S&P Global on March 7.
While the situation in Europe underscores the need for energy security, Woods said technology breakthroughs in the Permian Basin have helped unlock “vast new sources of oil and natural gas in the shale,” adding that crude oil and energy exports from the Permian and other parts of the U.S. will help stabilize markets and strengthen global energy security.
Aside from providing energy security, Woods said new technologies deployed by the U.S. shale industry will also be a “game changer” for another challenge that the industry faces—reducing greenhouse-gas emissions and supporting the transition to a net-zero future.
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Woods took the opportunity during his speech to shed light on Exxon Mobil’s low-carbon initiatives in the largest U.S. shale play.
“In the Permian…our company is boosting natural gas production and aggressively reducing emissions. We are working on reaching net zero Scope 1 and 2 emissions in our Permian operations by the end of the decade—which should be an industry first,” he said.
Woods also called for more investment in technologies to reach the global net-zero goal.
“As the International Energy Agency has said, current solutions set to achieve global climate goals is insufficient. It will not get us to net zero,” he said, stressing on the need for investment in carbon capture and alternate energy sources, like wind and solar, as well as favorable energy policies, especially during these “uncertain times.”
“It’s important for governments to understand the consequences of policies and making sure they understand the potential implications on energy supplies,” he added.
The challenge of meeting climate change goals calls for a greater need to collaborate, according to Woods.
“We need to make sure that policies that are put in place and the direction in which we are going is thoughtful and balanced so that we can continue to meet the needs of society around the world while working on emissions reductions…I believe we can do both,” he said.
Last month, Exxon Mobil said it forecasts Permian Basin production growth by 25% in 2022—similar to last year—following a push from the White House to boost U.S. output to tackle sharp increase in fuel prices.
Commenting on Exxon Mobil’s strategy to achieve increased output, Woods said the company took advantage of its scale to lay out a plan, which is a low-cost, high-value operation.
“We know the resource is there and the challenge was effectively accessing that resource and maximizing recovery at lower cost,” he said.
The increase in production is the “fruition” of a strong corporate strategy dating back to 2018, he added, including investments that were made in infrastructure and technology to produce low-cost barrels.
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