ExxonMobil discusses commitment to zero emissions
The oil giant ExxonMobil is getting serious with its target to achieving net-zero greenhouse gas emissions for its operated assets by 2050.
The oil firm was responding to rising oil prices which rose to seven-year high on Tuesday amid ongoing supply concerns and escalating tensions in the Middle East.
ExxonMobil CEO, Darren Woods, however expressed confident the prices will trend lower.
In the immediate future, however, the oil executive said the market should expect volatile prices as the industry’s recovery from COVID-19 continues.
“As you get supply and demand tighter, events that happen around the world … lead to a lot more volatility because there’s less of a buffer, and I think we’re going to see that for some time now,” he said.
“Until industry begins to ramp up productions and increase the level of supply to meet this growing demand, or in turn demand starts to come down a little bit you’re going to see a lot more volatility until we get better stability.”
Woods added that it’s hard to predict when the market might balance out given the many players involved.
West Texas Intermediary crude future the U.S. oil benchmark, traded as high as $85.74 per barrel on Tuesday, a price last seen in October 2014. The price marks a blistering recovery after the contract briefly traded in negative territory in April 2020, as the pandemic sapped demand for petroleum products.
International benchmark Brent crude broke above $88 per barrel, also hitting the highest level since 2014.
As producers continue to keep a lid on production while demand recovers, some observers have called for oil to top $100 per barrel this year.
But Woods said he doesn’t get “overly enamored” with today’s high prices. When looking at new investments the company focuses on ensuring operations can be competitive across a wide range of price environments, he said.
“We anticipated higher prices. We also anticipate a lot of volatility. And frankly we’re anticipating lower prices as we go forward,” he said.
Exxon said it is targeting net-zero greenhouse gas emissions for its operated assets by 2050. The announcement follows similar targets from competitors, and comes as Exxon faces board pressure to act on climate change. In 2021, upstart activist firm Engine No. 1 successfully placed three of its candidates on the oil giant’s board.
Exxon’s target does not include so-called Scope 3 emissions the environmental footprint from the products a company generates or the company’s supply chain. Scope 3 emissions are typically the highest, and the hardest, to quantify.
Tuesday’s climate-focused pledge builds on prior announcements from Exxon on how it plans to cut its emissions. The company has also pledged billions of dollars to develop emissions-reducing technologies like carbon capture.
Woods said the target is “more than just a pledge” and that the company has a “line of sight” for how it plans to slash its emissions.
