With the massive arrival of electric cars, oil companies will have to drastically change. In this context, the words of the CEO of ExxonMobil are surprising, at least at first glance.
If the oil companies have undertaken to change, as shown in particular by the diversification of Total into TotalÉnergies, we never imagined that they could support mass electrification.
And yet the CEO of ExxonMobil told CNBC that all cars will be electric by 2040. Darren Woods, that’s his name, was on hand to talk about ExxonMobil’s climate ambitions and actions.
The American has made efforts to show, at least on the face of it, unconditional support for electrification. The one who denounced this same electrification in 2017 also revealed support for reducing CO2 emissions worldwide.
This posture has something to smile about, even in a cynical way, as ExxonMobil is one of the biggest polluters in the world. The firm is also the fourth oil company to have emitted the most CO2 since 1965. In 57 years, it has thus released 42,484 million tonnes of carbon dioxide.
We also know that ExxonMobil had been certain about the climate disaster linked to fossil fuels since 1981. But for several decades, the firm assured that this was not the case, going so far as to lead a campaign to “challenging climate science and weakening controls on fossil fuels”as revealed by Oxfam.
A new state of mind, really?
Knowing this, Woods’s words seem very reasonable. We know, for example, that Aramco, the most polluting oil company in the world, predicts that 90% of cars will still have a combustion engine in 2050. Two companies, two atmospheres… at least on the surface.
In fact, there are several reasons why ExxonMobil is not worried about this transition. This is why Woods is a good player and assures that he has no problem with electrification.
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According to him, the demand for fuel would remain strong, even if sales were purely electric from 2040. He reveals that gasoline needs would return to the level of 2013 or 2014 and thus ensures that the company would remain profitable in this case.
But the maneuvers of ExxonMobil and its CEO stem from a very specific calculation. And by digging a little, it is easy to see that the oil tanker even has an advantage in a certain scarcity of fuel demand, since prices would increase.
Exxon, a friend who doesn’t mean you well
In a context of war in Ukraine and electrification, it was surprising to see an oil tanker asking for a rise in the price of fossil fuels. Yet that is what Woods did in this interview for CNBC.
According to him, this would support companies to engage in carbon capture. A technology in which ExxonMobil is trying to get started!
By raising the price of carbon – among other fossil fuels – Exxon will be able to sell more expensive the one it captures. Even if it means, of course, weighing on the wallets of households at the end of the race, since this will cause an increase in the price of fuel.
Already last year, a shareholder of the firm had made remarks explaining that this technology was good for Exxon, since it improved its image while making it possible to make profit elsewhere than in the production and marketing of fuel.
Improving its image by making a profit is what ExxonMobil is looking for with rising carbon prices. It is even a double benefit since in addition to making a profit on the “cleaning” of the air, the firm can also put its overall balance sheet into perspective by this same means.
Greenwashing to wash your hands
A global assessment which does not frighten its CEO, who has refused to take any responsibility for climate change. “It has always been known that CO2 in the atmosphere has a warming potential”did he declare.
At no time does Woods think that humans and a fortiori the oil companies play a crucial role in this regard. In any case, he does not admit it publicly and dissociates the company a little more from its carbon footprint.
And as an entity, ExxonMobil doesn’t do that either. It has thus committed to carbon neutrality by 2050, but only in part. Indeed, this commitment to carbon neutrality only applies to a small part of its activity, namely its infrastructure, vehicles and the energy it uses.
But this does not apply to the distribution of its products, nor to its products. Unfortunately, in the case of an oil company, this represents 85% of its polluting emissions. In summary, ExxonMobil’s commitment to carbon neutrality therefore represents the obligation to offset only 15% of the emissions generated by the company.
Asked about the global pollution due to ExxonMobil, Woods once again kicked into touch. He thus assures that the oil giant is only “respond to customer demand” automobile owners.
This allows us to better understand the state of mind of Darren Woods, and thus understand why he is not worried. As long as Exxon’s accounts and forecasts are in the green, the CEO should be optimistic about the evolution of the automotive world.