Exxon outlines plan to prepare for lower carbon future

Exxon outlines plan to prepare for lower carbon future

Exxon Mobil, the nation’s largest oil company, on Wednesday outlined a five-year plan to increase its earnings and grow its dividend while working to lower emissions in support of the Paris climate goals.

The Irving oil major said it is planning to reduce its greenhouse gas emissions from its oil and gas production by 15 to 20 percent from 2016 levels by reducing flaring and methane emissions by 40 to 50 percent by 2025. The company is planning to eliminate routine flaring, in which natural gas is burned off due to lack of gathering lines and processing facilities, by 2030.

“We are fully committed to growing shareholder value by meeting the world’s energy demands today and pursuing a technology-driven strategy to succeed through the energy transition,” Exxon CEO Darren Woods said in a statement. “Looking ahead, we’re working to reduce our emissions and develop solutions, such as carbon capture and low-carbon hydrogen, needed to de-carbonize the highest emitting sectors of the economy – a critical requirement for society to achieve its net zero ambition.”

Exxon’s strategy comes as the oil giant faces mounting pressure from governments, investors and environmental groups to abandon its century-old oil and gas business model to avoid the worst consequences of climate change. The company this week added two transition-minded directors to its board as it contends with a proxy battle from an climate-minded activist investor. A federal judge also this week levied a $14 million penalty against Exxon for thousands of Clean Air Act violations at its Baytown refinery.

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Still, Exxon said it plans to spend $16 billion to $19 billion this year and as much as $25 billion per year through 2025 on low-cost, high-return oil and gas projects to meet global demand for fossil fuels. These investments are expected to deliver shareholder returns of more than 30 percent, and the vast majority of its oil and gas projects can generate a 10 percent return even with oil at $35 a barrel, Woods said.

Unlike European oil majors that have committed to lowering oil and gas production to combat climate change, Exxon said it will focus on lowering emissions from its fossil fuels production and help other industries lower their emissions.

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