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The head of ExxonMobil called on governments to set a market
price for carbon, while cautioning them against picking winners and
losers among energy sources.
"Getting a market price on carbon is going to be really
important to make sure we are really using market forces to
cost-effectively reduce [carbon dioxide (CO2)] emissions," Darren
Woods, ExxonMobil chief executive officer, said during a 2 March
panel discussion at CERAWeek by IHS Markit.
Woods was responding to IHS Markit Vice Chairman and Pulitzer
Prize-winning author Daniel Yergin, who had asked him about the
role governments should play in helping economies transition to a
low-carbon future.
The oil executive also cautioned governments that "they should
not pick winners and losers and they should not pick sectors,"
sending a message to President Joe Biden, who has made no bones
about weaning the US off greenhouse gas-emitting fossil fuels.
Woods' remarks about winners and losers were made on the same
day that a US District Court judge slapped a $14.25 million fine on
ExxonMobil's Baytown refinery complex in Texas for violating Clean
Air Act violations over an eight-year period.
Carbon credits and incentives
Instead, Woods said the government should open up the
marketplace to a mix of carbon credits and incentives, where
credits for reducing emissions in one sector could be used to help
reduce emissions in another hard-to-decarbonize sector.
Woods' recommendations found backing from Saad Sherida Al-Kaabi,
president and chief executive officer of Qatar Petroleum, who also
participated in the panel discussion.
Al Kaabi said governments should partner with the energy
industry, which has "put billions and billions of dollars" into
enabling people to drive cars, fly in planes, and have running
water and electricity.
"We need to be fair. The industry is responsive to the
requirements of the environment going forward," he added.
Yergin pointed to an International Energy Agency report that
said oil and natural gas will together make up 46% of the energy
mix in 2040. He asked both Al-Kaabi and Woods how their companies
would address the ensuing emissions from their operations going
forward.
Natural gas has a role
Both Al-Kaabi and Woods were adamant that gas has a role in a
transition toward a low-carbon future because they see wind and
solar generation as intermittent and unreliable sources of
energy.
The largest exporter of LNG, Qatar in February announced a $28.7 billion
expansion of its QatarGas fields that would be equipped with carbon
capture and storage technology. By 2027, Al-Kaabi said the expanded
facility will have the capacity to store 7-9 million metric tons
(mt) of CO2 emissions equivalent each year.
Al-Kaabi also said Qatar Petroleum is investing in drones and
other technology to identify and measure leaks of methane, a key
component of natural gas and a potent greenhouse gas, from its
operations. "You can't fix what you can't identify," Al-Kaabi
said.
Al-Kaabi said the oil industry was needlessly "hammered," but
the "issue we need to focus on is how we can replace coal." He said
125 million mt of CO2 equivalent emissions would be erased, the
equivalent of removing the emissions of 25 million cars, if
gas-fired generation was to replace coal generation in its
entirety.
Woods said he sees hydrogen as a low-carbon solution going
forward. When asked whether he saw hydrogen production moving to
commercial scale, he said "it all depends on the advancement of
technology."
He said the technology to produce hydrogen is expensive and its
applicability is limited.
"Frankly to do the job as required to help get society to net
zero, we are going to need more advances and costs associated with
that," Woods said.
Posted 02 March 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst
