ExxonMobil: Positioning for a Lower-Carbon Energy Future?

It's a report, the 2018 Energy & Carbon Summary. And (to confess a guilty secret) I came to it via WUWT. Well, I wouldn't have had to if the rest of my blogging sources were doing their job properly. And if it helps, the Watties have it from the NYT. You'll recall, I'm sure, that the Nasty Shareholders had demanded last year that the company give a more detailed accounting of the consequences of global policies aimed at curbing emissions of earth-warming gases. I cannot, now, recall if I wrote about that. The NYT's summary of the company's response is Exxon’s conclusion: Even aggressive climate policies pose “little risk” to its investments. It stressed that it expected healthy demand for its products for decades to come, regardless of how strongly countries move to cut emissions.

Predicatably, the NYT has no problem finding someone to disagree, and that person is Adam Scott (who?) who points out (a) Exxon assume CCS; (b) maybe we'll decide to hold warming to 1.5 oC; (c) lawsuits! To which I would answer (a) I'm dubious about CCS too but I doubt much of Exxon's answer hangs on it; (b) ho ho; but anyway, I think Exxon assuming Paris is probably reasonable; and (c) well, I think that's all drivel as I've said many times before, but since it is lawyer-drivel, you never can tell.

But enough of that. What does Exxon actually say?

Letter from the Chairman

The chairman has a page of stuff to say, read it yourself, of which I'll select:

Providing affordable energy to support prosperity while reducing environmental impacts – including the risks of climate change – is our industry’s dual challenge... The global energy system is massive. The world needs solutions that can scale... Our algae biofuel program holds great promise... We are also a leader in carbon capture and storage (CCS) research. The world will need much more CCS... Policy has a place here, too. We’ve been vocal in our support of a carbon tax, and recently joined the pro-carbon-tax Climate Leadership Council. We also support the Paris Agreement.

All of that is spiffy. Read as PR, it's all in the right direction, and Lee Raymond wouldn't have been seen dead saying any of it. In 2015 I was rather dubious about their actual, as opposed to nominal, support for a carbon tax. But enough of the obligatory glad-handing, what of the substance?

Summary at-a-glance

For all you busy mustelids with the attention span of a lagomorph, they provide a handy summary. Dubious point #1 is "Worldwide electricity from solar and wind will increase about 400 percent" to 2040. This looks like a classic case of the Photovoltaic growth: reality versus projections of the International Energy Agency – the 2017 update fallacy (but, if they're relying on WEO predictions, that would be entirely defensible in public). And now I come to look, the pic I've just inlined and stuck at the top probably says it all. They're really predicting very little shift to 2040.

Considering 2°C scenarios

Says "The annual Outlook for Energy represents ExxonMobil’s updated view of the most likely future for the global energy system and forms the foundation of the company’s strategic decisions, business plans, and investments". So quite likely I'm reading the wrong base document (there's a graph on page 7 which shows their Outlook CO2 scenario to 2040). It also helpfully notes that "While the current NDCs do not appear to achieve a 2°C scenario, the Paris Agreement is a positive step in addressing the risks of climate change".

Potential proved reserves and resources impacts considering 2°C scenarios

The "Exxon collapse" scenario - assuming you don't believe the lawsuits - is based around the stranded assets idea. So they have to address that problem, and it doesn't appear too hard for them to do so:

At the end of 2016, ExxonMobil’s proved reserves totaled about 20 billion oil-equivalent barrels, of which approximately 53 percent were oil and 47 percent were natural gas... value of an integrated oil company’s upstream operations is its proved reserves... we estimate that by 2040, over 90 percent of our year-end 2016 proved reserves will have been produced. Considering that the 2°C Scenarios Average implies significant use of oil and natural gas through the middle of the century, we believe these reserves face little risk.

Errm, any questions?

The pointt what

I'm channelling Hobbes. I hope you noticed. So: anyone who hoped that the shareholder vote would make Exxon write down a report and then go "Holy shit! You're right: now you force us to look, we realise it's all going horribly wrong" will be dreadfully disappointed. Instead, they've written down a report that justifies them continuing to do exactly what they planned to do already. Weird or what? The advantage - other than providing employment to some report-writers - is that it is all written down now. If you don't like their conclusions you can read through their arguments and attempt to spot the gaping flaws. If you think you're hard enough.

Refs

* Exxon Funds Push for a Carbon Tax That Ends Climate Liability Suits - climateliabilitynews