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The founder of the Engine No. 1 activist investor that challenged ExxonMobil’s strategies and won seats on the supermajor’s board last year, is calling for more oil supply from the Permian basin to reduce dependence on foreign suppliers.
The Permian and the U.S. shale patch as a whole are “arguably the most transition-aligned oil and gas production today” because of the quick-turnaround with high returns compared to long-duration capital-intensive projects, Christopher James, Founder and Executive Chairman at Engine No. 1 wrote in an opinion piece in The Wall Street Journal.
Engine No. 1 scored a huge victory for activist shareholders at Exxon’s annual general meeting in 2021, winning three board seats despite the tiny stake that it holds in the oil supermajor.
Following the Russian invasion of Ukraine, and the U.S. ban on energy imports from Russia, officials, and politicians have changed the tune to the U.S. oil industry, saying that boosting supply from America is providing for its energy security. The U.S. oil and gas associations have been sending that message to the market and to policymakers for years.
In the opinion in the Journal, Engine No.1’s James wrote:
“The first and most immediate step is to prioritize North American oil production over imports from less desirable suppliers. Permian Basin shale oil can be brought online quickly to substitute for the absence of Russian oil on global markets.”
“Alongside the obvious security and economic benefits to the West, the oil-and-gas industry has the opportunity to ensure the Permian is the cleanest hydrocarbon source in the world. To do this, producers should set aggressive emission-reduction targets and drive methane emissions as close to zero as possible with measuring and monitoring verified by third parties,” James added.
“The realization that dependence on oil threatens not only the environment but geopolitical stability should spur businesses and consumers to consider the full spectrum of energy sources without ideological bias,” he notes.
ExxonMobil has said in the past months that it plans to achieve net-zero greenhouse gas emissions from operated assets in the Permian by 2030, and an ambition to achieve net-zero greenhouse gas emissions for operated assets by 2050.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com