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Exxon CEO Warns Overemphasis On Renewables Could Backfire

Exxon Mobil Corp. (NYSE:XOM) CEO Darren Woods has urged regulators to stop focusing on certain energy sources, such as renewable energy, to save the climate, warning that it would be a “huge mistake to be picking winners and losers and focusing on specific technologies”.

Instead, “we need to look more broadly and let the markets figure out which solutions deliver the most emissions reductions at the lowest cost," Woods told Nicolai Tangen, the CEO of Norway's Wealth Fund,one of the largest mutual funds in the world, on his podcast.

An attempt to move away from oil and gas immediately, with unchanged global demand, could be disastrous for clean energy, Woods suggested, adding that if we produce less LNG, for example, something else–like coal–would have to step in to fill the demand gap. 

According to Woods, Europe should follow the U.S. approach to climate policy, arguing that the continent risks driving companies away by regulating too hard. Woods told Bloomberg that one of the most important things the Americans (and ExxonMobil) are doing is developing technologies to capture and store carbon

Back in April, Woods caused quite a stir when he touted the company’s burgeoning Low Carbon business, saying it has the potential to outperform its legacy oil and gas business and generate hundreds of billions in revenues. According to Woods, the business has the potential to generate tens of billions of dollars in revenue after the initial 10-year ramp-up. 

"This business is going to look quite a bit different from the base business of Exxon Mobil. It is going to have a much more stable, or less cyclical, profile," Dan Ammann, president of Exxon's two-year-old Low Carbon Business Solutions unit, has vowed.

Exxon Mobil recently signed a long-term contract with industrial gas company Linde Plc. (NYSE:LIN) that involves offtake of carbon dioxide associated with Linde’s planned clean hydrogen project in Beaumont, Texas.  Exxon will transport and permanently store as much as 2.2M metric tons/year of carbon dioxide each year from Linde’s plant. 

In February, Linde unveiled plans to build a $1.8B complex which will include autothermal reforming with carbon capture and a large air separation plant to supply clean hydrogen and nitrogen. 

By Alex Kimani for Oilprice.com

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