Should We Cheer? ExxonMobil’s Renewable Energy Commitments Are In The News

Published on December 6th, 2018 |

by Carolyn Fortuna

December 6th, 2018 by Carolyn Fortuna 

Media outlets have been celebrating ExxonMobil’s renewable energy commitments, which now include a 12-year agreement with Denmark’s Ørsted A/S to buy 500 megawatts of wind and solar power. ExxonMobil’s renewable energy power contract in the Permian Basin is the first signed by an oil company.

Hallelujah! But, wait. Should we cheer?

Does bringing in renewable energy in the Permian Basin — the fastest growing US oil field — even start to make amends for ExxonMobil’s incredible, lasting, and shattering impacts on the planet of fossil fuel drilling and burning? Fossil fuels are the largest source of anthropogenic greenhouse gas (GHG) emissions in the world. Don’t we need to get fossil fuels out of our buildings in order to slash US fossil fuel use by 80% by 2050? And what about switching from internal combustion engines to electric vehicles? How does ExxonMobil’s expansive drilling in the Permian Basin achieve those goals, even with a nod to wind and solar?

Photo courtesy Houston Chronicle

It is important to remember as we weigh ExxonMobil’s renewable energy commitments that a huge acceleration in the extraction of fossil fuels has doubled their contribution to global warming since 1988. ExxonMobil announced in early 2018 that it plans to triple total daily production to more than 600,000 oil-equivalent barrels by 2025 from its operations in the Permian Basin. Indeed, Trump administration changes in the US corporate tax rate created an environment for ExxonMobil’s future capital investments, including its plan to spend more than $2 billion on transportation infrastructure to support its Permian extraction operations.

Bloomberg reports that the stakes are high for ExxonMobil and the Permian Basin, as its other global projects such as offshore production in Guyana won’t add significant production until the early 2020s. ExxonMobil’s shares haven’t kept pace with rivals, to the point that its market value is just $35 billion more than Royal Dutch Shell Plc. A year ago the figure was $175 billion.

When we burn oil, coal, and gas, we contribute to the current global warming crisis. Burning fossil fuels produces large quantities of carbon dioxide, and these emissions create climate change. They generate 42% of dangerous mercury emissions, 2/3 of sulfur dioxide emissions, and the vast majority of soot in US air. Unearthing, processing, and moving underground oil, gas, and coal deposits takes an enormous toll on our landscapes and ecosystems, according to the National Resources Defense Council. It’s not only drilling that adds to GHG emissions — the fossil fuel industry leases vast stretches of land for infrastructure such as wells, pipelines, access roads, as well as facilities for processing, waste storage, and waste disposal.

The Union of Concerned Scientists (UCC) reminds us that the costs of fossil fuels to our planet are both direct and hidden as they accrue at every point of the fossil fuel supply chain. Extraction processes generate air and water pollution and harm local communities. Transporting fuels from their origins at mines or wells produces air pollution and have frequently caused serious accidents and spills. Burning fossil emit toxins and global warming emissions. The production and transportation waste products are hazardous to public health and the environment. “Understanding these impacts is critical for evaluating the true cost of fossil fuels—and for informing our choices around the future of energy production,” the UCC argues.

ExxonMobil previously announced plans to build and expand manufacturing facilities in the US Gulf region as part of its Growing the Gulf initiative. Strategically investing in new refining and chemical-manufacturing projects in the US Gulf Coast region, the oil conglomerate will soon include 11 major chemical, refining, lubricant, and liquefied natural gas projects at proposed new and existing facilities along the Texas and Louisiana coasts. Investments are expected to continue through at least 2022. This — like so many other ExxonMobil expansion announcements — was  couched in the notion of providing “long-term economic benefits to the region, noting the creation of direct employment opportunities and the multiplier effects of the company’s investments.”

Slower than other fossil fuel companies to join in the clean energy sector, ExxonMobil has obtained contracts for the Permian in West Texas to be fulfilled by Ørsted. (Interestingly, Ørsted had been the Danish state-run oil and gas company before a rebrand and concurrent divestment of fossil fuel assets in 2017.) In late November, 2018, Ørsted outlined that the two 250 MW power purchase agreements (PPAs) with ExxonMobil, called the Permian Solar and Sage Draw Wind projects, will be completed in Q2 2021 and Q1 2020, respectively. Through its US subsidiary Lincoln Clean Energy, Ørsted has developed almost 2 GW of renewable energy projects in California, New Jersey, and Texas.

Ørsted said the combination of solar and wind power supply is designed to maximize the round the clock supply for a corporate client and a sign of “where onshore renewables are heading,” adding that there was scope for “further synergies possible in long-term operations and capex.”

ExxonMobil spends about $1 billion a year on alternative energy research, reports The Independent. Don’t expect any of those projects, which range from algae engineered to bloom into biofuels and cells that turn emissions into electricity, however, to produce any commercial breakthroughs for at least a decade, according to Vice President of Research and Development Vijay Swarup.

The company claims it is “committed to mitigating greenhouse gas emissions within our operations” while it also increases “production of oil and natural gas to meet growing global energy demand.” Here’s what they say they are doing to mitigate GHG emissions.

Should we cheer? The company is suppressing its plan to increase oil and gas production with a nice little nod to renewables. (Editorial comment: I spit on you.)

ExxonMobil is the largest of the six multinational oil supermajors and one of the biggest energy companies worldwide, with operations spanning from oil exploration and production, oil refining, retail gas distribution, power generation, and chemical production. Exxon and Mobil both originate directly from John D. Rockefeller’s Standard Oil Company, merging in 1999 to become ExxonMobil. The 1999 merger between Exxon and Mobil was controversial, as the creation of the world’s largest publicly traded oil and gas company created antitrust concerns. Heavy lobbying helped ensure the merger went through. According to Polluter Watch, ExxonMobil has long enjoyed a close relationship with Congress and draws upon its influence to run commercial operations on federal land.

Let us not forget….

The Carbon Majors Report, prepared by CDP and the Climate Accountability Institute in July 2017, found that just 25 corporations were responsible for 1/2 of all carbon emissions since 1988. ExxonMobil, Shell, BP, and Chevron led the list. The report warned if fossil fuels continue to be extracted at the same rate over the next 28 years as they were between 1988 and 2017, global average temperatures can be expected to rise by 4° C by the end of the century. (Editorial comment: This is a horrible way to control the human population…) Of course, FoxBusiness approved of this settlement, stating that the pollution controls “are estimated to reduce harmful air emissions of volatile organic compounds (VOCs) by more than 7,000 tons per year. The settlement is also expected to reduce toxic air pollutants, including benzene, by more than 1,500 tons per year.”

Great! Right? Should we cheer that such a blatant polluter is reducing its GHG emissions slightly?

Graphic courtesy of Carbon Majors Report

ExxonMobil, the largest publicly traded international oil and gas company, is at a tenuous place in its history. As climate activists take steps to incite policy changes to abate emissions, ExxonMobil finds itself increasingly undermined in its commercial opportunities to monetize fossil fuel reserves, according to research conducted by MRS. As risks to the industry correlate with progress on climate goals,improved links between GHG emissions and extreme weather events will intensify legal risk to companies like ExxonMobil.

What appears clear is that, as effects of climate change grow more pronounced, the industry faces a future that is less accepting of current practices.

Sure, if If ExxonMobil does establish a pattern in which it draws upon clean renewable energy for operations, that would be a step in the right direction. “If we assume they are using it to power their own operations, this type of practice is becoming the norm,” said Colin Smith, a senior solar analyst at Wood Mackenzie Power & Renewables. “Corporations see the lower energy costs or, at the very least, hedge against rising energy prices in order to be more competitive.”

But isn’t the more important story here that Big Oil like ExxonMobil is continuing to expand operations in places like the Permian Basin, thereby exacting an enormous toll on humanity and the environment—from air and water pollution to global warming?

Humanity is at a climate tipping point and faces an urgent challenge: the phase-out of fossil fuels. Despite some progress with improving energy efficiency and advancing renewable energy, as has ExxonMobil announced, we must significantly reduce GHG emissions by mid-century or face severe, irreversible consequences for people, wildlife, economies, and societies across the globe. We must start by calling out fossil fuel companies like ExxonMobil when they portray a new public image of renewable energy awareness without implementing lasting strategic business planning to end fossil fuel drilling.

Tags: Ørsted, Permian Solar, Sage Draw Wind

Carolyn Fortuna Carolyn Fortuna, Ph.D. is a writer, researcher, and educator with a lifelong dedication to ecojustice. She's won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. She’s molds scholarship into digital media literacy and learning to spread the word about sustainability issues. Please follow me on Twitter and Facebook and Google+