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Climate change is a pressing global issue that demands immediate attention, but it is not the only challenge the world is facing.
Another equally crucial global challenge is the need to ensure the production of affordable energy to enhance living standards worldwide, according to ExxonMobil Chairman and CEO Darren Woods.
Speaking at the ADIPEC CEO Summit Woods said three billion people still lack access to modern living standards, while many remain trapped in extreme poverty without electricity or clean cooking fuels.
“The global North-South divide will only be bridged when we commit to solving the world’s energy and emissions challenges simultaneously. Oil and gas are at the center of both. Combusting them is a leading source of man-made greenhouse gas emissions. That’s the societal cost, and it’s real”, Woods said, according to a transcript on Exxon Mobil’s website.
In his address, Woods called on the governments of Asia-Pacific, and elsewhere, to embrace constructive policy to encourage the shift to a lower-emissions future.
“As a business leader who spends his time solving challenging large-scale problems, I’d like to suggest, some guiding principles; don’t pick winners and losers, don’t focus on an answer that fails to solve all aspects of the problem, for really complex issues like climate change… keep all viable solutions in play – even if they don’t align with your beliefs or ideology. And, most importantly, leverage the power of competitive markets,” Woods said.
Wood claimed contrary to popular belief, the passenger vehicle sector, which often garners significant attention, contributes only 10 percent of energy-related carbon dioxide (CO2) emissions. The majority, over 80 percent, stems from commercial transportation, heavy industry and power generation, Woods said.
Woods added that while wind and solar energy play a crucial role in providing low-carbon electricity, they fall short in decarbonizing these hard-to-reach sectors. To truly address emissions, an extensive range of solutions need to be explored. While renewable energy remains essential for achieving net-zero goals, it alone cannot solve the emissions challenges faced by industrial sectors that form the backbone of modern societies. ExxonMobil is actively pursuing technologies that can, Woods said.
“Consider carbon capture and storage, where we capture emissions at the source, transport them by pipeline and permanently store them deep underground,” Woods said.
He highlighted that in the last year alone, ExxonMobil signed carbon capture and storage agreements with a steel company, a fertilizer company and an industrial-gas company. “These three projects alone, will reduce CO2 emissions by the same amount as replacing 2 million cars with EVs. This is roughly the total number of electric vehicles on U.S. roads today,” he said.
The company has also secured exclusive rights to CO2 storage in Indonesia and Malaysia. “With the right policy, we can create regional solutions for many of the industrial economies in Asia that don’t have large geologic formations suitable for storage”, Woods said.
Let Companies Compete
Speaking on the way forward through the energy transition, Woods called on the world to get real many ideas currently being put forward to accelerate the energy transition are not based in the economic, technological or political reality, and very often can have a negative impact.
“We cannot replace overnight an energy system that took 150 years to build. The size and complexity are simply too vast,” he said, adding that the solutions to climate change have been too focused on reducing supply.
At the moment, net zero by 2050 remains an aspiration. The Intergovernmental Panel on Climate Change and the International Energy Agency have made clear that the world is not on the path to meeting the goals of the Paris Agreement.
According to Woods, the course of action needs to include supportive public policy, significant technology advancements and a smooth transition from government subsidies to market-based mechanisms.
“Market incentives for carbon reduction like a price on carbon, or policy incentives such as the U.S. Inflation Reduction Act, will drive innovation and engage all relevant players – leading to better solutions, faster,” he said. “We should allow technologies and companies to compete – and let the best solutions win”.
Collaboration is key, Woods stressed noting that in simple terms, governments fund research, universities and labs on technology advancement, and companies develop and deploy these technologies.
“And we need an all-of-the-above approach. It’s far too early in the process to rule out any technology. The final element critical to long-term success is market-based mechanisms,” Woods said.
To contact the author, email andreson.n.paul@gmail.com
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