Exxon Mobil (XOM) will “pace” spending on low-carbon projects because there were not enough customers willing to buy products such as hydrogen and biofuels, and that climate policies designed to support decarbonization “frankly aren’t working,” CEO Darren Woods told the Financial Times in an interview Sunday.
Woods said assumptions the company made when setting a $30 billion capital spending budget for “low emissions opportunities” to 2030 last year have not been met, Woods told FT, “so we’re going to pace that spending based on how quickly the market and policy transitions evolve.”
Government regulation on carbon emissions was “very reminiscent of centrally planned economies – think North Korea, East Germany, the Soviet Union, Cuba – that is the feature of how this whole problem is being tackled today: government dictating what the solution needs to look like,” the CEO said.
Using biofuels as an example, Woods said Exxon (XOM) “could be bringing bio feeds into [existing] refineries and making lower carbon biofuels using the existing kit we have. That is the right answer for society because it’s available today. It’s lower cost and it leads to quicker decarbonization… but policymakers around the world have excluded the ability to do that. So we can’t make those investments to convert those units because policy is not supportive. It doesn’t count that as an emissions reduction step.”
Woods said he unsuccessfully urged President Trump to keep the U.S. in the Paris climate agreement, telling FT that he believes “having the U.S. at the table debating the appropriate solutions to reduce emissions without compromising economic growth, without impacting the standards of living of people around the world is a useful voice to have in the room.”
The CEO also said Exxon (XOM) is close to lifting the force majeure in Mozambique that has hindered progress on the Rovuma LNG project, and will move forward “fairly quickly” with a final investment decision on the project once the force majeure has ended.