HOUSTON (ICIS)–ExxonMobil expects that its
pipeline of sustainability projects that
targets third parties will start making
significant contributions to earnings after
2027, the chief financial officer off the
US-based major said on Wednesday.
In all, ExxonMobil is pursuing more than $20bn
in lower emission investments in 2022-2027, of
which half is focused internally and half is
focused on reducing third-party emissions.
“We don’t yet see in 2027 really material
earnings come from this third-party spend
because it takes a while to actually ramp up
the execution,” said Kathy Mikells, senior vice
president and chief financial officer. She made
her comments during an update about the
company’s corporate plan.
“Much more of the earnings and cash flow from
the investments that we’re making in this plan
period actually start to come in the period
By 2030, these investments should generate 15%
returns and cut third-party emission by more
than 50m tonnes/year, ExxonMobil said.
In prepared remarks, ExxonMobil CEO Darren
Woods said the company’s low carbon investments
have the most potential for growth, albeit one
exposed to uncertainty stemming from government
policy and the strength of companies’
commitments to reducing emissions.
CARBON CAPTURE AND BLUE
HYDROGENFor carbon capture, the
US Inflation Reduction Act (IRA) has been the
primary driver for the market, Woods said.
However, ExxonMobil is pushing for market
forces to replace government regulations as the
main driver for the industry.
The IRA was effective to stimulate and catalyze
the market, Woods said. “But long term, we’ve
got to move to market forces. That’s what we’re
With that in mind, ExxonMobil is striving for
its carbon capture business to be the lowest
cost in the market, Woods said.
ExxonMobil now has the largest CO2 pipeline
network in the US following its $4.9bn
Denbury. It now operates a 1,300-mile CO2
pipeline network with access to more than 15
onshore CO2 storage sites. The company has
the potential to profitably reduce more than
100m tonnes/year of emissions.
ExxonMobil signed three commercial
agreements to capture and store up to 5m
tonnes/year of carbon dioxide (CO2) from the
fertilizer, industrial gas and steel
awarded a contract for its carbon capture
and blue hydrogen project in Baytown, Texas.
ExxonMobil could make a final investment
decision (FID) on the project in 2024.
Operations could start in 2027-2028.
EXTRACTIONExxonMobil has started
first phase of a lithium project in the
Smackover formation in Arkansas state, with
output targeted for 2027.
By 2030, the company could produce enough
lithium to supply 1m electric vehicles per year
by 2030. The company will use conventional oil
and gas drilling methods to access lithium-rich
saltwater. ExxonMobil will then rely on its
experience in refining and extraction to
separate the lithium from the saltwater.
ExxonMobil’s focus on brine extraction
distinguishes it from other companies that are
relying on ore mining in the US.
Woods said ExxonMobil’s process will place it
on the lefthand side of the supply curve,
making the company the market’s low-cost
ExxonMobil’s Canadian affiliate, Imperial
Oil, said in January that it would move
forward with construction of a
20,000 bbl/day renewable diesel project at
its Strathcona refinery near Edmonton,
Alberta province. The plant will use a
proprietary catalyst to convert blue hydrogen
and renewable feedstock into diesel.
ExxonMobil has 12 biofuel projects under
development with an average expected return
that exceeds 20%. These projects involve
co-processing, bio-blending and asset
The company is working to supply 40,000
bbl/day of lower-emission fuels by 2025.
INTERNAL PROJECTSOut of
ExxonMobil’s $20bn in lower emission
investments, half are focused on reducing
ExxonMobil expects to reach net-zero
emissions in its oil and gas operations in the
Permian Basin by 2030.
It should reduce methane emission intensity
from its assets by 70-80% by 2030.
STRATEGYFor all of its
low-carbon businesses, ExxonMobil is not
pursuing projects that will require the company
to develop new capabilities, Woods said.
“Instead, we are looking for opportunities
where our existing capabilities, our existing
competitive advantages can be leveraged into an
Carbon capture and lithium brine extraction
makes the most of the company’s upstream
business. Blue hydrogen takes advantage of
ExxonMobil’s natural gas and chemical
businesses. Once the lithium brine emerges from
the ground, ExxonMobil will rely on its
refining knowledge to produce a final product
that can be used in EV batteries.
The large capital commitments and constrained
time frame will make it challenging for small
start-up companies to meet society’s demands
for lower emissions, Woods said. “The world
needs companies like ExxonMobil with our size
and capabilities to actually make progress.”
Focus article by Al Greenwood
Thumbnails shows ExxonMobil. Image by