1

Affordable and Clean Energy Recommendations for ExxonMobil

Leah N. Sprague

University of South Florida

MAN 3025: Principles of Management

Dr. K. Doreen MacAulay

December 7, 2022
 2

Table of Contents

Executive Summary ............................................................................................................ 3

Introduction ......................................................................................................................... 4

Goal Summary .................................................................................................................... 4

Company Overview ………………………………………………………………………4

Recommendations…………………………………………………………………………5

Suggested Recommendation ............................................................................................... 7

Conclusion .......................................................................................................................... 8

References ........................................................................................................................... 9
 3

Executive Summary

To ensure access to clean and affordable energy around the world, it begins with changes made

by industry leaders. In this case, ExxonMobil is a leading company in the oil and gas industry, as well as

in petroleum and chemical manufacturing. Produced by these industries are billions of tons of greenhouse

gas emissions, which have a significant contribution to worsening climate change. ExxonMobil

specifically, has announced that they will be striving to meet a net zero gas emissions goal by 2050, and

has already begun implementing strategies such as Carbon Capture and Storage (CSS) that securely stores

gas carbon emissions underground. However, the progression of these implementations and other stated

goals are going at a slower pace compared to their industry competitors, which is why I chose to explore

ExxonMobil as a company that could improve in their purpose of ensuring clean and affordable energy

around the world. Many recommendations could have been made for this company; however, I chose

three that I believe could make a valuable difference. One, changing from the CCS process to the

CarbFix2 method, a project based in Iceland that has found an innovative way to safely store C02

underground and prevent leaks. Two, investing more money into the use of Renewable Natural Gas

(RNG) and using RNG produced from feedstocks. Three, altering their net zero by 2050 goal to include

not only scope 1 and 2 emissions, but also scope 3 emissions which make up for 85 percent of the

companies carbon emissions.

 4

Introduction

ExxonMobil is a leading company in working towards significantly lowering greenhouse gas

emissions. While they may be on the path to engineering multiple ways to provide clean and affordable

energy, compared to their industry rivals they are trailing behind farther than they should be. Exxon

announced they would be working toward a net zero greenhouse gas emissions goal by 2050 and have

stated numerous ways in which they plan to reach this goal. However, based on my research, it seems as

though they have not made as much progress as their competitors and should be putting in more effort to

reach these heights. Exxon needs to make significant changes within their company, specifically energy

extraction, to provide society with energy that is clean, affordable, and safe.

Goal Summary

The Seventh United Nations Sustainability goal, clean and affordable energy, has the purpose of

ensuring “access to affordable, reliable, sustainable and modern energy for all” (United Nations). By the

year 2030, the United Nations anticipates reaching new heights to guarantee access to clean and

affordable energy. Included in this list are targets such as doubling the global rate of improvement in

energy efficiency; enhancing international cooperation to facilitate access to clean energy research and

technology; expanding infrastructure and upgrading technology for supplying modern and sustainable

energy services in developing countries, and as previously stated, creating universal access to affordable,

reliable, and modern energy (United Nations).

Company Overview

ExxonMobil is known to be one of the largest publicly traded international oil and gas companies.

In addition to this, they are also a premier petroleum and chemical manufacturing company. ExxonMobil

also refers to themselves as a low carbon solutions business, which is described as a business focused on

reducing their output of greenhouse gas emissions from hard-to-decarbonize sectors such as commercial

transportation, power generation, and heavy industry (Woods, D. W., 2021). As an industry leader,
 5

ExxonMobil has solid connections all over the world, including in countries such as Guyana, Indonesia,

Papa New Guinea, Qatar, and evidently the United States (Global Operations). As a company that

explores for oil and natural gas on six continents, it is an apparent conclusion that billions of greenhouse

gases are being released into the atmosphere, even with the initiatives that ExxonMobil is said to be

taking to combat the issue.

ExxonMobil has received scrutiny regarding their sizable contribution to climate change, which

led them to announcing their goal to achieve net zero greenhouse gas emissions by 2050 (ExxonMobil,

2022). Throughout this time, they have stated that they will be taking part in several game changing

actions to work toward their net zero goal. As a start, they have indicated that they will be investing

fifteen billion dollars toward lowering greenhouse gas emissions initiatives by 2027.

Carbon capture and storage (CCS) is another action that the company has openly spoke about

partaking in, to considerably lower CO2 emissions. This process is said to be one of the most important,

yet lowest cost low-carbon technologies that involves collecting CO2 emissions and securely storing them

deep underground (Woods, D. W., 2021). Building from this idea, ExxonMobil has announced the

implementation of CCS “hub” concepts where industries who have high emissions of CO2 “can share

infrastructure, enabling benefits of economies of scale” (Woods, D. W., 2021). The company also plans

on including biofuels in their net zero plan to reduce gas emissions from commercial transportation and

developing new technology to lower their annual hydrogen output, which is about 1.3 million metric tons

(Woods, D. W., 2021). ExxonMobil also has the goals of reducing methane emissions by using the latest

technologies and developments, increase the use of renewable diesel, and transforming transportation.

Recommendations

While the carbon capture and storage process has been in practice since 1996, it has associated

risks such as CO2 leaks from the underground reservoirs that could seep into nearby air or water supplies

and natural or human made seismic activity that could create these leaks. These risks present the question

of if this low-carbon technology is truly sustainable. Based on a project being conducted in Iceland called
 6

CarbFix2, there may be an environmentally friendly way of securely storing CO2 underground and

preventing leaks. Compared to the regular CCS process, in this project the CO2 is first dissolved in water

before it is injected into porous basaltic rock underground, which causes the CO2 to react with the rock to

form less harmful calcite and prevent leaks that are more likely to occur when CO2 is injected as a gas

(O’Callaghan, 2018). However, every project has its risks, and for this study it is from the co-capture of

hydrogen sulphide (H2S) that can be poisonous in high concentrations. To avoid this, it is extremely

important to avoid gas leaks in the capture process (O’Callaghan, 2018).

If ExxonMobil chose to adopt this recommendation after safety concerns have been addressed, it

seems as though it would be an easygoing transition from the regular carbon capture and storage process.

To replicate the CarbFix2 project, a substantial amount of basaltic rock would be necessary, however this

is the most common volcanic rock type on Earth’s surface which makes it a resource that is easily

obtainable. Also, CarbFix2 has demonstrated an entire CCS cycle by capturing, transporting, and storing

C02 at 22 euros per metric ton, which is also equivalent to around 22 dollars per ton in the US and less

than half of previous cost estimates (O’Callaghan, 2018). Making this recommendation feasible and more

ecologically sound, compared to the CCS process they have in place today.

Even though ExxonMobil is an industry leader amongst publicly traded oil and gas companies

and have made promises to work toward cleaner and more affordable energy, the strategies they have

implemented or have said they plan to put into effect are lacking specific components that their

competitors have already gotten a head start on. For example, Shell and BP have begun using even more

efficient strategies such as Renewable Natural Gas (RNG). The benefits of the RNG process include a

reduction in CO2 emissions by fifty to 100 percent, generates renewable power, can be transported

directly into an existing gas pipeline system and vehicles designed to use RNG can also use compressed

RNG (Renewable Natural Gas).

If ExxonMobil used RNG produced from feedstocks including animal waste, crops, crop residue,

and food waste, total greenhouse gas emissions would be significantly lowered because raw materials

such as these break down overtime compared to the use of fossil fuels (Renewable Natural Gas). The
 7

RNG process is quite simple and begins with biogas being made from feedstock using anaerobic

digestion, the biogas is processed and converted into RNG which is then injected directly into the gas

grid. Within the ExxonMobil company, most of their emissions are from scope 3 emissions (Gregg, A.,

2022), which includes commercial vehicles and the RNG process can be specifically useful in combatting

CO2 emissions from vehicles (Renewable Natural Gas).

Compared to the previous two recommendations, I believe changing ExxonMobil’s zero emission

goal to include all three scopes of emissions, not just scope 1 and 2 that only specifically cover harmful

gases given off directly by the company’s business would be the most difficult. The scope 3 emissions are

considered indirect emissions from the company and account for most of the company’s emissions,

specifically targeting “the carbon dioxide released by everyday drivers and other end-use customers”

(Gregg, A., 2022). To signify the importance of ExxonMobil including scope 3 emissions in their net zero

emission goal, according to the Securities and Exchange Commission, ExxonMobil reported “… At least

650 million tons of emissions from petroleum sales… compared with “operational” emissions of 112

million tons” (Gregg, A, 2022). This means around 85 percent of Exxon’s 2020 emissions would not be

covered by the net zero plan, which illustrates just how little of a step the company is taking to reduce

their greenhouse gas emissions.

A major cost of including scope 3 emissions in the company’s net zero by 2050 plan is that it

would place a lot of blame onto the company instead of into consumers (Gregg, A, 2022). Including scope

3 emissions in the net zero goal would put Exxon at the same pace as its global rivals, instead of trailing

behind because many of its industry competitors have already begun including scope 3 emissions in their

net zero by 2050 goals and investing more than 20 percent of their budget in renewable and low-carbon

energy (Gregg, A, 2022).

Suggested Recommendation

Based on extensive research, I have concluded that the best recommendation for ExxonMobil

would be to follow in the footsteps of the CarbFix2 project and put themselves in a position where they
 8

are not trailing behind their competitors but paving the way alongside other companies involved in this

research. CarbFix2 has developed a strategy that is working towards reversing climate change and has had

amazing success in creating a permanent solution that the regular CSS does not due to the high risk of

potential leaks. Since Exxon has already begun using the CSS process, I believe it would be the easiest

and most effective recommendation for them to convert to the process the CarbFix2 project has

developed. The cost to implement an industrial scale application of the CarbFix method is estimated to be

less than $25 per ton, which is significantly lower than the CSS process that costs around $52 to $60

dollars per ton (CarbFix 2), (Schmelz et al., 2020). The CarbFix2 project has also incredibly demonstrated

the potential to scale their carbon captures to 100 percent to permanently store CO2 emissions coming

from burning fossil fuels, which I believe would have the greatest impact on the ExxonMobil company.

Conclusion

Thus, ExxonMobil has developed and deployed solutions for clean and affordable energy, yet

they still fall behind their competitors when it comes to implementing these solutions. From my research,

I have found that many of their competitors, including Shell, BP, and other global competitors are far

ahead of them and have already applied a net zero goal to their companies, and have begun developing

new and innovative ways of storing carbon such as the CarbFix2 project. From the three

recommendations I offered, I believe it would be best for Exxon to convert to the CarbFix method due to

its high success, low cost, and promising results. All in all, ExxonMobil is making the correct strides

toward achieving net zero emissions, however they are moving at a slow pace, and the world needs a

method that can provide fast and permanent results.

 9

References

CarbFix 2. Carbfix. (n.d.). Retrieved December 7, 2022, from https://www.carbfix.com/carbfix2

ExxonMobil announces ambition for net zero greenhouse gas emissions by 2050. ExxonMobil. (2022,

January 18). Retrieved December 6, 2022, from

https://corporate.exxonmobil.com/news/newsroom/news-releases/2022/0118_exxonmobil-

announces-ambition-for-net-zero-greenhouse-gas-emissions-by-2050

Global Operations. ExxonMobil. (n.d.). Retrieved December 6, 2022, from

https://corporate.exxonmobil.com/operations/global-operations

Gregg, A. (2022, January 26). ExxonMobil aims for net zero greenhouse gas emissions from operations

by 2050. The Washington Post. Retrieved December 7, 2022, from

https://www.washingtonpost.com/business/2022/01/18/exxon-greenhouse-gas-net-zero/

O'Callaghan, J. (2018, November 27). Storing CO2 underground can curb carbon emissions, but is it

safe? Horizon Magazine. Retrieved December 7, 2022, from https://ec.europa.eu/research-and-

innovation/en/horizon-magazine/storing-co2-underground-can-curb-carbon-emissions-it-

safe#:~:text=One%20major%20concern%20with%20CCS,underground%2C%20known%20as%20

induced%20seismicity.

Renewable natural gas: Shell energy. 100% Renewable Energy Supplier in the Texas Region - Shell

Energy. (n.d.). Retrieved December 7, 2022, from https://shellenergy.com/business/products-and-

services/renewable-solutions/renewable-natural-gas/

Schmelz, W. J., Hochman, G., & Miller, K. G. (2020, August 14). Total cost of carbon capture and

storage implemented at a regional scale: Northeastern and Midwestern United States. Interface
 10

Focus. Retrieved December 7, 2022, from

https://royalsocietypublishing.org/doi/10.1098/rsfs.2019.0065

United Nations. (n.d.). Goal 7 | Department of Economic and Social Affairs. United Nations. Retrieved

December 6, 2022, from https://sdgs.un.org/goals/goal7

Woods, D. W. (2021, November 9). Why we're investing $15 billion in a lower-carbon future.

ExxonMobil. Retrieved December 7, 2022, from

https://corporate.exxonmobil.com/news/newsroom/news-releases/2021/1109_why-we-are-

investing-15-billion-in-a-lower-carbon-

future#:~:text=ExxonMobil%20is%20committed%20to%20helping,working%20on%20advancing

%20decarbonization%20solutions.