{"id":8512,"date":"2016-11-03T16:17:12","date_gmt":"2016-11-03T20:17:12","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/exxonmobil-carbon-capture-and-the-fight-to-stay-relevant\/"},"modified":"2016-11-03T16:17:12","modified_gmt":"2016-11-03T20:17:12","slug":"exxonmobil-carbon-capture-and-the-fight-to-stay-relevant","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/exxonmobil-carbon-capture-and-the-fight-to-stay-relevant\/","title":{"rendered":"ExxonMobil: Carbon Capture and the Fight to Stay Relevant"},"content":{"rendered":"

Word Count: 739<\/p>\n

ExxonMobil, the largest non-governmental energy company in the world, has been at the center of various climate change conversations. Founded a century and a half ago as Standard Oil Company, the energy giant has played key roles in providing fuels to power numerous mechanical engines that were at the heart of many technological advancements throughout this period. Not surprisingly, this era of heavy fossil fuel use to power our lives has coincided with the era in which the rapid warming of our planet is taking place. ExxonMobil is in the business of extracting oil & gas from depths underneath the earth\u2019s crust. The company then directly sells some these commodities at the world oil market while a substantial portion is refined at numerous company-owned refineries. Refined products, including gasoline, diesel, kerosene, among others are then sold to consumers at filling stations around the world. Processed gas is used in thermal plants to generate electricity, and also used in industrial settings to manufacture products such as fertilizer.<\/p>\n

In 2014, 52% of global total primary energy supply came from oil and natural gas. This usage amounts to the generation of 7,124 million metric tons of CO2e1<\/sup>. An additional 29% of energy supply came from coal. As expected, the amount of greenhouse gas (GHG) emitted from these sources of energy has attracted the attention of scientists and government agencies who see an opportunity to place tight regulations to help curtail GHG emissions. Several North American states and provinces, together with some European countries have imposed their own cap and trade regimes in order to reduce the environmental impact of GHGs. A general trend away from coal, the dirtiest<\/em> of all thermal fuels, in developed countries is actually leading to a rapid increase in the number of gas-fired power generating plants. It also helps that global natural gas prices are currently very low, making natural gas competitive against coal. Exxon, as a major natural gas producer, benefits from this regulatory and market dynamic.<\/p>\n

\"powerplant\"<\/a><\/p>\n

On the flip side, renewable sources of energy are becoming economically viable relative to traditional energy sources. Exxon will suffer declining demands for oil & gas if these renewable energy options continue to make giant strides in the power generation market. In the transportation sector, incremental inroads have been made in producing fuel efficient vehicles, and developing electric cars. Because the dominant modes of transportation still depend on traditional fuels, the demand for Exxon\u2019s refined products will hold steady for much longer.<\/p>\n

In an effort to drastically reduce (up to 90%)2<\/sup> the amount of CO2 released from power plants, Exxon has decided to focus on developing carbon capture and sequestration (CCS) technology. With CCS, CO2 output from power plants is captured, compressed and injected into geologic formations for permanent storage3<\/sup>. Since a majority of the world\u2019s carbon emission comes from fossil fuel power plants, the implementation of CCS has the potential to make a massive positive impact on the planet. In oil and gas production, CO2 gas is often reinjected into production wells to enhance oil recovery. By using captured carbon in this manner, Exxon has found a way to utilize a resource that would otherwise remain unused.<\/p>\n

To expand its market and to further help reduce global climate change problems, Exxon should consider investing in gas processing facilities, especially in emerging economies. Today, many developing countries are still heavily reliant on coal for electric power generation. These regions have large coal deposits and do feel that it\u2019s the cheapest energy source within their grasp. Well, natural gas resources are widely distributed across many regions of the globe, but extracting and locally processing this fuel is necessary in order to encourage regional utility companies to switch from using coal to natural gas. In Nigeria, for instance, massive quantities of natural gas are extracted, usually as byproduct of oil production, and the lack of gas processing facilities has led to the regular flaring of a precious fuel source. A substantial number of gas-fired power plants will spring up in the country if entrepreneurs believe that they would have a regular supply of fuel for their operations. If this development were to happen, the use of dirty coal will be minimized and ordinary citizens will not even have to cut down trees in order to obtain firewood for cooking. Electricity demand is very high and Exxon can be rest assured that there would be a strong market for its processed gas products.<\/p>\n

 <\/p>\n

References<\/strong><\/p>\n

1<\/sup> HBS Case N2-317-032, \u201cClimate Change in 2016: Implications for Business,\u201d October 14, 2016, Exhibit 5<\/p>\n

2<\/sup> \u201cWhat is CCS?\u201d http:\/\/www.ccsassociation.org\/what-is-ccs\/, accessed November 3, 2016.<\/p>\n

3<\/sup> \u201cDeveloping cutting edge technology – carbon capture and sequestration,\u201d http:\/\/corporate.exxonmobil.com\/en\/technology\/carbon-capture-and-sequestration\/carbon-capture-and-sequestration\/energy-promise-of-ccs, accessed November 3, 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

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