Providing further evidence – as if there was any need – that ESG investor groups can never be satisfied, ExxonMobil is again facing attack from activists because ExxonMobil is not doing enough, despite being on the right track to address them Achieve 2025 goals previously urged by the same activists to adopt.
A group called the Coalition for a Responsible Exxon or “CURE” (no idea where the “U” came from) is upset that Exxon is doing what it needs to do to meet its overall goals, including planned investments in $ 15 billion in green energy initiatives, failed to set “segment-specific reduction targets for Exxon’s midstream and downstream businesses” this year. For this alleged “failure”, CURE awards the company’s new board of directors – which includes activist investors supported by ESG activist group Engine No. 1 – a grade D-minus for the year and calls for the sacking of CEO Darren Woods despite the company’s excellent financial performance in 2021.
The most predictable thing in today’s energy world is knowing that the CURE activists will move the goalposts one more time and give the board a D-minus if Exxon management complies with that request and does it in the next year or two, or perhaps generously on one Raise D and repeat her call for the CEO to be dismissed. Because that’s exactly what these ESG investor groups do. Given that they are consistently rewarded by management for using such tactics, they have no reason to change behavior that works.
CURE’s announcement came days after Exxon announced that its subsidiary Esso Petroleum Company had entered into a MOU with SGN and Macquarie’s Green Investment Group (GIG) to “explore the use of hydrogen and carbon capture, emissions in the industrial cluster Southampton. âA publication by the three potential partners estimates that the cluster’s potential annual hydrogen demand could be 37 TWh by 2050, which is enough to meet the heating needs of 800,000 households in southern England. The Southampton cluster is home to Exxon’s Fawley complex, the largest refinery / petrochemical complex in the UK.
Joe Blommaert, President of ExxonMobil Low Carbon Solutions, said, âHydrogen has the potential to give customers access to affordable, reliable energy while minimizing emissions. We are excited to be part of this collaboration that will include a technical study to evaluate the potential of the Fawley facility to play a key role in both hydrogen production and carbon capture and storage solutions. With well-designed policies and regulations, hydrogen can help reduce emissions from the Southampton industrial area, which provides essential products for modern life. ”
The Southampton project is part of the company’s growing range of planned and future CCS projects around the globe. I previously wrote about Exxon’s plans for a huge $ 100 billion project in the Houston area. This project would capture emissions from the largest industrial facilities in the region, many of which are along the Houston Ship Channel, and store them in underground caverns, depleted oil reservoirs, and other open pores along the Texas and Louisiana Gulf Coast. This project has the initial goal of capturing and storing 50 million tons of carbon annually by 2030 and gradually increasing this goal to 100 million tons per year by 2040.
The company also has active CCS operations at its Labarge, Wyoming facility and recently announced plans to expand this facility, which is already the largest in the world by volume. In addition to the existing operations in Qatar, Blommaert and its Low Carbon Solutions business group already identified potential global targets in Canada, the Netherlands, Scotland, Singapore, Russia, France, Belgium and Singapore for future CCS operations this year.
The company is already the largest consumer of carbon dioxide on earth, but one thing we know for sure, no matter how many future projects it announces and carries out, and no matter how many annual or decadal emissions targets it hits, it will never be enough for activist groups like CURE. These announcements and achievements are always faced with new and expanded requirements, bad marks for the board of directors, and renewed calls for the CEO to be dismissed.
It’s all gotten so very tiresome and predictable. On the flip side, oil and gas company management teams, on the other hand, may value predictability over any other single factor in planning their business. So maybe CURE is doing Exxon a strange and unintentional favor.