WEBVTT - What is the Exxon CEO doing on a climate podcast? 0:00:00.120 --> 0:00:04.960 Welcome to zero. I am Akshatrati. Today Egxon's new tactic. 0:00:17.440 --> 0:00:21.239 An oil CEO walks into a climate conference. No, it's 0:00:21.280 --> 0:00:24.920 not a joke. Actually, these days it's not even an 0:00:25.040 --> 0:00:28.760 uncommon occurrence. But it is still a big deal when 0:00:28.800 --> 0:00:34.880 that CEO is Darren Woods, who leads Exonmobile Corporation. Regardless 0:00:34.880 --> 0:00:37.080 of where this interiview happened, I would have jumped on 0:00:37.120 --> 0:00:41.559 the opportunity. Far too few oil CEOs opened themselves up 0:00:41.600 --> 0:00:45.440 to journalistic scrutiny. That it was at a climate conference 0:00:45.560 --> 0:00:50.199 in Baku, Azerbaijan only made it more interesting. And this 0:00:50.360 --> 0:00:53.360 was not Darren's first rodeo. He became the first Exon 0:00:53.440 --> 0:00:56.360 CEO ever to attend a climate conference at COP twenty 0:00:56.400 --> 0:00:59.800 eight in Dubai last year. When we spoke, it was 0:00:59.800 --> 0:01:02.920 only days since the US election result had come out, 0:01:03.480 --> 0:01:05.959 and Darren had things to say about Donald Trump that 0:01:06.040 --> 0:01:10.000 I wasn't expecting. He also had strong ideas about how 0:01:10.040 --> 0:01:14.280 Eggxon can be a positive force on climate. Now that 0:01:14.360 --> 0:01:17.920 might seem odd. It is among the world's largest oil 0:01:17.920 --> 0:01:22.840 companies and it has increased oil production quite a lot 0:01:22.959 --> 0:01:25.839 over the last few years. There is also a well 0:01:25.840 --> 0:01:30.080 documented history of companies like Eggxon showing doubt about climate 0:01:30.120 --> 0:01:34.520 science to slow down climate action. But something has clearly 0:01:34.600 --> 0:01:54.480 changed and it's worth hearing Darren's take. Welcome everybody to 0:01:54.520 --> 0:01:57.440 a live taping of the Zero Podcast at COP twenty nine, 0:01:57.920 --> 0:01:59.160 and welcome to the show, Darren. 0:01:59.200 --> 0:02:01.559 Thank you. It's good to be so here. 0:02:01.600 --> 0:02:04.440 We are in Baku, And before I get to important questions, 0:02:04.640 --> 0:02:07.280 let me ask you what are you doing for fun? 0:02:07.360 --> 0:02:11.400 While you're in od Zerbaijan. People keep recommending to me 0:02:11.560 --> 0:02:14.079 that I should take a bath in crude oil. It's 0:02:14.120 --> 0:02:17.000 a thing that a famous spa offers over here, and 0:02:17.040 --> 0:02:18.520 I fact checked it and it's real. 0:02:19.440 --> 0:02:22.520 I'm not doing that. I got in last night and 0:02:22.800 --> 0:02:25.640 I'm spending the day here talking to a number of 0:02:25.639 --> 0:02:28.040 people trying to share ex Molble's perspective on how we 0:02:28.120 --> 0:02:31.400 can contribute to this challenge that we're all discussing this week. 0:02:31.680 --> 0:02:35.240 So let's get to business. Then, many people here will 0:02:35.240 --> 0:02:38.720 see Eggxon as a barrier to tackling climate change. But 0:02:38.919 --> 0:02:40.799 you're here at a cop. You're here at a cop 0:02:40.800 --> 0:02:43.160 for the second time, so you clearly don't think so 0:02:43.880 --> 0:02:45.200 why do you come to a cop? 0:02:45.680 --> 0:02:47.680 Well, I think one of the things that's been happening 0:02:47.680 --> 0:02:51.519 over the last several years is the challenge of significantly 0:02:51.520 --> 0:02:55.880 reducing emissions while continuing to meet the growing demand for 0:02:55.960 --> 0:02:59.480 affordable energy is a tough challenge to solve. I think 0:02:59.480 --> 0:03:02.680 the paulice that have been pursued to date are very 0:03:02.760 --> 0:03:05.960 narrowly focused on limiting the supply of traditional sources and 0:03:06.000 --> 0:03:10.840 trying to drive more expensive alternatives. That frankly isn't accomplishing 0:03:10.919 --> 0:03:13.760 the overall objective. If you look at where we stand today, 0:03:14.320 --> 0:03:18.640 oil is that record levels of demand a coal, gasoline, diesel, 0:03:19.200 --> 0:03:21.800 and so I think while wind and solar, elected vehicles 0:03:21.800 --> 0:03:23.919 are going to play a very important role, they're necessary, 0:03:23.960 --> 0:03:27.880 they're not sufficient. We need more solutions. Frankly, as a company, 0:03:28.000 --> 0:03:30.520 we think we can bring those solutions to bear. If 0:03:30.560 --> 0:03:33.119 you look at what we're doing today, we have the 0:03:33.160 --> 0:03:37.400 only large scale carbon caption storage system in the world. 0:03:37.960 --> 0:03:41.080 We've got five customers with almost seven million tons per 0:03:41.120 --> 0:03:45.240 am of contracted storage for CO two. No other company 0:03:45.240 --> 0:03:49.160 in the world has that. We're developing the world's largest 0:03:49.320 --> 0:03:52.600 virtually carbon free hydrogen facility in the US. We've got 0:03:52.600 --> 0:03:56.200 plans to build that if the IRA legislation gets translated 0:03:56.200 --> 0:04:00.520 into regulation. We're developing a new technique for producing lithium 0:04:00.840 --> 0:04:04.640 to supply battery markets. We're doing work on carbon and 0:04:05.000 --> 0:04:07.320 we have an opportunity to build a new type of 0:04:07.400 --> 0:04:11.120 anode for batteries which have the potential to increase battery 0:04:11.120 --> 0:04:14.000 capacity by thirty percent. And so a lot of things 0:04:14.080 --> 0:04:17.239 we're doing across the very broad spectrum of opportunities, leveraging 0:04:17.320 --> 0:04:21.320 our core capabilities to try to help reduce the world's emissions. 0:04:21.600 --> 0:04:25.800 But COP is mainly about countries negotiating over I will 0:04:25.839 --> 0:04:29.480 say laborious text because I've seen some of that text. 0:04:29.920 --> 0:04:33.000 What conversation do you have as a corporate CEO here 0:04:33.040 --> 0:04:35.359 at COP that are beneficial to you as a company. 0:04:35.480 --> 0:04:37.359 Well, I think it's trying to make sure we have 0:04:37.400 --> 0:04:40.440 a good understanding of where people are, what their concerns are, 0:04:40.440 --> 0:04:42.360 where they're focused at. You know, there are a lot 0:04:42.440 --> 0:04:45.560 of ambitions and aspirations that come out of the COP discussions. 0:04:45.880 --> 0:04:47.960 We're very focused on the action and how do you 0:04:48.040 --> 0:04:51.000 go from ambition to plan. So we're trying to help 0:04:51.160 --> 0:04:54.480 provide a perspective from a company in an industry that 0:04:54.520 --> 0:04:58.039 has a very long history of taking ambitious plans or 0:04:58.120 --> 0:05:01.640 ambitious objectives in trans leading those into real war plans 0:05:01.839 --> 0:05:05.000 and ultimately putting steel in the ground and building facilities 0:05:05.000 --> 0:05:05.880 to accomplish them. 0:05:06.279 --> 0:05:08.520 So we are going to unpack a lot of the 0:05:08.520 --> 0:05:11.800 solutions you've talked about, but before we dive deeper into that, 0:05:12.520 --> 0:05:16.120 I think it's worth addressing too elephants in this room, 0:05:16.480 --> 0:05:21.120 Trump and Trust. Let's start with Trump. Do you think 0:05:21.320 --> 0:05:24.920 Donald Trump, he's going to be in his second presidential 0:05:24.960 --> 0:05:27.200 term in the US in January, do you think Donald 0:05:27.200 --> 0:05:29.040 Trump is a threat to global climate action? 0:05:30.040 --> 0:05:32.000 I think you know, if you look at the time 0:05:32.080 --> 0:05:35.719 scale it's going to be required to address this challenge, 0:05:35.880 --> 0:05:37.919 and the way that we think about it is a 0:05:37.920 --> 0:05:40.200 long term investment. There's work that has to be done, 0:05:40.240 --> 0:05:43.600 and so I'm not sure that any one administration is 0:05:43.640 --> 0:05:49.120 going to significantly advance the pace of the transition or conversely, 0:05:49.160 --> 0:05:52.279 significantly slow the pace. I think there's a lot of 0:05:52.279 --> 0:05:54.359 work that needs to be done across the world, a 0:05:54.360 --> 0:05:56.720 lot of sectors that need to be advancing the work 0:05:56.720 --> 0:06:00.720 in this space. Frankly, we need more comprehensive policy, things 0:06:00.760 --> 0:06:04.000 that encourage and tap into the capabilities of companies and 0:06:04.120 --> 0:06:07.720 markets to reduce submissions. We're leaving a lot of opportunity 0:06:07.720 --> 0:06:10.719 on the table today as a global society, as governments 0:06:10.760 --> 0:06:12.479 around the world, there's a lot of work to be 0:06:12.520 --> 0:06:15.160 done here. I don't think we're depending on anyone administration 0:06:15.279 --> 0:06:18.719 or anyone country, frankly, to advance the global objectives. 0:06:18.800 --> 0:06:23.840 So even as the president of the largest economy in 0:06:23.880 --> 0:06:26.200 the world, the second largest emitter, if it's a four 0:06:26.279 --> 0:06:28.840 year term, you're not that worried, But you do want 0:06:28.880 --> 0:06:32.080 to see policies. And we know that Trump pulled the 0:06:32.160 --> 0:06:34.360 US out of the Powis Agreement the first time around. 0:06:34.600 --> 0:06:37.640 He has said that he will do so again. You 0:06:37.760 --> 0:06:41.640 have said that you would see that as a mistake. 0:06:41.839 --> 0:06:43.920 Trump pulling the US out of the Powis Agreement will 0:06:43.960 --> 0:06:46.000 be a mistake. Why would it be a mistake. 0:06:46.120 --> 0:06:47.840 First of all, what I'd say is the world needs 0:06:47.880 --> 0:06:51.960 to find ways to reduce submissions in a thoughtful, constructive way, 0:06:52.080 --> 0:06:54.080 in a consistent approach. We need to do that while 0:06:54.080 --> 0:06:57.159 we're balancing the needs of people around the world to 0:06:57.200 --> 0:06:59.560 have affordable energy. And so we call it the end equation. 0:06:59.640 --> 0:07:01.400 You got to do both. You can't focus on one 0:07:01.480 --> 0:07:03.920 at the exclusion of the other. That's going to require 0:07:03.920 --> 0:07:06.240 a global effort. There's no one country that's going to 0:07:06.279 --> 0:07:08.719 solve this problem. And so I do think in a 0:07:08.800 --> 0:07:12.200 coord that brings together the world community to focus on 0:07:12.280 --> 0:07:15.320 this subjective, which I believe is needed, is an important 0:07:15.320 --> 0:07:18.200 accord in one that countries should stay in. And I 0:07:18.200 --> 0:07:21.040 think the focus out to be not necessarily on pulling 0:07:21.080 --> 0:07:23.800 in and out of the agreement, but finding a constructive 0:07:23.840 --> 0:07:27.000 way to advance the goals of the agreement without compromising 0:07:27.040 --> 0:07:31.200 economic growth, without compromising the growth in people's prosperity all 0:07:31.240 --> 0:07:33.760 around the world. And there is the opportunity to do that. 0:07:33.960 --> 0:07:36.400 I just don't think we've seen the policy manifest themselves 0:07:36.440 --> 0:07:36.920 to achieve it. 0:07:37.000 --> 0:07:40.000 Yet there is also a chance that he doesn't just 0:07:40.120 --> 0:07:42.480 pull the US out of the Paris Agreement, that he 0:07:42.520 --> 0:07:45.640 pulls the US out of the UN Climate Treaty. Now, 0:07:45.880 --> 0:07:49.440 from a presidential perspective, they can't just rejoin a treaty. 0:07:49.480 --> 0:07:51.600 So say there's a new president who does care about 0:07:51.600 --> 0:07:54.960 climate change, who comes to power after Trump, They'll have 0:07:55.000 --> 0:07:56.800 to go to the Senate, And as you know, the 0:07:56.840 --> 0:07:59.280 Senate is really divided, and a likelihood of getting a 0:07:59.280 --> 0:08:02.720 two thousand majority to join a climate treaty seems very 0:08:02.720 --> 0:08:06.360 far fetched right now. So there could be irreversible consequences 0:08:06.440 --> 0:08:09.480 of a Donald Trump election. Does that not wor you? 0:08:10.360 --> 0:08:12.720 I We're very focused on what we as a company 0:08:12.720 --> 0:08:14.760 can do to contribute to this space. We're not a 0:08:14.760 --> 0:08:17.360 political entity, and so I mean I continue to stay 0:08:17.400 --> 0:08:20.040 focused on the long term. We serve global markets. We 0:08:20.080 --> 0:08:22.760 work all around the world, and that's what we're focused 0:08:22.760 --> 0:08:25.640 on doing, is taking our capabilities and contributing. We're doing 0:08:25.680 --> 0:08:28.120 work not only in the US, but in Asia, in 0:08:28.120 --> 0:08:31.480 Singapore and Indonesia, looking for opportunities to help with that. 0:08:31.560 --> 0:08:34.200 And so we'll continue to look for and pursue the 0:08:34.240 --> 0:08:37.600 opportunities where there's a need and a desire for us 0:08:37.600 --> 0:08:38.360 to contribute. 0:08:38.559 --> 0:08:42.040 So if there's more energy transition opportunities outside of the US, 0:08:42.080 --> 0:08:46.000 you already have a global company, you'll pursue those opportunities outside. Yeah, 0:08:46.320 --> 0:08:49.840 let's look at the domestic front. We know under Trump 0:08:49.920 --> 0:08:53.319 last time around, you saw lower corporate taxes. That means 0:08:53.320 --> 0:08:56.400 for corporations, higher profits. He has said he wants to 0:08:56.400 --> 0:08:59.600 cut taxes further and that would mean even higher profits 0:08:59.640 --> 0:09:02.079 than the last time around. But he's also said he's 0:09:02.080 --> 0:09:06.120 going to roll back regulations domestically in the US, and 0:09:06.600 --> 0:09:09.880 you've talked about how having that back and forth that 0:09:10.000 --> 0:09:13.880 uncertainty is bad for business. But do you think the 0:09:13.960 --> 0:09:17.240 higher profits will make up for the regulatory uncertainty that 0:09:17.360 --> 0:09:17.840 is coming. 0:09:18.760 --> 0:09:22.120 Yeah, I'm not sure. I would look at profitability and 0:09:22.320 --> 0:09:25.600 regulatory uncertainty as a plus and a minus, or a 0:09:25.640 --> 0:09:28.319 balancing factor. I actually consider those two very separate things. 0:09:28.360 --> 0:09:32.559 I think there is a role for smart regulation, effective regulation. 0:09:33.240 --> 0:09:37.479 There's also a role to eliminate unproductive and inefficient regulation, 0:09:37.600 --> 0:09:41.560 and so that's a separate category. We're supportive of regulation 0:09:41.640 --> 0:09:43.439 for the industry. We think it's important, but we think 0:09:43.440 --> 0:09:48.000 it's important to have cost effective, productive regulation that's consistent 0:09:48.040 --> 0:09:51.800 to allow business to get businesses a runway to implement 0:09:51.840 --> 0:09:55.599 that regulation. I also believe that spurring economic growth is 0:09:55.640 --> 0:09:58.760 an important element of not only making the economy more successful, 0:09:58.800 --> 0:10:02.040 but then lifting people up and raising their standards are living. 0:10:02.200 --> 0:10:04.960 Can you give some examples of regulations that you think 0:10:05.000 --> 0:10:06.400 are ineffective and should go. 0:10:07.080 --> 0:10:09.120 I think you know, what we're looking for is making 0:10:09.160 --> 0:10:11.840 sure that the intent of the regulation is clear and 0:10:11.880 --> 0:10:14.160 that the regulations are set in such a way that 0:10:14.200 --> 0:10:16.760 you achieve that intent at the lowest possible cost, that 0:10:16.800 --> 0:10:20.079 it's practical that it can be implemented in the timeframe 0:10:20.080 --> 0:10:24.320 that's suggested. But no specific regulations come to mind, any 0:10:24.320 --> 0:10:25.320 specific ones now. 0:10:25.600 --> 0:10:28.880 So one thing that may happen is Donald Trump gets 0:10:28.880 --> 0:10:31.400 a trifecta. You know, he's won the presidency, he's won 0:10:31.440 --> 0:10:33.480 the Senate, Republicans have won the Senate. There is a 0:10:33.600 --> 0:10:36.079 likelihood that they get the House as well, and that 0:10:36.120 --> 0:10:40.040 gives them a mandate which could in principle allow them 0:10:40.040 --> 0:10:42.160 to take actions such as repealing many of the things 0:10:42.160 --> 0:10:45.200 that are there under the Inflation Reduction Act. You brought 0:10:45.240 --> 0:10:47.440 it up, you said, IRA is something that you're looking 0:10:47.440 --> 0:10:50.040 forward to. You're hoping that rules will be settled, the 0:10:50.200 --> 0:10:52.400 tax credits for all kinds of climate solutions that you 0:10:52.440 --> 0:10:56.679 mentioned earlier. Do you think the repeal of some parts 0:10:56.720 --> 0:10:59.280 of the IRA will happen and do you welcome that? 0:10:59.840 --> 0:11:02.520 So let me maybe start with why we think the 0:11:02.559 --> 0:11:05.160 IRA makes sense. And if you look around the world 0:11:05.240 --> 0:11:07.480 and a lot of the climate policies that are being pursued, 0:11:07.920 --> 0:11:10.720 they pick winners and losers, and they choose a technology 0:11:10.920 --> 0:11:14.800 and insist that that then gets pursued. The advantage of 0:11:14.800 --> 0:11:19.760 the IRA was it focused on outcomes carbon intensity. Our 0:11:19.840 --> 0:11:24.480 view was that's if you're going to mandate carbon emissions reductions, 0:11:24.760 --> 0:11:27.400 you ought to focus on the outcomes that you're looking for, 0:11:27.760 --> 0:11:31.760 put in place the regulations to dictate those outcomes, and 0:11:31.800 --> 0:11:35.400 then let companies, individual businesses, the market figure out how 0:11:35.440 --> 0:11:38.360 best to meet those outcomes. And that's what the IRA 0:11:38.480 --> 0:11:40.440 has done. And so we're supported of the IRA and 0:11:40.480 --> 0:11:43.839 that it approached emissions reductions in the right way. And 0:11:43.920 --> 0:11:45.839 what it allowed us to do as a company then 0:11:46.120 --> 0:11:48.840 is basically draw on all of our resources. So we 0:11:48.920 --> 0:11:53.360 are today investing to decarbonize the production of natural gas 0:11:53.400 --> 0:11:56.720 in the permium. I can take that decarbonized natural gas. 0:11:56.760 --> 0:11:58.560 I can move it down a pipeline system that I 0:11:58.640 --> 0:12:01.480 operate that I control the emissions on. I can bring 0:12:01.520 --> 0:12:05.080 it into my facility where I operate and control the emissions, 0:12:05.120 --> 0:12:11.240 and convert that GOPE wanted to zero methane into hydrogen, 0:12:11.360 --> 0:12:13.720 capture the CO two that's released in that conversion, and 0:12:13.760 --> 0:12:17.400 store that so that I get a near zero hydrogen source. 0:12:17.480 --> 0:12:19.920 And I can do that and then qualify for the 0:12:19.960 --> 0:12:22.520 incentives that the IRA has. That's what we like about 0:12:22.559 --> 0:12:26.040 the IRA, and frankly, the IRA reflected what the administration 0:12:26.400 --> 0:12:28.480 felt like the people of America wanted them to do. 0:12:28.720 --> 0:12:31.000 The Trump, as you say, if he gets all three 0:12:31.679 --> 0:12:34.079 the two houses in the White House, he has a mandate. 0:12:34.280 --> 0:12:36.680 He will then interpret what the people of America want. 0:12:36.920 --> 0:12:39.560 And our job is to respond to what work the 0:12:39.559 --> 0:12:41.800 people around the world want. We deliver on the needs. 0:12:41.800 --> 0:12:45.240 We use our capabilities to help address society's needs. We 0:12:45.280 --> 0:12:46.760 don't determine what those needs are. 0:12:46.960 --> 0:12:50.720 But the Inflation Reduction Act you're saying is technology neutral? 0:12:51.880 --> 0:12:54.040 Is it so? Because the tax skurits are different for 0:12:54.080 --> 0:12:58.000 different technologies. Some tax skrates have much more money than others. 0:12:58.720 --> 0:13:03.360 And yes, they are all geared towards reducing emissions, not 0:13:03.480 --> 0:13:07.240 just emissions intensity. They are geared towards reducing absolute emissions 0:13:07.240 --> 0:13:09.920 because they were geared towards the US being able to 0:13:10.000 --> 0:13:12.800 hit its climate goals, which it currently isn't on track, 0:13:13.160 --> 0:13:15.880 but the IRE would have start to put it on track. 0:13:16.080 --> 0:13:19.120 So so why I say it's technology agnostic is it's 0:13:19.120 --> 0:13:22.440 focused on a carbon intensity for say, hydrogen, a carbon 0:13:22.480 --> 0:13:27.880 intensity level right doesn't specify a technology to achieve that level. 0:13:28.200 --> 0:13:31.079 There may be an underlying assumption as to what technology 0:13:31.559 --> 0:13:33.680 you need in order to reach that. But from my 0:13:33.800 --> 0:13:38.080 perspective and what we're advocating for is irrespective of what 0:13:38.120 --> 0:13:40.560 technology you use, if you can achieve that level, you 0:13:40.559 --> 0:13:45.079 should qualify for the credits. So that makes it technology agnostic. 0:13:45.320 --> 0:13:47.920 So let's take the example of hydrogen, because that's something 0:13:47.960 --> 0:13:51.800 that you have worked on quite consistently. So within the IRA, 0:13:51.920 --> 0:13:54.440 there's a tax cred called the forty five V tax Credit. 0:13:55.120 --> 0:13:57.480 Currently there's a lot of back and forth going around 0:13:57.559 --> 0:13:59.439 to figure out what the rules of that tax credit 0:13:59.480 --> 0:14:01.960 would be. Most of the rules right now, if they're written, 0:14:02.280 --> 0:14:06.079 would prefer that that hydrogen is produced from renewable energy only. 0:14:06.520 --> 0:14:08.880 So you take solar and wind power, you put that 0:14:08.960 --> 0:14:12.120 into an electrolyzer, you split water, you create hydrogen. You 0:14:12.160 --> 0:14:15.560 are arguing that there should be another route allowed to 0:14:15.679 --> 0:14:18.560 be counted under those tax credits, which is to take 0:14:18.640 --> 0:14:22.360 natural gas, do carbon capture, So do steam methane reformation, 0:14:22.520 --> 0:14:25.160 convert that into hydrogen capture the CEO to bury that, 0:14:25.680 --> 0:14:29.280 do you think you'll succeed in getting the equivalency between 0:14:29.320 --> 0:14:31.600 what is known as green hydrogen coming from renewables and 0:14:31.600 --> 0:14:33.800 what is known as blue hydrogen that comes from carbonator. 0:14:33.800 --> 0:14:37.000 Actually, if you look at the legislation, it doesn't specify 0:14:37.120 --> 0:14:40.320 a color. Yes, it's the regulations that come from the 0:14:40.400 --> 0:14:43.520 legislation that will then specify how that. But the legislation 0:14:43.680 --> 0:14:47.480 is very focused on carbon intensity levels. The regulations will 0:14:47.520 --> 0:14:50.720 then tell you how you qualify to meet those carbon 0:14:50.760 --> 0:14:53.360 intensity levels. And there are ways to do that today 0:14:53.440 --> 0:14:56.359 to meet high levels or low levels of carbon intensity, 0:14:56.720 --> 0:15:02.120 high tiering within the legislation that doesn't require a color. 0:15:02.400 --> 0:15:05.920 And all we're saying is if I decarbonize my natural gas, 0:15:06.000 --> 0:15:09.400 I spend billions of dollars to reduce the emissions associated 0:15:09.400 --> 0:15:12.320 with production and natural gas, that as a company, I 0:15:12.360 --> 0:15:14.800 should get credit for that. And frankly, that's what you 0:15:14.880 --> 0:15:17.640 want to do. You want to incentivize our industry to 0:15:17.760 --> 0:15:20.720 invest the money to reduce the emissions associated with production 0:15:20.800 --> 0:15:23.560 and natural gas. That's what we're doing today, and what 0:15:23.600 --> 0:15:27.400 we're advocating for is that that reduction gets reflected when 0:15:27.440 --> 0:15:29.960 we're trying to qualify for a credit within the IRA. 0:15:30.200 --> 0:15:32.240 If that happens, which is what I think the intent 0:15:32.280 --> 0:15:35.560 of the legislation was, then that will justify the investments 0:15:35.560 --> 0:15:37.640 that we're making and the investment in the blue hydrogen. 0:15:37.680 --> 0:15:41.400 If it doesn't happen and they want to incentivize green 0:15:41.520 --> 0:15:44.520 hydrogen and electoralizers, we're not in that business. We won't 0:15:44.520 --> 0:15:46.200 make the investments. That's how it'll work. 0:15:46.400 --> 0:15:50.680 It's billed as the world's largest hydrogen plant. How much 0:15:50.760 --> 0:15:52.200 is it going to cost if you do get these 0:15:52.200 --> 0:15:52.880 tax credits? 0:15:52.920 --> 0:15:58.400 A lot, no number, no number for you. Billions here, here's. 0:15:58.200 --> 0:16:00.800 One way to think about numbers. Right this year, in 0:16:00.840 --> 0:16:04.600 the first three quarters, Exon has given shareholders twelve billion 0:16:04.640 --> 0:16:09.920 dollars back in dividends, fourteen billion dollars as shareholder buyback. 0:16:09.960 --> 0:16:12.840 So you're just buying your own stockback. That's twenty six 0:16:12.840 --> 0:16:16.600 billion dollars in the first three quarters. If I calculate 0:16:16.680 --> 0:16:19.360 the cost of this hydrogen plant, it's a few billion 0:16:19.400 --> 0:16:22.280 dollars two three four billion dollars. You could be doing 0:16:22.280 --> 0:16:25.000 that without the tax credits. Why don't you? 0:16:25.320 --> 0:16:28.080 Well, I have a responsibility shareholders, not my money, and 0:16:28.160 --> 0:16:30.320 so my job is a business and this is I 0:16:30.360 --> 0:16:32.760 think one of the challenges that as you look at 0:16:32.960 --> 0:16:36.520 incentivizing all aspects of an economy, we all have different 0:16:36.600 --> 0:16:39.840 roles to play. I take shareholders money, and I have 0:16:39.880 --> 0:16:42.880 a responsibility to generate a return on that shareholder money, 0:16:42.880 --> 0:16:45.040 and so it's critical for me to make sure that 0:16:45.080 --> 0:16:48.520 the investments that I'm making generate return for the shareholders. 0:16:48.520 --> 0:16:50.480 If I can't do that, if I have more money 0:16:50.640 --> 0:16:52.880 than I can productively invest and get a return, I 0:16:52.960 --> 0:16:55.440 have a responsibility to return that money to the shareholders 0:16:55.520 --> 0:16:57.920 so that they can invest in some other company to 0:16:58.040 --> 0:17:01.200 generate a return. So what I'm doing doing is balancing 0:17:01.280 --> 0:17:04.600 across the portfolio. I'm frankly building a business and have 0:17:04.680 --> 0:17:08.800 a strategy that allows me to be successful. And frankly, 0:17:08.840 --> 0:17:12.119 any scenario that you can forecast going forward, if you 0:17:12.160 --> 0:17:14.520 want to take the IA net zero a very extreme 0:17:14.640 --> 0:17:17.800 decarbonization scenario, if you look at the businesses that we've 0:17:17.920 --> 0:17:22.040 established within the company, the core capabilities that we're building 0:17:22.080 --> 0:17:25.240 those businesses on. In that scenario, using the assumptions of 0:17:25.280 --> 0:17:28.000 the IA, I grow earnings and I grow cash flow. 0:17:28.080 --> 0:17:31.080 That's good for my shareholders. I'm responsible for doing that. 0:17:31.119 --> 0:17:33.040 You can take the other extreme and say we don't 0:17:33.040 --> 0:17:35.720 make any progress with the transition. I'm using the same 0:17:35.760 --> 0:17:38.240 core capabilities and I can grow earnings in cash flowd 0:17:38.240 --> 0:17:41.359 with my business, and so what you want. What you need, 0:17:41.400 --> 0:17:45.760 What the world needs is a transition that companies can 0:17:45.800 --> 0:17:48.119 make money in and generate returns on. Otherwise you're not 0:17:48.160 --> 0:17:50.399 going to drive the investment that you need. So I 0:17:50.440 --> 0:17:52.240 think you know what the world I'd be focused on 0:17:52.440 --> 0:17:57.080 is finding ways to profitably manage the transition. Because we 0:17:57.160 --> 0:17:59.959 can't afford to give to give that away, governments can 0:18:00.040 --> 0:18:02.520 afford to pay that and subsidize it in perpetuity. We've 0:18:02.520 --> 0:18:05.960 got to find a market that rewards for decarbonization. 0:18:06.200 --> 0:18:08.960 So take the example of carbon capture, which you talked about. 0:18:08.960 --> 0:18:12.000 You said you have seven million tons per anem of 0:18:12.560 --> 0:18:15.320 contracted carbon capture facility right. 0:18:15.200 --> 0:18:15.919 Now close to that. 0:18:16.040 --> 0:18:19.520 Yeah, Now that is if you took all your emissions, 0:18:19.520 --> 0:18:22.400 which is Scope one, two and three, less than two 0:18:22.440 --> 0:18:26.119 percent of your total emissions. If you exclude Scope three, 0:18:26.359 --> 0:18:29.320 it's still less than ten percent of your total emissions. 0:18:30.200 --> 0:18:33.240 But Exxon has a reputation for getting results, has top 0:18:33.320 --> 0:18:37.200 notch engineers, has the resources. You bought Denberry, a company 0:18:37.200 --> 0:18:40.200 that has carbon dioxide pipelines and that supports a lot 0:18:40.200 --> 0:18:43.560 of your carbon capture business. Are you betting now that 0:18:44.160 --> 0:18:48.200 because of your spend on Denbury, that carbon capture is 0:18:48.800 --> 0:18:51.280 going to be a viable business without subsidies. 0:18:52.160 --> 0:18:54.520 So I would tell you today, if you look at 0:18:54.640 --> 0:18:57.800 the drives to invest in the transition, there aren't any 0:18:57.880 --> 0:19:01.400 market forces or incentives to invest, which is why government 0:19:01.440 --> 0:19:05.359 policy is either mandating or subsidizing. And that's true across 0:19:05.400 --> 0:19:07.960 all the transitions. To go from the system that we 0:19:08.040 --> 0:19:11.120 have today to a less carbon intensive systems is going 0:19:11.119 --> 0:19:13.200 to require money, and it's going to be more expensive. 0:19:13.720 --> 0:19:16.119 And so the trick is to start down that path, 0:19:16.160 --> 0:19:18.800 you've got to drive the cost of technology down. And 0:19:18.840 --> 0:19:21.040 so I would tell you as we've started this business, 0:19:21.080 --> 0:19:24.480 we've leveraged the IRA and the government incentives as a 0:19:24.520 --> 0:19:27.280 catalyst to get started while we work on the technologies 0:19:27.320 --> 0:19:31.280 to lower the cost. But ultimately this has to transition 0:19:31.640 --> 0:19:36.680 away from government subsidies and then to market driven investments, 0:19:36.720 --> 0:19:38.560 because ultimately that's what it's going to take to be 0:19:38.600 --> 0:19:41.320 successful if you want to roll this out across every 0:19:41.320 --> 0:19:42.639 economy around the world. 0:19:43.119 --> 0:19:46.359 But you've done that for other types of hydrocombon technologies. 0:19:46.400 --> 0:19:48.359 You've done it for offshore drilling, you've done it for 0:19:48.600 --> 0:19:52.400 shale technology where you did not have subsidies, you did 0:19:52.400 --> 0:19:54.960 have to take real big risks with the technology, and 0:19:55.040 --> 0:19:58.720 the market rewarded us, and the market reported because you executed, 0:19:58.800 --> 0:20:01.960 you've made the technology viable. And now if I look 0:20:02.000 --> 0:20:05.359 at your per barrel cost of oil over the past 0:20:05.440 --> 0:20:08.680 few years, they've been falling as a result of your 0:20:08.800 --> 0:20:12.879 investments in a technology. So I understand the theory completely 0:20:12.920 --> 0:20:15.480 that if you invest in a technology and you build 0:20:15.720 --> 0:20:18.679 projects at scale, you can drive down the cost. But 0:20:18.720 --> 0:20:22.200 you've done that so far really well for the hydrocarbon 0:20:22.320 --> 0:20:27.320 exploration and extraction technologies. But the set of investments when 0:20:27.359 --> 0:20:30.920 it comes to climate solutions is still very small. 0:20:31.200 --> 0:20:35.119 So nobody will pay you for me. And that's the 0:20:35.160 --> 0:20:38.320 sad fact today is nobody will pay us for emissions reductions. 0:20:38.480 --> 0:20:42.040 I could provide sustainable aviation fuel, but no airline will 0:20:42.040 --> 0:20:43.919 sign a contract with me to provide it because it's 0:20:43.960 --> 0:20:47.320 more expensive than existing aviation fuel. That's the challenge of 0:20:47.359 --> 0:20:50.040 the transition is it's going to be more expensive and 0:20:50.080 --> 0:20:53.600 today the market won't bear that additional cost. And so 0:20:53.760 --> 0:20:56.639 as a company that has a responsibility to invest and 0:20:56.800 --> 0:21:00.239 generate a return, I got to find ways to do 0:21:00.320 --> 0:21:03.280 that without market forces that exist today, without the demand 0:21:03.359 --> 0:21:05.600 or the customer base. That's willing to pay for it. 0:21:05.640 --> 0:21:07.080 That's the challenge in this space. 0:21:07.760 --> 0:21:11.080 And one thing where people could start to pay for 0:21:11.160 --> 0:21:14.600 these solutions, And something that you have argued for over 0:21:14.680 --> 0:21:17.359 a decade is to have a carbon price, a broad based, 0:21:17.400 --> 0:21:21.359 economy wide carbon price. Now, if you look at the 0:21:21.400 --> 0:21:26.640 politics of a global broad based carbon price, it doesn't exist. 0:21:26.880 --> 0:21:29.240 There is no global government that's going to put a 0:21:29.280 --> 0:21:32.240 carbon price at a global level. Even at a national level, 0:21:32.280 --> 0:21:35.040 when many countries have tried to put a carbon price, 0:21:35.080 --> 0:21:38.520