A recent article from Bloomberg, carried by Rigzone, describes Exxon/Mobil Corporation’s (Exxon) plan to continue investing in and developing oil and gas resources well into the future. This is welcome news, as Exxon is right that oil and gas will be needed for a very long time, not just for transportation fuels and to generate electricity, but for other uses as well.
The article, “Exxon Says Demand Makes Case for Fossil Fuel Growth,” reports on the company’s promise to continue pursuing growth in their oil and gas projects between now and 2050, with no plans to slow or halt investments or operations.
Bloomberg reports that Exxon “is not concerned with ‘chasing the narrative of the week’ but will invest in oil and gas projects that it believes will be needed for decades to come.”
“Upstream” in this context means exploration, drilling, and production, so this is heartening to hear from Dan Ammann, president of Exxon’s upstream division. Exxon is not planning any reductions, Bloomberg reports, instead the company will “double its sales of liquefied natural gas by 2030 and is investing heavily in oil growth in Guyana and the Permian Basin.”
Ammann said the company is forecasting that energy demand is going to continue to grow, and that refusing to divert from its core business of oil and gas development and sales for climate reasons has worked out well for Exxon. He said that for companies that chose to declare their commitment to reducing carbon dioxide emissions, there was “literally no math you could do to suggest that was a good idea.”
Ammann and by extension Exxon are correct on multiple fronts.
On the climate side, greenhouse gas emissions are not leading to catastrophe necessitating the abandonment of fossil fuels. As Climate Realism demonstrates every week; extreme weather is not getting worse, crop production is improving globally, and there are many reasons to be skeptical of the pushes for rapid geoengineering projects to “fight” the non-issue that is global warming.
Fossil fuel consumption at the global scale is still growing. Though green activists will claim that renewables are overtaking oil, gas, and coal, data shows that renewables are being added to the mix, but the overall consumption of all energy is increasing. The “share” of electricity production by source doesn’t matter when all electricity production is increasing. (see figure below)
Anyone claiming that fossil fuels are going out of vogue any time soon is wish-casting and not reporting on reality.
A recent report called ‘Energy Delusions,’ published by a former chief of the International Energy Agency (IEA) discussed these facts in detail. It outlines how many green activists, including the IEA itself in recent reports, greatly overestimate the future popularity of electric vehicles, and ignore things like increasing demand from the petrochemical industry.
As western nations’ governments virtue signal about decarbonization, other parts of the world are not so eager to follow that path. Places like Africa, far from abandoning development, are expanding oil exploration and are taking advantage of their natural fuel resources. Indonesia has pledged to increase their coal consumption. China, while claiming to be green, shows with new coal-fueled power plants opening each week that it has no intention of abandoning coal.
Even if production for electricity use was declining — its not with the rapidly developing AI industry driving a growth in demand — there are countless other ways oil, gas, and coal are used in modern economies. Fossil fuels are necessary to maintain high yields of crops, because of their use in the production of fertilizers and pesticides, as well as fuel for tractors and other equipment that makes harvesting from large swaths of land in a timely manner. Industrial processes depend on a variety of petrochemical products, and the production of steel, cement, and other vital ingredients for modern infrastructure would not be possible without oil, its refining byproducts.
In terms of affordability for electricity, conventional gas and coal are both still less expensive than their proposed replacements of wind and solar. The latter’s popularity is largely boosted by government subsidies and mandates, and not market demand. To imagine that they will soon eclipse fossil fuels, and that energy companies should abandon those traditional resources for them, flies in the face of the reality of what it takes to keep the electric grid functioning reliably and to move people and goods across long distances in as short a time as possible.
Exxon expressed similar sentiments in the past; in 2023 a spokesperson said that while net-zero by 2050 might be a popular idea, it is “highly unlikely that society would accept the degradation in global standard of living required to permanently achieve” it. Based on the evidence around the world of riots and protests when fossil fuels prices and food prices go up due to government climate policies or when shortages arise, resulting in electoral shifts, this is clearly true. It is heartening to see that Exxon is holding firm to this realistic perspective, despite massive pressure via lawfare and bad press to do otherwise.
Exxon should be applauded for not “chasing the narrative of the week,” as they put it, and instead continuing to invest in reliable resources that the world will continue to need for reliable energy and vital products for the foreseeable the future.
