November 12, 2025 • 45 mins
Most oil company CEOs have turned their back on COP30, but not ExxonMobil CEO Darren Woods, who this year attended his third COP conference in a row.
This week on Zero, Akshat Rathi asks Woods why Exxon is backing a new carbon accounting idea, what his plan is now that the Inflation Reduction Act has been gutted, and why Exxon wanted the US to stay in the Paris Agreement.
Explore further:
- Zero’s 2024 interview with Darren Woods
- Sign up to the Bloomberg Green newsletter for daily coverage of COP30.
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd. Special thanks to Eleanor Harrison Dengate, Siobhan Wagner, Sommer Saadi and Mohsis Andam. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to zero. I am Akshatrati Today Egxon at COP thirty.
(00:20):
It's been a year of bad news for climate policies.
The biggest force has been Donald Trump, who, in his
second term as US president, has systematically dismantled climate action
at home and made concerted efforts to attack climate initiatives abroad.
He has championed fossil fuels and single handedly slowed down
the energy transition, at least in the US. Trump's actions
(00:45):
have also given license to many to ignore and deny
climate change. But the CEO of Exon Mobile, Darren Woods,
isn't quite following suit. Darren spears the CEOs of other
international oil companies have stopped coming to COP climate summits,
but Darren came to a side event here at COP thirty,
(01:06):
his third COP in a row. For context, Egxon is
one of the world's largest oil and gas companies, and
Darren is in charge of overseeing its operations and what
areas of the energy transition the company pursues or ignores.
Last year, at COP twenty nine in Baku, I got
a chance to ask him questions about how Egxon, which
(01:27):
has a long history of sowing doubt about climate science
can be trusted to now be acting in good faith
to tackle climate change. I quized him on Exon's lobbying
efforts on the oil industry's favorite climate solution, carbon capture.
I also talked to him about the millions of dollars
Exon spent advertising algaebio fuels without ever scaling up the
(01:48):
technology for commercial use. If you haven't listened to that conversation,
I recommend that you do. We link the episode in
the show notes because this year I wanted to ask
him different questions and follow up on some of the
answers he gave me last year. Why is EGXON backing
a new carbon accounting idea which many climate advocates worry
(02:08):
is yet another delay tactic. What is his plan now
that many of the tax credits under the Inflation Reduction
Act for low carbon solutions have been gutted? And how
is he planning to deal with the tactics that Trump
is using to go after businesses, the same tactics that
could be weaponized against his industry by a future administration.
(02:30):
As you will hear, it was a good conversation with
a healthy amount of disagreement. These are the kinds of
conversation I'd like to see happen more often where we
aren't questioning the accepted science of climate change, but debating
the ways in which we should act quickly. Welcome back
(02:51):
to zero, Darren.
Speaker 2 (02:51):
It's good to be back.
Speaker 3 (02:53):
So.
Speaker 1 (02:53):
I know your schedule is always very tight.
Speaker 2 (02:55):
Yeah, but you are in Brazil.
Speaker 1 (02:57):
Have you been to the Amazon ever before? Have you
been to a rainforest before?
Speaker 2 (03:01):
I've been to a rainforest before, but not the Amazon.
Maybe next time, maybe, next time. Yeah, I like that.
Speaker 1 (03:06):
So it's been a year since Donald Trump's election. He's
been in office for ten months and there's been a
radical shift in policies, obviously in the US, away from
climate action and in favor of fossil fields. What changes
have you liked?
Speaker 3 (03:23):
Well, I think, to me, what I focus on is
the dialogue that's occurring in the fact that there's a
debate and I'd say a challenge to some of the
paradigms that have been established as to how best to
accomplish this objective. If you think about the whole effort
in this space, it's been defined, frankly by a set
of solutions that have been proposed by a lot of
(03:46):
ideologues primarily on the left, that this is the way
we're going to solve the problem with this set of solutions.
And I think unfortunately the problem and the challenge of
climate change has then been defined by this solution set,
and either you're for these solutions or against. And I
think what we need to do is focus less on
the proposed solutions. Some of them are valid and have merit,
(04:08):
and they're necessary, but they're not sufficient.
Speaker 2 (04:10):
We need a broader aperture, and so less.
Speaker 3 (04:13):
Focus on that set of solutions, more focused on the
opportunity to address the real challenge here, which is emissions.
And so I actually like the fact there's a debate
going on both sides of the argument. And I think
generally speaking, when you have people debating about how best
to achieve an outcome or to balance one challenge or
(04:33):
issue with the other challenges and issues, that's an important
dialogue and debate to have.
Speaker 2 (04:38):
And I feel more that's happening today in the US
and in the past.
Speaker 1 (04:41):
Well, there are ideologues on the left, but there are
idea logues on the right too, because.
Speaker 2 (04:45):
Are on both sides. Absolutely many of.
Speaker 1 (04:47):
The things that have happened under the Trump administration are
things that the oil and gas industry as a whole
doesn't like. You know, the API came out in support
of keeping the greenhouse gas reporting, which the EPA wants
to get rid of, for example. But you told me
last year that you liked a lot of what was
there in the Inflation Reduction Act, and obviously under the
Trump administration that's been gutted, almost all of the incentives
(05:10):
that were there are gone. Does that change your thesis
on the investments that you were looking forward to making
and all sorts of low carbon solutions like carbon capture,
like hydrogen.
Speaker 3 (05:22):
So I think what we talked about last year is
what we've been very focused on is how can we
contribute to the challenge of emissions and reducing emissions based
on our capabilities and our core competitive advantages. And that's
very much focused on the molecule side of the equation,
so carbon capture and storage, low carbon or virtually carbon
free hydrogen, biofuels. We ended up moving into lithium based
(05:44):
on our ability to process produced water, brine water, all those. Frankly,
if you look at the changes the Trump administration is
made to the IRA have not reduced the incentives for
those but I will tell you that as you look
at those different areas that were focused on, always said
that our investment in the space was a function of
good policy policy that incentivizes that in the short term,
(06:07):
but very importantly for markets developing and for there to
be a customer demand, because ultimately any of these policies
to be successful are going to have to evolve into
market driven forces. Government can afford to subsidize these solutions
in perpetuity, and so markets have to develop, and technology
needs to evolve so that we can get the cost down,
because today in some of these areas the cost are
(06:30):
too high for the long term, and so those three
things have to happen. They have to improve, and we're
going to pace the investments associated with what we see
in the development there. Frankly, with our largest project, the
Baytown Blue Hydrogen project, one of the big challenges there
is customers buying the product, and so we are potentially
going to pace that based on our ability to sign
(06:50):
customers up, much less a policy issued in that case.
Speaker 1 (06:54):
But you started by saying, in terms of getting climate
solutions or solutions that would reduce a missions being technology neutral,
starting point having policies is helpful. In the US, you
get this swing to the left and to the right.
How much does that war do you well?
Speaker 3 (07:11):
Your point about their ideologues on either side of the
aisle is I definitely agree with that. That's why we
shouldn't be trying to solve this problem through ideology. I mean,
ideology only takes you so far and then you hit
the reality of the real world and need to practical
constraints and how you manage through those. And I think
from our perspective, we're trying to keep a very clear
view on what is the problem statement, which is trying
(07:33):
to find ways to productively reduce emissions that don't slow
economic growth, they don't impact people's standards of living, find
ways to do that based on what we're good at
and achieve both. We refer to it as the end equation,
and we're absolutely convinced that we can do that. And
that dialogue that I have and the work that we're
doing is consistent whether it's you know, a left administration
(07:54):
or a right administration, or whether it's an ideologue or
somebody who center. The foundational fundamental of how we address
this issue over time do not change with political cycles
or who get selected.
Speaker 1 (08:06):
You told me last year that given the scale of
the energy transition, no single president in any country can
do much to detail or to accelerate the energy transition.
Do you still feel the same given how effective Trump
has been at stifling clean energy projects. This is not
(08:26):
just clean hydrogen projects, but also carbon capture projects. Obviously
lots and lots of offshore wind projects that were canceled.
Are you still of the same view that one president
cannot shift the pace of the energy transition?
Speaker 3 (08:42):
What I would say is the energy industry, the basis
on which we make decisions, the time frame that those
decisions play themselves out, and the duration of those investments
exceed any political cycle. So my point is that we
have to look beyond the political cycle in terms of
making these decisions. I think one of the things the
(09:02):
Trump administration is challenging is a parameter that frankly has
not been given the intention it needs, which is the
affordability of these things. And you know, is it a
productive use of money? You know, the challenge today is
there's not a policy banker around that can tell you
what is the cost for the benefit of a ton
of carbon removed? And every government has its constraints and limits.
(09:23):
Every organization has its constraints. We don't have unlimited budgets,
and so I think every government around the world should
be focused on how do you get the biggest bang
for the buck. How do I remove the most emissions
for the least spend. You can't do that today without
because we have no carbon accounting mechanism, no mechanism to
understand the benefits.
Speaker 2 (09:42):
Of the policy.
Speaker 3 (09:44):
So as a result, we get very expensive solution sets
that frankly aren't sustainable. And so I think stepping back
and trying to understand what are the economics, the underlying
cost and the affordability of some of these solutions is
a critical part to laying the right foundation for the future,
and I think challenging that today to try to get
to better solutions is appropriate.
Speaker 1 (10:06):
Specifically, though, how do you feel about Trump canceling offshore
win permits projects that were fully permitted, some were under construction.
There's a risk another president comes in who's left leaning,
whose for clean energy, and uses the kind of policy
(10:27):
weaponizes it against ail and gas projects.
Speaker 3 (10:29):
Well, we've certainly seen that with Biden came in and
canceled the pipeline coming from Canada. So you're absolutely right
that challenge sets on both sides of the aisle. And
I think frankly, for businesses to be successful, particularly businesses
like ours that invest very large sums of money over
a very long horizon, you need stability, you need predictability,
and so I think that's one of the challenges that
(10:50):
we have today with permitting is the way it can
be challenged, the way it can be changed, challenged, the
legal system, and so I think a reform of that
whole area is very appropriate. Focused as you advance these things,
you advanced projects, you get the permit that you have
to have confidence that those permits are going to continue
to exist and allow you to make those investments. I
think that's critical for every industry, every business, and for
(11:11):
every government.
Speaker 1 (11:12):
You had also told me last year that if the
energy transition provides opportunities outside the US, you will pursue those.
In the US. It's pretty clear the energy transition is
going to slow down. It's not going to stop. We
know that electric car sales are going to rise, just
not as much as it was predicted. Solar and wind
projects will get deployed. But if you look outside the US,
(11:35):
even there the Trump administration is having an impact. So
one thing that Exon has long supported is carbon pricing. Ideally,
you would want a global carbon price that would be
level playing field for everybody. We were about to get that.
You know, the politics have been very difficult around carbon pricing.
But at the International Maritime Organization there was a vote
to have a global carbon tax on shipping. Were you
(11:59):
supportive of the net zero framework there?
Speaker 3 (12:01):
So just to the first point that you made around
things have slowed down. If you actually look at what
the Trump administration did with the build and the legislation,
incentives for carbon capturing storage remain. In fact, they increased
them for enhanced oil recovery, and so there is a
scenario that says more carbon is captured in sequestered through
enhanced oil recovery as well as seequestration under the Trump
(12:24):
administration because the incentive for that has gone up, and
for a low carbon hydrogen the incentive remains there. It's
just a shorter time horizon. So I don't think you
can jump immediately to there's going to be less investments
made in low carbon. It's not as I think, black
and white, as you point out.
Speaker 1 (12:40):
On carbon capture specifically, the Environmental Protection Agency wants to
get rid of the greenhouse gas reporting at asset level,
which is crucial to get your forty five Q tax
credit that would enable carbon captured projects to go forward. Yes,
doesn't that change your investment thesis if you're not able
to tap into the forty five Q tax credit even
if it's available to you, because you can't do the
(13:02):
carbon accounting.
Speaker 2 (13:03):
Yeah, I think that's right.
Speaker 3 (13:04):
But I think also the Trump administration is supportive of
forty five Q and so I think the question is
what mechanism gets put in place to allow that to happen.
And that story hasn't been written yet, but we're very
actively involved in terms of how can we do this.
We were supportive of continuing to report emissions. We think
it's important if that happens, and so we've got to
(13:24):
find an alternative if not that, to ensure that we
can report on those emissions.
Speaker 2 (13:29):
So, yeah, that is critical.
Speaker 1 (13:30):
And on the energy transition slowing down, this is not
my analysis. This is analysis done by different groups, Rodium Group,
Bloomberg Enif it's more to do with the speed at
which low carbon stuff will get deployed, and so you
know emissions reductions, which is what matters, which is what
you know. A lot of the low carbon work that
you do is aimed at is going to slow down
(13:51):
as a result of the policies that have been brought in.
So maybe carbon capture doesn't get affected because forty five
Q will be sorted out, but so many solar and
wind projects have been canceled, so the energy transition does
slow down in the US.
Speaker 2 (14:03):
I think it slows down in Europe as well.
Speaker 3 (14:04):
I think actually what you see happening around the world
is that the incentives that people have put in place,
and frankly, some of the impractical aspects of the policy
that put in place and it's been rolling out is
starting to be manifest itself. And so you see even
in Europe that the cost of energy has gotten so
high that they're stepping back and rethinking what needs to
(14:25):
happen in order to achieve their missions reductions while continuing
to provide affordable energy and reliably available energy. So there's
a broader recognition that's needed that these solution sets that
are out there today have their limits, and to blindly
follow those and to assume that that is the only
solution and not step back and think more broadly about
(14:45):
what else can be done to address the issue is
going to slow it down everywhere in the world the
practical aspects of the problems associated with some of the
solutions being proposed. The deeper you penetrate it, the more
manifest those become going to slow things down.
Speaker 1 (15:01):
But one of those was having a global carbon price,
at least on shipping, which the International Maritime Organization in
the countries in it were going to vote for. Were
you supportive of that?
Speaker 3 (15:12):
Yeah, Actually as a concept having a price on carbon,
we've always thought that at global price on carbon is
an effective way to control the emissions to the extent
that governments around the world want to control those emissions.
I think with climate change in particular, as you think back,
the governments are put in place, are elected to represent
their people, and so that's what you see happening around
(15:33):
the world. I don't have a perspective on what government
shooter shouldn't be doing. Their obligation is to their people.
What I focus on is not the what, but the
how best to achieve it.
Speaker 1 (15:43):
But it's part of the industry which is not just
you exonmobile, but you support a lot of lobbying organizations
that speak the voice of the industry as a whole.
Was the industry supportive of the carbon tax in shipping.
Speaker 2 (15:57):
Because we were not advocating against it.
Speaker 1 (16:00):
What we saw was an extraordinary attempt by the US administration.
This is again not my words, but we've spoken to
lots of diplomats who were there in the room who
said that those activities were extraordinary. That there were not
just threats made at the country level, which were public
and were published on the White House website, but also
personal threats, visa restrictions or individual sanctions, which caused many
(16:23):
of them to then really rethink whether they would go
forward with the vote. If you get another chance to
have a global carbon price, how would you speak to
the Trump administration and how would you get them to
change their mind on something that they currently aren't supportive of.
Speaker 3 (16:40):
Yeah, I'm not familiar with all the things you talked about,
so I don't know if that happened or not. And
I certainly wasn't involved in the Trump administration and their
dialogue on this, so I can't pretend to know the
complexity of the discussions that were happening. What I would
tell you is what we have consistently advocated for with
the Miid administration, with the Trump administration is what thoughtful
(17:01):
policies can be put in place to help reduce emissions
that don't compromise economic growth, that don't penalize people's standards
of living. We've been very consistent with that, and there
are opportunities to go do that. In fact, you know
today at this Action Agenda that there is a drive
for carbon accounting. That is a critical first step in
establishing a more uniform approach to how we address emissions
(17:25):
and getting from carbon accounting to carbon intensity standards, so
you can start specifying that on products and letting every
government around the world establish what those specs should be.
Is a very flexible approach that allows every government to
tailor that to the needs of their constituency and to
their specific economic conditions. That's an approach that I think
(17:47):
has very broad application and can be very effective.
Speaker 1 (17:51):
I'm definitely coming to coboniccounting because that's an interesting change
since we last talked about it. But before we get there,
you to only last year that you want the Trump
and administration to stay in the Paris Agreement. I understand
that you've even delivered that message directly to the president.
Why did they not listen to you?
Speaker 3 (18:10):
You'll have to ask President Trump that there are a
lot of people that don't listen to me.
Speaker 1 (18:16):
So, now that the US is officially going to be
out of the Paris Agreement by January, what kind of
harm does that do to the US is the only
country that is leaving.
Speaker 3 (18:26):
You know, I look at the challenge here over a
very long horizon, and again, our action here, the work
that we do, the engagements that we have with governments
all around, remain consistent. We're going to continue trying to
do that because our view is there is something that
needs to be done in this space, and that we
have a role to play and can contribute, and we
will work with whatever administration comes in and continue to
(18:48):
drive in an agenda that we think makes sense, that
doesn't compromise economic growth or people standards of living. We
think there's an option to do that and open the
aperture to the solution set. You're framing all of this
as a US Trump, I think you should frame it
more as an opportunity to open the aperture for a
broader set of solutions to achieve the real objective, which
is lowering emissions, versus the objective that people have been
(19:11):
working to, which is getting rid of oil and gas.
And I think that's one of the big challenges is
that we've gotten the objective statement wrong, or the problem
of statement wrong, and we've got to go back to
how do we best reduce emissions? And the approach being
taken today is centrally controlled government's dictating what the solutions
need to be and then trying to force companies to
(19:33):
implement their solutions. We've seen how controlled economies work, the
Soviet Union, North Korea, Cuba, East Germany plan. Centralized government
control does not work. You need the markets to be engaged.
There hasn't been a solution set out there that engages
the markets. That's absolutely needed. Ideology only takes you so far,
(19:54):
and then you need practical systems that deal with the
real market constraints and the challenges of making things happen.
Speaker 2 (20:00):
That's what we got to get to.
Speaker 1 (20:02):
You didn't raise the exception China, where things are working.
Speaker 2 (20:06):
I would tell you that that's a mix of things.
You do need.
Speaker 3 (20:08):
Some government has a role. Don't get me wrong, not
suggesting government doesn't have a role, but picking the solutions
as a function of ideology versus a function of i'd
say strategy, are two very different set of circumstances. I
think the Chinese government operates a little differently than some
of the democratically elected governments around the world, so it's
a different decision making process.
Speaker 1 (20:28):
So one way in which you think you can address
that is through carbon accounting. Last year you talked about
the idea, but today you have the initiative in front
of you. It's called Carbon Measures, right. It's based on
a concept that's been developed academics at Harvard University and
Oxford University. The goal is to make carbon emissions work
almost like financial liabilities, that once you sell the goods,
(20:51):
you pass on the liabilities emissions liabilities that come with it.
And you wanted that system so that you could get
coben accounting at a product level. The trouble is that
the only way it's going to work is if you
have all parts of the supply chain of that product
(21:11):
also reporting under that framework.
Speaker 3 (21:14):
Yeah, this is but be clear, this is not a
reporting framework. This is not an accounting in the pure
sense of a financial accounting. This is an accounting analog.
So there's a financial model that we think makes a
lot of sense in terms of how to think about accounting,
but it's also anchored in chemistry, and frankly, a molecul
of emissions or CO two is created once, and so
(21:38):
accounting for where in that value chain that emission is
generated is critically important. So I don't think of it
as a financial you know, an asset register in terms
of liabilities or assets. I think of it as understanding
where in a value chain for a product or a
service is the emissions generated, and that's critically import and
(22:00):
if you want to eliminate all emissions, you damn will
better be able to account for.
Speaker 2 (22:04):
All of them.
Speaker 1 (22:04):
Conceptually, what you're saying is right, and the way the
academics have put it is that once you have the
concept in place, the way it will work is through
reporting emissions at a product level through the supply chain
and having these liabilities be passed on from company to
company as the product moves through the supply chain before
(22:24):
it's delivered to the brand customer.
Speaker 3 (22:27):
But I would keep I mean you refer to as
a liability being passed on, and then it's almost talk
about it from a reporting standpoint the opportunity here is
to be able to understand what is the carbon intensity
of a service or a product. And when you have
a standard that uniformly calculates that, there is an opportunity
to begin to regulate carbon intensity of products that in
(22:51):
my mind takes you that will bring in market forces.
That's the element that's of interest to me that I
view would make carbon and carbon emission and just like
every other parameter that we control in the products that
we sell, sulfur and lead and other things that we
control in our products.
Speaker 1 (23:07):
Liabilities is the word that the academics use.
Speaker 2 (23:10):
They call it an academic Sure, I'm a realist.
Speaker 3 (23:12):
I mean, I'm the guy who's making this stuff, and
so I think that's how we think about it.
Speaker 1 (23:15):
Yeah, I mean they called it eliabilities. It went nowhere,
and then it got rebranded as carbon Measure, and I
think it's now getting momentum. So you know, I totally
from a conceptual perspective, I'm on your side here. What
I wanted to get to though, was that to get
it to work, you need the entire supply chain to
be able to agree on this framework, and that means
it's going to take years, decades, right, the Greenhose Gas
(23:39):
protocol that you don't like, which has Cope one, two
and three emissions. It's been in place for twenty five
years now. So there are climate advocates who are worried
that carbon measures is just another delay tactic. How do
you address their consults?
Speaker 3 (23:52):
Well, first, i'd say you don't have to get rid
of the GHG protocol. You can do this in addition
to that. So I'm not sure, you know. I think
there's always view that it's an either or option that
are keep coming back to.
Speaker 2 (24:03):
This is an and option.
Speaker 3 (24:05):
But I would also tell the JSP protocol first of all,
it's not an accounting system.
Speaker 2 (24:10):
It's a reporting system.
Speaker 3 (24:12):
And the other issue is is if you're going to
use it account it doubles triple counts, which means it
doesn't add up to the total planet's emissions. That's a problem.
It also attempts to assign accountability where it doesn't belong.
And I make a point with Scope three all the
time to ask me, as a company that produces products
that are in demand and that are desperately needed by
communities all around the world, that I can't sell that
(24:34):
to them because I need to reduce their emissions.
Speaker 2 (24:37):
I think is unreasonable.
Speaker 3 (24:39):
It's an unreasonable request, and it ends up with an
outcome that nobody wants. We've got four billion people on
the planet that living in energy poverty, that desperately need reliable,
affordable sources of energy. Today, those sources have emissions associated
with them. Okay, we need to address that, but we
can't do that by robbing them of the tools and
the leverage and enabling them to grow economically and to
(25:02):
improve their lifestyle. And so we've got to figure out
how we do both. I don't know how how long
it takes. You know, you can start. This doesn't have
to be a big bang from my perspective. I mean,
I'm a big believer in the pareto that there are
twenty percent of the products or services are causing eighty
percent of the emissions.
Speaker 2 (25:18):
Let's start by focusing on those and by.
Speaker 3 (25:20):
The way, you don't get it perfect, get eighty percent
of the twenty percent and start there and then eve
all that and get better as you go. There are
lots of ways to address this in a thoughtful, objective way,
but we've got to do it in that way, thoughtfully
and objectively, based on the science of CO two emissions
and generation of CO two, and then accounting philosophy for
how best you do that get started.
Speaker 1 (25:41):
I think on the people who are worried about the
delay tactic, they would welcome the view that you can
have both green as Grass protocol and the combon measures
accounting system, because that would allow you to in a
market of ideas competitions.
Speaker 2 (25:53):
Anybody is suggesting you get one, Yeah, that's exactly right. Market.
It's a competition of ideas.
Speaker 3 (25:59):
And if you've got a good if you've got a
good idea, you shouldn't be afraid of competition.
Speaker 1 (26:09):
Join me after the break for more of my conversation
with Darren Woods, CEO of Exon Mobile, And if you'd
like more from Bloombergreen at cop thirty, sign up for
our daily newsletter at Bloomberg dot com Forward Slash Newsletters.
(26:29):
So let's come to the low carbon side of the
ideas that you are funding. You have been clear in
multiple forums that EGXON strength is in the molecules business,
and that's why you haven't really made a play in
solar or wind deployment. But what we've seen over the
past few decades is that the demand for electricity has
(26:51):
been typically at double the pace of energy from molecules.
With AI that's a more recent phenomena. We are seeing
the gap grow between the demand for electricity and rest
of energy. Are you reconsidering getting into the electricity business
as it is?
Speaker 3 (27:09):
I would start by reminding you that the electricity is
generated from molecules, not always majority of them, a majority
of them, and if you go well into the future
to twenty fifty, you're still going to see the majority
of power being generated by molecules. So no, I'm not
reconsidering that. I think there is a capability that we
bring there. And I would also strongly make the point
that hydrogen and carbon molecules go into a lot more
(27:32):
products that society needs that enable modern living than just
combustion products. And so I'm perfectly comfortable with the idea
that over time there will be elements of the products
that I make which are no longer needed by society
because we've found better alternatives with less emissions maybe other benefits.
I'm okay with that. We have historically evolved as a
company on that basis. That doesn't change, though the fundamental
(27:56):
need for our ability to transform these molecules into products
as society needs. I just very quickly give you two examples.
One of them is we recognize that one carbon molecules
are in low demand, high supply, and so you know,
my business drives the low cost what can we make
with low cost carbon molecules? Our organizations invented a unique
(28:17):
carbon molecule that has properties that lend themselves to anodes
and batteries, and we're seeing through third party testing that
are carbon this used in nanodes gives thirty percent faster
charging times, thirty percent further range, and over four times
the battery life. So there's a huge improvement in lithium
(28:37):
ion battery with a product that I'm making out of
a molecule.
Speaker 1 (28:41):
Let's come to that battery breakthrough, because that's recent the
announcement at least, and you know, batteries are something that
the world wants a lot of right now, and so
having new materials is good. There's lots of innovation that's
happening in that space. But with any technology breakthrough, and
this is not just a battery problem, but any technology breakthrough,
there tends to be a certain amount of hype that
(29:03):
comes with it before we can see it in action.
Speaker 2 (29:06):
With this company.
Speaker 1 (29:07):
Well, we can take the example of algae fuels that
you know, Eggson was supportive of thought there was a breakthrough,
but now that doesn't become a practical solution.
Speaker 3 (29:17):
So how we should You should make the distinction between
pursuing a technology breakthrough and announcing one. And what we
talked about with biofuels was the need to produce the
productivity of algae, to generate the amount of oil to
make it economically viable. That's what we were working on and
we saw the potential there. We never announced the breakthrough
that said we were there. I would contrast that with
(29:39):
what we're saying with carbon material, which is to say
we had a view and an idea, we've developed the molecule,
we've graphatized it, we've put it into application, and we've
had third parties testing it, and those results are what
we're reporting on.
Speaker 2 (29:52):
That's a very different construct.
Speaker 1 (29:54):
So when might we see that carbon molecule in an
actual battery, in a commerce product.
Speaker 2 (30:00):
When will we see that.
Speaker 3 (30:02):
We're working really hard to get that commercialized by the
end of this decade. But I think you know, again,
in my mind, we don't over promise and hun to deliver,
and what we try to do is report on what
we're trying to do and accomplish. We've got to commercialize that.
We have gone from the lab to a demo unit
and we have to commercialize that.
Speaker 2 (30:18):
So that will take time.
Speaker 3 (30:19):
These are large scales, and by the way, we're only
going to pursue the things that are large and make
material difference. Stacks on mobile I can't have a bunch
of nickel and dime businesses. So it doesn't bother me,
and it should not suggest that because it's going to
take time, that it's not real. I think you know,
the difference may be in your mindset versus ours. We
think in terms of decades because we understand what it
(30:40):
takes to make these very large scale investments in the
time that it will take to bring them online and
then penetrate to markets. And that's true with all all products.
Speaker 1 (30:48):
Let's talk about some of the other low carbon solutions
that you've worked on. You have a lithium extraction idea
that you are working on now. Lithium prices, as you
well know, are even more volatile than fossil fuel prices.
Does that make the investment thesis less attractive?
Speaker 3 (31:08):
No, because we look at lithium no different than we
look at any other products that we make, which is
where does our production sit on the cost of supply curve.
So you know, if I independent upon a commodity, if
I'm in a commodity business where prices are set by
supply and demand, I do not control the supply and
I do not control the demand.
Speaker 2 (31:27):
So I'm a price taker.
Speaker 3 (31:29):
Across majority of my businesses, I'm a price taker, and
so I will never know where prices are going to be,
and I know that they will fluctuate based on where
demand goes and how much supply comes on. Our strategy
for being successful in a volatile market is to bring
production on that's the low cost of supply. Because I
know in these markets that the least efficient supplier required
(31:52):
to meet the demand is going to set the price.
I've got to be better than that producer to get
a margin. And that's what we're working on and in
lithium exactly the approach that we're taking. And I would
tell you with respect to that, we're still working to
convince ourselves that we can get on the low end
of the cost of supply curve. So we're building small
units to test that to drive the technology. Whether that
(32:12):
will be successful, we don't know yet. But what I'll
tell you is we know we have a concept. We're
demonstrating the ability to do that. We've made lithium. Now
the question is can we commercialize it at scale at
a cost that's competitive with Chinese cash costs.
Speaker 2 (32:25):
That's a question that's yet to be answered.
Speaker 1 (32:27):
And would that be the same answer for direct air
capture technology?
Speaker 3 (32:32):
Direct air capture the same thing everything that we're doing.
It's a little different in that it's a cost of abatement,
but it's the same principle. We have to be on
the low end of the cost of abatement curve because
if it can't compete economically, then we're not interested in
And I would tell you that's true even for the
businesses today that are being.
Speaker 2 (32:49):
Subsidized by policy.
Speaker 3 (32:51):
What I tell the organization is we can begin the
business based on that, but we're not going to end
up there. And so anything that we're doing, we have
to convince ourselves that over time we'll find a way
to get on the far left hand side of the
cost of supply curve so that when market forces take
over and by the way they have to if we're
going to be successful as society, that I better be
(33:11):
advantaged with respect to that production. And if I can't
clear that hurdle and convince myself of it, we won't
go in that business or make those investments.
Speaker 1 (33:18):
Another low carbon commitment you have is to reduce the
methane intensity of natural gas, so the amount of methane
that you leak as a result of the processes that
are involved in extracting and delivering natural gas to customers.
You have a goal for twenty thirty to try and
be near zero methane leaks, and that's crucial here at
(33:42):
COP thirty, where there's going to be a big discussion
around methane and maybe even a methane deal of some sort.
You know there's already a target, but how do you
actually get to that target. Lots of countries are talking
about that now. The Inflation Reduction Act would have benefited
companies like yours who are starting to work on reducing
methane intensity because it was going to put a methane
(34:03):
fee on those who leak. A lot that's gone now
to use stop investing in methane reductions. As a result
of the incentive going away.
Speaker 3 (34:11):
We were driving methanetense reductions before the IRA came along,
and we'll continue to it long after the IRA has expired.
So we don't our commitment to reduce emissions CO two emissions,
methane emissions isn't a function of policy being put in
place or being incentivized by penalties.
Speaker 2 (34:29):
Our objective there.
Speaker 3 (34:31):
Is to be a responsible operator, and from my perspective
from the dagout in this job, it was if we're
producing something, it's our responsibility and obligation to keep it
in the pipe, and we need work to do that.
And we've made huge progress in that, irrespective of the
commitments that we've made publicly. That was if you go
back in time, before methane was had the profile that
(34:51):
it has today, we began reducing our methane emissions intensity
before even this became a very public issue or a
high profile issue, and we're going to continue to do that.
Speaker 2 (35:00):
We make great progress with it.
Speaker 1 (35:02):
One of the things that has happened over the last
few years, which has been exceptional relative to other oil
and gas companies, is that EGXON has signed lots and
lots of permitting deals around the world, so recently grease,
but also you're re entering Iraq, Trinidad, Libya. Given where
we are in oil and gas markets, generally there's lots
(35:25):
of oversupply right now, prices have been falling. Why are
you expanding your permitting regimes aggressively?
Speaker 2 (35:32):
This is a depletion business.
Speaker 3 (35:34):
The bigger you are, the more production you have, the
bigger the whole you dig through depletion. So every barrel
who produces a peril that's not available to us. So
you can think of it, it's like having a bottle
of water. Every sip you take is less water in
the bottle. Eventually the bottle runs out of water and
you need to find a new bottle. So that's the
job that we have is as we continue to produce
as a large producer, we have to find ways to
(35:57):
replace the barrels that we've put on the market.
Speaker 2 (36:00):
That's a huge challenge.
Speaker 3 (36:01):
And given that if you go out to twenty fifty
and beyond that oil and gas will continue to play
an important role and the energy mix and providing products
that the world needs. We know those barrels are going
to be needed, and so finding opportunities to bring more
production on to fill the depletion curve is a critical
part of the job. There's only really three levers that
(36:23):
we have to pull there. One is for the resources
that we already have today, how do we recover more.
Speaker 2 (36:29):
That's a technology challenge that we're working very hard on.
Speaker 3 (36:33):
The other is you can go out and bring a
technology advantage or a production advantage or operating advantage to
buy somebody else's assets and produce those more effectively, get
better recovery, and do it at a lower cost. And
then the third is you've got to find new things
and explorations are a critical part of that.
Speaker 1 (36:50):
In getting those permits. How much has the Trump administration
been helpful?
Speaker 2 (36:54):
We don't work through the US government on those.
Speaker 1 (36:57):
Would you be interested in on gas assets in Azuela
if they were to open up?
Speaker 3 (37:01):
So you know, we've been expropriated for Minnesota at two
different times, and so I think we have our history there,
we have an experience set, and so certainly looking at
what follows and what's in place, and how comfortable and
confident are we that if we made investments, that we'd
see the return on those investments. It would be a
critical part to evaluating that. And then we'd have to
see what the economics look like. So I wouldn't put
(37:24):
it on.
Speaker 2 (37:24):
The list or take it off the list.
Speaker 3 (37:25):
We'd have to see what the circumstances are at the time,
which today I don't know what they're going to be,
if they're even different.
Speaker 1 (37:31):
You said previously that you don't work with the Trump
administration on permitting deals abroad, but there is a clear
indication from the Trump administration that they would like more
oil and gas production globally. Has there been any support
to help you figure out where that might be?
Speaker 2 (37:47):
We don't need any help in that area.
Speaker 1 (37:49):
Now. Key to your efforts to turn around performance at
Exomobil one hundred and fifty year old company has been
what you've classed as your focus on winning. Some of that, though,
has included layoffs and cost cutting internally, it's also doing
active as shareholders and even taking a rival to arbitration court.
Can you define what winning means to you?
Speaker 3 (38:11):
Yeah, you've mixed a lot of things up in that
question that frankly don't are. You've got apples, oranges, bananas
and pairs in there. I think, first of all, what
I would tell you is what we've been very focused
on the winning is bringing a unique set of capabilities
and competitive advantages to the marketplace and realizing those advantages
on the bottom line. And so if you look at
(38:31):
the transformation the company's been making, the changes that we've
made in our organization, it has been restructuring to more
effectively bring the advantages of scale, bring the advantages of
the integrated businesses that we have and the synergies that
exist between those businesses to the bottom line, taking advantage
of and driving technology and technology benefits to the bottom line.
(38:53):
It's a focus on execution excellence, to drive capital efficiency,
to drive reliability, to drive a lower maintenance, higher safety,
better environmental performance. And then it's been about unlocking the
potential of our people. That's what the changes that we've
been driving to unlock this advantage we've been very focused on.
We've made great progress, and the layoffs that came from
(39:15):
that is a function of the restructuring and better organizing
our people in a way that they can work more
productively and take advantage of everything Excellent Mobile has to offer.
It was more about effectiveness less about efficiency, But like everything,
when you focus on being more effective, you find efficiencies,
and so that's what's driving that With respect to the lawsuits,
(39:36):
this is really around protecting the value that we're creating
for our shareholders and importantly defending ourselves against activist attacks
which are generated by an agenda that's not aligned with
the value of the company or the value that we
create for our shareholders. And unfortunately, we've gotten to a
place in society where the courts are being used frequently
(39:57):
to bring challenges to some of these activities. We're going
to use the same tools that our antagonists use to
defend the value that we're creating for our shareholders.
Speaker 1 (40:06):
But sticking to layoffs, Egxon currently has fourteen thousand fewer
employees than in twenty nineteen, and there are plans to
lose another two thousand jobs. And Eggxon isn't the only
company doing this. We've seen jobs in Kinneco Phillips being
cut twenty percent to twenty five percent. Chevron has said
it would cut about twenty percent of its workforce. Do
(40:27):
you think it's a sign of the industry shrinking, that
its social license is eroding.
Speaker 3 (40:32):
I can't speak for Kindaco and Savon, I can speak
for ourselves, and it's not. If you look at the
layoffs that you're talking about for us like three percent.
Speaker 2 (40:39):
Of the workforce global workforce.
Speaker 3 (40:40):
So again this is we've been very focused on changing
the how we work, as I mentioned the transformation that
we're trying to make to unlock our competitive advantages. What
we've shifted to as we've changed the how is to
focus on the where. And if you look at our
global footprint and where we were located, it is based
on an operating model, a construct that was developed decades ago,
(41:03):
and so we're bringing our operational footprint, our facility footprint
in line with how we work today. That is my mind,
an optimization step and it is not a deep cut
to drive. And again it wasn't driven, wasn't focused on
a cost cutting. It was focused on taking advantage of
our people and the teamwork and the collaboration and the
(41:24):
innovation that comes from that that we have unlocked with
these changes, and we can only do that when people
are in the same location. I'm a big believer in
working together, not working remotely.
Speaker 1 (41:34):
Well, the two thousand ars yes, three percent, but since
twenty nineteen it's more than twenty five percent because you
have sixty three thousand employees now, so which comes.
Speaker 3 (41:43):
From the transformation in the organizational. We had I think
eleven independent unique companies siloed in our organization. We've gotten
rid of the silos today and reorganized. We have a
one team, one goal mentality. People are working collaboratively together
and so you need less people when you take away
the artificial construct that exists. That's a function of improving
(42:06):
your effectiveness, getting better at what we do, and you
see that in the results that we have. If this
was a pure cost cutting exercise, you wouldn't see the
improvement that we're getting in safety, personnel safety, and process safety.
You wouldn't see the improvement that we're getting in our
reliability and we now have record reliability with our operations.
You wouldn't see that in the projects that we're delivering,
which today are industry leading both in cost and schedule.
(42:28):
And so there's a lot of benefits that you can
see that's happening in the company because of this effectiveness thing.
Speaker 1 (42:33):
If we dig that five year period, the stock price
has certainly done wonders for eggs on. But if we
just take the last twelve months since Donald Trump's selection,
but since all these regulatory rollbacks, since the push to
try and get more fossil fuels. The stock price hasn't
done all that well. It's a little bit lower than
it was exactly one year ago. Now very much.
Speaker 3 (42:54):
You have to I think anytime you look at the
stock price of the company, you have to look at
the commodity price market that we're in. Our stock price
is highly correlated with commodity prices, and so it will
move up and down. So the absolute number is less
important than the relative number over time and the things
that you're doing to improve that. So I don't have
any concerns in that space.
Speaker 1 (43:13):
You've been in the role for nine years. How long
do you plan to stay on?
Speaker 2 (43:18):
Well, the board gets to decide that, not me.
Speaker 1 (43:22):
And what would you like to get done before you
step away.
Speaker 3 (43:25):
You know, we've made a lot of changes, as you've
talked about. Many of those have been recent. In fact,
we just announced this week the formation of a global
operations organization, and we've got to bed those in and
I think we're only beginning to see the benefits of
that change, and I would like to have time to
really focus the organization on improving the effectiveness of the
changes that we've made we are rolling out. I think
(43:47):
the largest instance of SAP were today under our corporation,
the first time in our history, we will have a
system that spans the entire corporation and a data structure
that's consistent for every business we do everywhere around the world.
So it unlocks huge opportunities if you think about that
in conjunction with AI, where data and data consistency and
(44:07):
integrity is so critical to the benefits of AI, we
will have an unmatched platform with more data than anybody
else in our industry. And so I think i'd like
to see that through GOT We've got a program that
we're developing that through the next several years.
Speaker 2 (44:20):
So there's still a lot to be.
Speaker 3 (44:21):
Done in the company that's going to keep me busy,
and I'd like to see some of that land and
begin to produce the results that we're counting on.
Speaker 2 (44:28):
Thank you, Dear, Thank you good talking with you.
Speaker 1 (44:45):
Thank you for listening to zero. If you liked this episode,
please take a moment to rate and review the show
on Apple Podcasts and Spotify. This episode was produced by
Oscar Boyd with additional help from annam Azarakis. Our team
music is composed by Wonderly Special. Thanks to Sommersaudi, Moses Adam,
Laura Milan and Sharan chen i'm Akshadrati Baksu
Welcome to zero. I am Akshatrati Today Egxon at COP thirty.
(00:20):
It's been a year of bad news for climate policies.
The biggest force has been Donald Trump, who, in his
second term as US president, has systematically dismantled climate action
at home and made concerted efforts to attack climate initiatives abroad.
He has championed fossil fuels and single handedly slowed down
the energy transition, at least in the US. Trump's actions
(00:45):
have also given license to many to ignore and deny
climate change. But the CEO of Exon Mobile, Darren Woods,
isn't quite following suit. Darren spears the CEOs of other
international oil companies have stopped coming to COP climate summits,
but Darren came to a side event here at COP thirty,
(01:06):
his third COP in a row. For context, Egxon is
one of the world's largest oil and gas companies, and
Darren is in charge of overseeing its operations and what
areas of the energy transition the company pursues or ignores.
Last year, at COP twenty nine in Baku, I got
a chance to ask him questions about how Egxon, which
(01:27):
has a long history of sowing doubt about climate science
can be trusted to now be acting in good faith
to tackle climate change. I quized him on Exon's lobbying
efforts on the oil industry's favorite climate solution, carbon capture.
I also talked to him about the millions of dollars
Exon spent advertising algaebio fuels without ever scaling up the
(01:48):
technology for commercial use. If you haven't listened to that conversation,
I recommend that you do. We link the episode in
the show notes because this year I wanted to ask
him different questions and follow up on some of the
answers he gave me last year. Why is EGXON backing
a new carbon accounting idea which many climate advocates worry
(02:08):
is yet another delay tactic. What is his plan now
that many of the tax credits under the Inflation Reduction
Act for low carbon solutions have been gutted? And how
is he planning to deal with the tactics that Trump
is using to go after businesses, the same tactics that
could be weaponized against his industry by a future administration.
(02:30):
As you will hear, it was a good conversation with
a healthy amount of disagreement. These are the kinds of
conversation I'd like to see happen more often where we
aren't questioning the accepted science of climate change, but debating
the ways in which we should act quickly. Welcome back
(02:51):
to zero, Darren.
Speaker 2 (02:51):
It's good to be back.
Speaker 3 (02:53):
So.
Speaker 1 (02:53):
I know your schedule is always very tight.
Speaker 2 (02:55):
Yeah, but you are in Brazil.
Speaker 1 (02:57):
Have you been to the Amazon ever before? Have you
been to a rainforest before?
Speaker 2 (03:01):
I've been to a rainforest before, but not the Amazon.
Maybe next time, maybe, next time. Yeah, I like that.
Speaker 1 (03:06):
So it's been a year since Donald Trump's election. He's
been in office for ten months and there's been a
radical shift in policies, obviously in the US, away from
climate action and in favor of fossil fields. What changes
have you liked?
Speaker 3 (03:23):
Well, I think, to me, what I focus on is
the dialogue that's occurring in the fact that there's a
debate and I'd say a challenge to some of the
paradigms that have been established as to how best to
accomplish this objective. If you think about the whole effort
in this space, it's been defined, frankly by a set
of solutions that have been proposed by a lot of
(03:46):
ideologues primarily on the left, that this is the way
we're going to solve the problem with this set of solutions.
And I think unfortunately the problem and the challenge of
climate change has then been defined by this solution set,
and either you're for these solutions or against. And I
think what we need to do is focus less on
the proposed solutions. Some of them are valid and have merit,
(04:08):
and they're necessary, but they're not sufficient.
Speaker 2 (04:10):
We need a broader aperture, and so less.
Speaker 3 (04:13):
Focus on that set of solutions, more focused on the
opportunity to address the real challenge here, which is emissions.
And so I actually like the fact there's a debate
going on both sides of the argument. And I think
generally speaking, when you have people debating about how best
to achieve an outcome or to balance one challenge or
(04:33):
issue with the other challenges and issues, that's an important
dialogue and debate to have.
Speaker 2 (04:38):
And I feel more that's happening today in the US
and in the past.
Speaker 1 (04:41):
Well, there are ideologues on the left, but there are
idea logues on the right too, because.
Speaker 2 (04:45):
Are on both sides. Absolutely many of.
Speaker 1 (04:47):
The things that have happened under the Trump administration are
things that the oil and gas industry as a whole
doesn't like. You know, the API came out in support
of keeping the greenhouse gas reporting, which the EPA wants
to get rid of, for example. But you told me
last year that you liked a lot of what was
there in the Inflation Reduction Act, and obviously under the
Trump administration that's been gutted, almost all of the incentives
(05:10):
that were there are gone. Does that change your thesis
on the investments that you were looking forward to making
and all sorts of low carbon solutions like carbon capture,
like hydrogen.
Speaker 3 (05:22):
So I think what we talked about last year is
what we've been very focused on is how can we
contribute to the challenge of emissions and reducing emissions based
on our capabilities and our core competitive advantages. And that's
very much focused on the molecule side of the equation,
so carbon capture and storage, low carbon or virtually carbon
free hydrogen, biofuels. We ended up moving into lithium based
(05:44):
on our ability to process produced water, brine water, all those. Frankly,
if you look at the changes the Trump administration is
made to the IRA have not reduced the incentives for
those but I will tell you that as you look
at those different areas that were focused on, always said
that our investment in the space was a function of
good policy policy that incentivizes that in the short term,
(06:07):
but very importantly for markets developing and for there to
be a customer demand, because ultimately any of these policies
to be successful are going to have to evolve into
market driven forces. Government can afford to subsidize these solutions
in perpetuity, and so markets have to develop, and technology
needs to evolve so that we can get the cost down,
because today in some of these areas the cost are
(06:30):
too high for the long term, and so those three
things have to happen. They have to improve, and we're
going to pace the investments associated with what we see
in the development there. Frankly, with our largest project, the
Baytown Blue Hydrogen project, one of the big challenges there
is customers buying the product, and so we are potentially
going to pace that based on our ability to sign
(06:50):
customers up, much less a policy issued in that case.
Speaker 1 (06:54):
But you started by saying, in terms of getting climate
solutions or solutions that would reduce a missions being technology neutral,
starting point having policies is helpful. In the US, you
get this swing to the left and to the right.
How much does that war do you well?
Speaker 3 (07:11):
Your point about their ideologues on either side of the
aisle is I definitely agree with that. That's why we
shouldn't be trying to solve this problem through ideology. I mean,
ideology only takes you so far and then you hit
the reality of the real world and need to practical
constraints and how you manage through those. And I think
from our perspective, we're trying to keep a very clear
view on what is the problem statement, which is trying
(07:33):
to find ways to productively reduce emissions that don't slow
economic growth, they don't impact people's standards of living, find
ways to do that based on what we're good at
and achieve both. We refer to it as the end equation,
and we're absolutely convinced that we can do that. And
that dialogue that I have and the work that we're
doing is consistent whether it's you know, a left administration
(07:54):
or a right administration, or whether it's an ideologue or
somebody who center. The foundational fundamental of how we address
this issue over time do not change with political cycles
or who get selected.
Speaker 1 (08:06):
You told me last year that given the scale of
the energy transition, no single president in any country can
do much to detail or to accelerate the energy transition.
Do you still feel the same given how effective Trump
has been at stifling clean energy projects. This is not
(08:26):
just clean hydrogen projects, but also carbon capture projects. Obviously
lots and lots of offshore wind projects that were canceled.
Are you still of the same view that one president
cannot shift the pace of the energy transition?
Speaker 3 (08:42):
What I would say is the energy industry, the basis
on which we make decisions, the time frame that those
decisions play themselves out, and the duration of those investments
exceed any political cycle. So my point is that we
have to look beyond the political cycle in terms of
making these decisions. I think one of the things the
(09:02):
Trump administration is challenging is a parameter that frankly has
not been given the intention it needs, which is the
affordability of these things. And you know, is it a
productive use of money? You know, the challenge today is
there's not a policy banker around that can tell you
what is the cost for the benefit of a ton
of carbon removed? And every government has its constraints and limits.
(09:23):
Every organization has its constraints. We don't have unlimited budgets,
and so I think every government around the world should
be focused on how do you get the biggest bang
for the buck. How do I remove the most emissions
for the least spend. You can't do that today without
because we have no carbon accounting mechanism, no mechanism to
understand the benefits.
Speaker 2 (09:42):
Of the policy.
Speaker 3 (09:44):
So as a result, we get very expensive solution sets
that frankly aren't sustainable. And so I think stepping back
and trying to understand what are the economics, the underlying
cost and the affordability of some of these solutions is
a critical part to laying the right foundation for the future,
and I think challenging that today to try to get
to better solutions is appropriate.
Speaker 1 (10:06):
Specifically, though, how do you feel about Trump canceling offshore
win permits projects that were fully permitted, some were under construction.
There's a risk another president comes in who's left leaning,
whose for clean energy, and uses the kind of policy
(10:27):
weaponizes it against ail and gas projects.
Speaker 3 (10:29):
Well, we've certainly seen that with Biden came in and
canceled the pipeline coming from Canada. So you're absolutely right
that challenge sets on both sides of the aisle. And
I think frankly, for businesses to be successful, particularly businesses
like ours that invest very large sums of money over
a very long horizon, you need stability, you need predictability,
and so I think that's one of the challenges that
(10:50):
we have today with permitting is the way it can
be challenged, the way it can be changed, challenged, the
legal system, and so I think a reform of that
whole area is very appropriate. Focused as you advance these things,
you advanced projects, you get the permit that you have
to have confidence that those permits are going to continue
to exist and allow you to make those investments. I
think that's critical for every industry, every business, and for
(11:11):
every government.
Speaker 1 (11:12):
You had also told me last year that if the
energy transition provides opportunities outside the US, you will pursue those.
In the US. It's pretty clear the energy transition is
going to slow down. It's not going to stop. We
know that electric car sales are going to rise, just
not as much as it was predicted. Solar and wind
projects will get deployed. But if you look outside the US,
(11:35):
even there the Trump administration is having an impact. So
one thing that Exon has long supported is carbon pricing. Ideally,
you would want a global carbon price that would be
level playing field for everybody. We were about to get that.
You know, the politics have been very difficult around carbon pricing.
But at the International Maritime Organization there was a vote
to have a global carbon tax on shipping. Were you
(11:59):
supportive of the net zero framework there?
Speaker 3 (12:01):
So just to the first point that you made around
things have slowed down. If you actually look at what
the Trump administration did with the build and the legislation,
incentives for carbon capturing storage remain. In fact, they increased
them for enhanced oil recovery, and so there is a
scenario that says more carbon is captured in sequestered through
enhanced oil recovery as well as seequestration under the Trump
(12:24):
administration because the incentive for that has gone up, and
for a low carbon hydrogen the incentive remains there. It's
just a shorter time horizon. So I don't think you
can jump immediately to there's going to be less investments
made in low carbon. It's not as I think, black
and white, as you point out.
Speaker 1 (12:40):
On carbon capture specifically, the Environmental Protection Agency wants to
get rid of the greenhouse gas reporting at asset level,
which is crucial to get your forty five Q tax
credit that would enable carbon captured projects to go forward. Yes,
doesn't that change your investment thesis if you're not able
to tap into the forty five Q tax credit even
if it's available to you, because you can't do the
(13:02):
carbon accounting.
Speaker 2 (13:03):
Yeah, I think that's right.
Speaker 3 (13:04):
But I think also the Trump administration is supportive of
forty five Q and so I think the question is
what mechanism gets put in place to allow that to happen.
And that story hasn't been written yet, but we're very
actively involved in terms of how can we do this.
We were supportive of continuing to report emissions. We think
it's important if that happens, and so we've got to
(13:24):
find an alternative if not that, to ensure that we
can report on those emissions.
Speaker 2 (13:29):
So, yeah, that is critical.
Speaker 1 (13:30):
And on the energy transition slowing down, this is not
my analysis. This is analysis done by different groups, Rodium Group,
Bloomberg Enif it's more to do with the speed at
which low carbon stuff will get deployed, and so you
know emissions reductions, which is what matters, which is what
you know. A lot of the low carbon work that
you do is aimed at is going to slow down
(13:51):
as a result of the policies that have been brought in.
So maybe carbon capture doesn't get affected because forty five
Q will be sorted out, but so many solar and
wind projects have been canceled, so the energy transition does
slow down in the US.
Speaker 2 (14:03):
I think it slows down in Europe as well.
Speaker 3 (14:04):
I think actually what you see happening around the world
is that the incentives that people have put in place,
and frankly, some of the impractical aspects of the policy
that put in place and it's been rolling out is
starting to be manifest itself. And so you see even
in Europe that the cost of energy has gotten so
high that they're stepping back and rethinking what needs to
(14:25):
happen in order to achieve their missions reductions while continuing
to provide affordable energy and reliably available energy. So there's
a broader recognition that's needed that these solution sets that
are out there today have their limits, and to blindly
follow those and to assume that that is the only
solution and not step back and think more broadly about
(14:45):
what else can be done to address the issue is
going to slow it down everywhere in the world the
practical aspects of the problems associated with some of the
solutions being proposed. The deeper you penetrate it, the more
manifest those become going to slow things down.
Speaker 1 (15:01):
But one of those was having a global carbon price,
at least on shipping, which the International Maritime Organization in
the countries in it were going to vote for. Were
you supportive of that?
Speaker 3 (15:12):
Yeah, Actually as a concept having a price on carbon,
we've always thought that at global price on carbon is
an effective way to control the emissions to the extent
that governments around the world want to control those emissions.
I think with climate change in particular, as you think back,
the governments are put in place, are elected to represent
their people, and so that's what you see happening around
(15:33):
the world. I don't have a perspective on what government
shooter shouldn't be doing. Their obligation is to their people.
What I focus on is not the what, but the
how best to achieve it.
Speaker 1 (15:43):
But it's part of the industry which is not just
you exonmobile, but you support a lot of lobbying organizations
that speak the voice of the industry as a whole.
Was the industry supportive of the carbon tax in shipping.
Speaker 2 (15:57):
Because we were not advocating against it.
Speaker 1 (16:00):
What we saw was an extraordinary attempt by the US administration.
This is again not my words, but we've spoken to
lots of diplomats who were there in the room who
said that those activities were extraordinary. That there were not
just threats made at the country level, which were public
and were published on the White House website, but also
personal threats, visa restrictions or individual sanctions, which caused many
(16:23):
of them to then really rethink whether they would go
forward with the vote. If you get another chance to
have a global carbon price, how would you speak to
the Trump administration and how would you get them to
change their mind on something that they currently aren't supportive of.
Speaker 3 (16:40):
Yeah, I'm not familiar with all the things you talked about,
so I don't know if that happened or not. And
I certainly wasn't involved in the Trump administration and their
dialogue on this, so I can't pretend to know the
complexity of the discussions that were happening. What I would
tell you is what we have consistently advocated for with
the Miid administration, with the Trump administration is what thoughtful
(17:01):
policies can be put in place to help reduce emissions
that don't compromise economic growth, that don't penalize people's standards
of living. We've been very consistent with that, and there
are opportunities to go do that. In fact, you know
today at this Action Agenda that there is a drive
for carbon accounting. That is a critical first step in
establishing a more uniform approach to how we address emissions
(17:25):
and getting from carbon accounting to carbon intensity standards, so
you can start specifying that on products and letting every
government around the world establish what those specs should be.
Is a very flexible approach that allows every government to
tailor that to the needs of their constituency and to
their specific economic conditions. That's an approach that I think
(17:47):
has very broad application and can be very effective.
Speaker 1 (17:51):
I'm definitely coming to coboniccounting because that's an interesting change
since we last talked about it. But before we get there,
you to only last year that you want the Trump
and administration to stay in the Paris Agreement. I understand
that you've even delivered that message directly to the president.
Why did they not listen to you?
Speaker 3 (18:10):
You'll have to ask President Trump that there are a
lot of people that don't listen to me.
Speaker 1 (18:16):
So, now that the US is officially going to be
out of the Paris Agreement by January, what kind of
harm does that do to the US is the only
country that is leaving.
Speaker 3 (18:26):
You know, I look at the challenge here over a
very long horizon, and again, our action here, the work
that we do, the engagements that we have with governments
all around, remain consistent. We're going to continue trying to
do that because our view is there is something that
needs to be done in this space, and that we
have a role to play and can contribute, and we
will work with whatever administration comes in and continue to
(18:48):
drive in an agenda that we think makes sense, that
doesn't compromise economic growth or people standards of living. We
think there's an option to do that and open the
aperture to the solution set. You're framing all of this
as a US Trump, I think you should frame it
more as an opportunity to open the aperture for a
broader set of solutions to achieve the real objective, which
is lowering emissions, versus the objective that people have been
(19:11):
working to, which is getting rid of oil and gas.
And I think that's one of the big challenges is
that we've gotten the objective statement wrong, or the problem
of statement wrong, and we've got to go back to
how do we best reduce emissions? And the approach being
taken today is centrally controlled government's dictating what the solutions
need to be and then trying to force companies to
(19:33):
implement their solutions. We've seen how controlled economies work, the
Soviet Union, North Korea, Cuba, East Germany plan. Centralized government
control does not work. You need the markets to be engaged.
There hasn't been a solution set out there that engages
the markets. That's absolutely needed. Ideology only takes you so far,
(19:54):
and then you need practical systems that deal with the
real market constraints and the challenges of making things happen.
Speaker 2 (20:00):
That's what we got to get to.
Speaker 1 (20:02):
You didn't raise the exception China, where things are working.
Speaker 2 (20:06):
I would tell you that that's a mix of things.
You do need.
Speaker 3 (20:08):
Some government has a role. Don't get me wrong, not
suggesting government doesn't have a role, but picking the solutions
as a function of ideology versus a function of i'd
say strategy, are two very different set of circumstances. I
think the Chinese government operates a little differently than some
of the democratically elected governments around the world, so it's
a different decision making process.
Speaker 1 (20:28):
So one way in which you think you can address
that is through carbon accounting. Last year you talked about
the idea, but today you have the initiative in front
of you. It's called Carbon Measures, right. It's based on
a concept that's been developed academics at Harvard University and
Oxford University. The goal is to make carbon emissions work
almost like financial liabilities, that once you sell the goods,
(20:51):
you pass on the liabilities emissions liabilities that come with it.
And you wanted that system so that you could get
coben accounting at a product level. The trouble is that
the only way it's going to work is if you
have all parts of the supply chain of that product
(21:11):
also reporting under that framework.
Speaker 3 (21:14):
Yeah, this is but be clear, this is not a
reporting framework. This is not an accounting in the pure
sense of a financial accounting. This is an accounting analog.
So there's a financial model that we think makes a
lot of sense in terms of how to think about accounting,
but it's also anchored in chemistry, and frankly, a molecul
of emissions or CO two is created once, and so
(21:38):
accounting for where in that value chain that emission is
generated is critically important. So I don't think of it
as a financial you know, an asset register in terms
of liabilities or assets. I think of it as understanding
where in a value chain for a product or a
service is the emissions generated, and that's critically import and
(22:00):
if you want to eliminate all emissions, you damn will
better be able to account for.
Speaker 2 (22:04):
All of them.
Speaker 1 (22:04):
Conceptually, what you're saying is right, and the way the
academics have put it is that once you have the
concept in place, the way it will work is through
reporting emissions at a product level through the supply chain
and having these liabilities be passed on from company to
company as the product moves through the supply chain before
(22:24):
it's delivered to the brand customer.
Speaker 3 (22:27):
But I would keep I mean you refer to as
a liability being passed on, and then it's almost talk
about it from a reporting standpoint the opportunity here is
to be able to understand what is the carbon intensity
of a service or a product. And when you have
a standard that uniformly calculates that, there is an opportunity
to begin to regulate carbon intensity of products that in
(22:51):
my mind takes you that will bring in market forces.
That's the element that's of interest to me that I
view would make carbon and carbon emission and just like
every other parameter that we control in the products that
we sell, sulfur and lead and other things that we
control in our products.
Speaker 1 (23:07):
Liabilities is the word that the academics use.
Speaker 2 (23:10):
They call it an academic Sure, I'm a realist.
Speaker 3 (23:12):
I mean, I'm the guy who's making this stuff, and
so I think that's how we think about it.
Speaker 1 (23:15):
Yeah, I mean they called it eliabilities. It went nowhere,
and then it got rebranded as carbon Measure, and I
think it's now getting momentum. So you know, I totally
from a conceptual perspective, I'm on your side here. What
I wanted to get to though, was that to get
it to work, you need the entire supply chain to
be able to agree on this framework, and that means
it's going to take years, decades, right, the Greenhose Gas
(23:39):
protocol that you don't like, which has Cope one, two
and three emissions. It's been in place for twenty five
years now. So there are climate advocates who are worried
that carbon measures is just another delay tactic. How do
you address their consults?
Speaker 3 (23:52):
Well, first, i'd say you don't have to get rid
of the GHG protocol. You can do this in addition
to that. So I'm not sure, you know. I think
there's always view that it's an either or option that
are keep coming back to.
Speaker 2 (24:03):
This is an and option.
Speaker 3 (24:05):
But I would also tell the JSP protocol first of all,
it's not an accounting system.
Speaker 2 (24:10):
It's a reporting system.
Speaker 3 (24:12):
And the other issue is is if you're going to
use it account it doubles triple counts, which means it
doesn't add up to the total planet's emissions. That's a problem.
It also attempts to assign accountability where it doesn't belong.
And I make a point with Scope three all the
time to ask me, as a company that produces products
that are in demand and that are desperately needed by
communities all around the world, that I can't sell that
(24:34):
to them because I need to reduce their emissions.
Speaker 2 (24:37):
I think is unreasonable.
Speaker 3 (24:39):
It's an unreasonable request, and it ends up with an
outcome that nobody wants. We've got four billion people on
the planet that living in energy poverty, that desperately need reliable,
affordable sources of energy. Today, those sources have emissions associated
with them. Okay, we need to address that, but we
can't do that by robbing them of the tools and
the leverage and enabling them to grow economically and to
(25:02):
improve their lifestyle. And so we've got to figure out
how we do both. I don't know how how long
it takes. You know, you can start. This doesn't have
to be a big bang from my perspective. I mean,
I'm a big believer in the pareto that there are
twenty percent of the products or services are causing eighty
percent of the emissions.
Speaker 2 (25:18):
Let's start by focusing on those and by.
Speaker 3 (25:20):
The way, you don't get it perfect, get eighty percent
of the twenty percent and start there and then eve
all that and get better as you go. There are
lots of ways to address this in a thoughtful, objective way,
but we've got to do it in that way, thoughtfully
and objectively, based on the science of CO two emissions
and generation of CO two, and then accounting philosophy for
how best you do that get started.
Speaker 1 (25:41):
I think on the people who are worried about the
delay tactic, they would welcome the view that you can
have both green as Grass protocol and the combon measures
accounting system, because that would allow you to in a
market of ideas competitions.
Speaker 2 (25:53):
Anybody is suggesting you get one, Yeah, that's exactly right. Market.
It's a competition of ideas.
Speaker 3 (25:59):
And if you've got a good if you've got a
good idea, you shouldn't be afraid of competition.
Speaker 1 (26:09):
Join me after the break for more of my conversation
with Darren Woods, CEO of Exon Mobile, And if you'd
like more from Bloombergreen at cop thirty, sign up for
our daily newsletter at Bloomberg dot com Forward Slash Newsletters.
(26:29):
So let's come to the low carbon side of the
ideas that you are funding. You have been clear in
multiple forums that EGXON strength is in the molecules business,
and that's why you haven't really made a play in
solar or wind deployment. But what we've seen over the
past few decades is that the demand for electricity has
(26:51):
been typically at double the pace of energy from molecules.
With AI that's a more recent phenomena. We are seeing
the gap grow between the demand for electricity and rest
of energy. Are you reconsidering getting into the electricity business
as it is?
Speaker 3 (27:09):
I would start by reminding you that the electricity is
generated from molecules, not always majority of them, a majority
of them, and if you go well into the future
to twenty fifty, you're still going to see the majority
of power being generated by molecules. So no, I'm not
reconsidering that. I think there is a capability that we
bring there. And I would also strongly make the point
that hydrogen and carbon molecules go into a lot more
(27:32):
products that society needs that enable modern living than just
combustion products. And so I'm perfectly comfortable with the idea
that over time there will be elements of the products
that I make which are no longer needed by society
because we've found better alternatives with less emissions maybe other benefits.
I'm okay with that. We have historically evolved as a
company on that basis. That doesn't change, though the fundamental
(27:56):
need for our ability to transform these molecules into products
as society needs. I just very quickly give you two examples.
One of them is we recognize that one carbon molecules
are in low demand, high supply, and so you know,
my business drives the low cost what can we make
with low cost carbon molecules? Our organizations invented a unique
(28:17):
carbon molecule that has properties that lend themselves to anodes
and batteries, and we're seeing through third party testing that
are carbon this used in nanodes gives thirty percent faster
charging times, thirty percent further range, and over four times
the battery life. So there's a huge improvement in lithium
(28:37):
ion battery with a product that I'm making out of
a molecule.
Speaker 1 (28:41):
Let's come to that battery breakthrough, because that's recent the
announcement at least, and you know, batteries are something that
the world wants a lot of right now, and so
having new materials is good. There's lots of innovation that's
happening in that space. But with any technology breakthrough, and
this is not just a battery problem, but any technology breakthrough,
there tends to be a certain amount of hype that
(29:03):
comes with it before we can see it in action.
Speaker 2 (29:06):
With this company.
Speaker 1 (29:07):
Well, we can take the example of algae fuels that
you know, Eggson was supportive of thought there was a breakthrough,
but now that doesn't become a practical solution.
Speaker 3 (29:17):
So how we should You should make the distinction between
pursuing a technology breakthrough and announcing one. And what we
talked about with biofuels was the need to produce the
productivity of algae, to generate the amount of oil to
make it economically viable. That's what we were working on and
we saw the potential there. We never announced the breakthrough
that said we were there. I would contrast that with
(29:39):
what we're saying with carbon material, which is to say
we had a view and an idea, we've developed the molecule,
we've graphatized it, we've put it into application, and we've
had third parties testing it, and those results are what
we're reporting on.
Speaker 2 (29:52):
That's a very different construct.
Speaker 1 (29:54):
So when might we see that carbon molecule in an
actual battery, in a commerce product.
Speaker 2 (30:00):
When will we see that.
Speaker 3 (30:02):
We're working really hard to get that commercialized by the
end of this decade. But I think you know, again,
in my mind, we don't over promise and hun to deliver,
and what we try to do is report on what
we're trying to do and accomplish. We've got to commercialize that.
We have gone from the lab to a demo unit
and we have to commercialize that.
Speaker 2 (30:18):
So that will take time.
Speaker 3 (30:19):
These are large scales, and by the way, we're only
going to pursue the things that are large and make
material difference. Stacks on mobile I can't have a bunch
of nickel and dime businesses. So it doesn't bother me,
and it should not suggest that because it's going to
take time, that it's not real. I think you know,
the difference may be in your mindset versus ours. We
think in terms of decades because we understand what it
(30:40):
takes to make these very large scale investments in the
time that it will take to bring them online and
then penetrate to markets. And that's true with all all products.
Speaker 1 (30:48):
Let's talk about some of the other low carbon solutions
that you've worked on. You have a lithium extraction idea
that you are working on now. Lithium prices, as you
well know, are even more volatile than fossil fuel prices.
Does that make the investment thesis less attractive?
Speaker 3 (31:08):
No, because we look at lithium no different than we
look at any other products that we make, which is
where does our production sit on the cost of supply curve.
So you know, if I independent upon a commodity, if
I'm in a commodity business where prices are set by
supply and demand, I do not control the supply and
I do not control the demand.
Speaker 2 (31:27):
So I'm a price taker.
Speaker 3 (31:29):
Across majority of my businesses, I'm a price taker, and
so I will never know where prices are going to be,
and I know that they will fluctuate based on where
demand goes and how much supply comes on. Our strategy
for being successful in a volatile market is to bring
production on that's the low cost of supply. Because I
know in these markets that the least efficient supplier required
(31:52):
to meet the demand is going to set the price.
I've got to be better than that producer to get
a margin. And that's what we're working on and in
lithium exactly the approach that we're taking. And I would
tell you with respect to that, we're still working to
convince ourselves that we can get on the low end
of the cost of supply curve. So we're building small
units to test that to drive the technology. Whether that
(32:12):
will be successful, we don't know yet. But what I'll
tell you is we know we have a concept. We're
demonstrating the ability to do that. We've made lithium. Now
the question is can we commercialize it at scale at
a cost that's competitive with Chinese cash costs.
Speaker 2 (32:25):
That's a question that's yet to be answered.
Speaker 1 (32:27):
And would that be the same answer for direct air
capture technology?
Speaker 3 (32:32):
Direct air capture the same thing everything that we're doing.
It's a little different in that it's a cost of abatement,
but it's the same principle. We have to be on
the low end of the cost of abatement curve because
if it can't compete economically, then we're not interested in
And I would tell you that's true even for the
businesses today that are being.
Speaker 2 (32:49):
Subsidized by policy.
Speaker 3 (32:51):
What I tell the organization is we can begin the
business based on that, but we're not going to end
up there. And so anything that we're doing, we have
to convince ourselves that over time we'll find a way
to get on the far left hand side of the
cost of supply curve so that when market forces take
over and by the way they have to if we're
going to be successful as society, that I better be
(33:11):
advantaged with respect to that production. And if I can't
clear that hurdle and convince myself of it, we won't
go in that business or make those investments.
Speaker 1 (33:18):
Another low carbon commitment you have is to reduce the
methane intensity of natural gas, so the amount of methane
that you leak as a result of the processes that
are involved in extracting and delivering natural gas to customers.
You have a goal for twenty thirty to try and
be near zero methane leaks, and that's crucial here at
(33:42):
COP thirty, where there's going to be a big discussion
around methane and maybe even a methane deal of some sort.
You know there's already a target, but how do you
actually get to that target. Lots of countries are talking
about that now. The Inflation Reduction Act would have benefited
companies like yours who are starting to work on reducing
methane intensity because it was going to put a methane
(34:03):
fee on those who leak. A lot that's gone now
to use stop investing in methane reductions. As a result
of the incentive going away.
Speaker 3 (34:11):
We were driving methanetense reductions before the IRA came along,
and we'll continue to it long after the IRA has expired.
So we don't our commitment to reduce emissions CO two emissions,
methane emissions isn't a function of policy being put in
place or being incentivized by penalties.
Speaker 2 (34:29):
Our objective there.
Speaker 3 (34:31):
Is to be a responsible operator, and from my perspective
from the dagout in this job, it was if we're
producing something, it's our responsibility and obligation to keep it
in the pipe, and we need work to do that.
And we've made huge progress in that, irrespective of the
commitments that we've made publicly. That was if you go
back in time, before methane was had the profile that
(34:51):
it has today, we began reducing our methane emissions intensity
before even this became a very public issue or a
high profile issue, and we're going to continue to do that.
Speaker 2 (35:00):
We make great progress with it.
Speaker 1 (35:02):
One of the things that has happened over the last
few years, which has been exceptional relative to other oil
and gas companies, is that EGXON has signed lots and
lots of permitting deals around the world, so recently grease,
but also you're re entering Iraq, Trinidad, Libya. Given where
we are in oil and gas markets, generally there's lots
(35:25):
of oversupply right now, prices have been falling. Why are
you expanding your permitting regimes aggressively?
Speaker 2 (35:32):
This is a depletion business.
Speaker 3 (35:34):
The bigger you are, the more production you have, the
bigger the whole you dig through depletion. So every barrel
who produces a peril that's not available to us. So
you can think of it, it's like having a bottle
of water. Every sip you take is less water in
the bottle. Eventually the bottle runs out of water and
you need to find a new bottle. So that's the
job that we have is as we continue to produce
as a large producer, we have to find ways to
(35:57):
replace the barrels that we've put on the market.
Speaker 2 (36:00):
That's a huge challenge.
Speaker 3 (36:01):
And given that if you go out to twenty fifty
and beyond that oil and gas will continue to play
an important role and the energy mix and providing products
that the world needs. We know those barrels are going
to be needed, and so finding opportunities to bring more
production on to fill the depletion curve is a critical
part of the job. There's only really three levers that
(36:23):
we have to pull there. One is for the resources
that we already have today, how do we recover more.
Speaker 2 (36:29):
That's a technology challenge that we're working very hard on.
Speaker 3 (36:33):
The other is you can go out and bring a
technology advantage or a production advantage or operating advantage to
buy somebody else's assets and produce those more effectively, get
better recovery, and do it at a lower cost. And
then the third is you've got to find new things
and explorations are a critical part of that.
Speaker 1 (36:50):
In getting those permits. How much has the Trump administration
been helpful?
Speaker 2 (36:54):
We don't work through the US government on those.
Speaker 1 (36:57):
Would you be interested in on gas assets in Azuela
if they were to open up?
Speaker 3 (37:01):
So you know, we've been expropriated for Minnesota at two
different times, and so I think we have our history there,
we have an experience set, and so certainly looking at
what follows and what's in place, and how comfortable and
confident are we that if we made investments, that we'd
see the return on those investments. It would be a
critical part to evaluating that. And then we'd have to
see what the economics look like. So I wouldn't put
(37:24):
it on.
Speaker 2 (37:24):
The list or take it off the list.
Speaker 3 (37:25):
We'd have to see what the circumstances are at the time,
which today I don't know what they're going to be,
if they're even different.
Speaker 1 (37:31):
You said previously that you don't work with the Trump
administration on permitting deals abroad, but there is a clear
indication from the Trump administration that they would like more
oil and gas production globally. Has there been any support
to help you figure out where that might be?
Speaker 2 (37:47):
We don't need any help in that area.
Speaker 1 (37:49):
Now. Key to your efforts to turn around performance at
Exomobil one hundred and fifty year old company has been
what you've classed as your focus on winning. Some of that, though,
has included layoffs and cost cutting internally, it's also doing
active as shareholders and even taking a rival to arbitration court.
Can you define what winning means to you?
Speaker 3 (38:11):
Yeah, you've mixed a lot of things up in that
question that frankly don't are. You've got apples, oranges, bananas
and pairs in there. I think, first of all, what
I would tell you is what we've been very focused
on the winning is bringing a unique set of capabilities
and competitive advantages to the marketplace and realizing those advantages
on the bottom line. And so if you look at
(38:31):
the transformation the company's been making, the changes that we've
made in our organization, it has been restructuring to more
effectively bring the advantages of scale, bring the advantages of
the integrated businesses that we have and the synergies that
exist between those businesses to the bottom line, taking advantage
of and driving technology and technology benefits to the bottom line.
(38:53):
It's a focus on execution excellence, to drive capital efficiency,
to drive reliability, to drive a lower maintenance, higher safety,
better environmental performance. And then it's been about unlocking the
potential of our people. That's what the changes that we've
been driving to unlock this advantage we've been very focused on.
We've made great progress, and the layoffs that came from
(39:15):
that is a function of the restructuring and better organizing
our people in a way that they can work more
productively and take advantage of everything Excellent Mobile has to offer.
It was more about effectiveness less about efficiency, But like everything,
when you focus on being more effective, you find efficiencies,
and so that's what's driving that With respect to the lawsuits,
(39:36):
this is really around protecting the value that we're creating
for our shareholders and importantly defending ourselves against activist attacks
which are generated by an agenda that's not aligned with
the value of the company or the value that we
create for our shareholders. And unfortunately, we've gotten to a
place in society where the courts are being used frequently
(39:57):
to bring challenges to some of these activities. We're going
to use the same tools that our antagonists use to
defend the value that we're creating for our shareholders.
Speaker 1 (40:06):
But sticking to layoffs, Egxon currently has fourteen thousand fewer
employees than in twenty nineteen, and there are plans to
lose another two thousand jobs. And Eggxon isn't the only
company doing this. We've seen jobs in Kinneco Phillips being
cut twenty percent to twenty five percent. Chevron has said
it would cut about twenty percent of its workforce. Do
(40:27):
you think it's a sign of the industry shrinking, that
its social license is eroding.
Speaker 3 (40:32):
I can't speak for Kindaco and Savon, I can speak
for ourselves, and it's not. If you look at the
layoffs that you're talking about for us like three percent.
Speaker 2 (40:39):
Of the workforce global workforce.
Speaker 3 (40:40):
So again this is we've been very focused on changing
the how we work, as I mentioned the transformation that
we're trying to make to unlock our competitive advantages. What
we've shifted to as we've changed the how is to
focus on the where. And if you look at our
global footprint and where we were located, it is based
on an operating model, a construct that was developed decades ago,
(41:03):
and so we're bringing our operational footprint, our facility footprint
in line with how we work today. That is my mind,
an optimization step and it is not a deep cut
to drive. And again it wasn't driven, wasn't focused on
a cost cutting. It was focused on taking advantage of
our people and the teamwork and the collaboration and the
(41:24):
innovation that comes from that that we have unlocked with
these changes, and we can only do that when people
are in the same location. I'm a big believer in
working together, not working remotely.
Speaker 1 (41:34):
Well, the two thousand ars yes, three percent, but since
twenty nineteen it's more than twenty five percent because you
have sixty three thousand employees now, so which comes.
Speaker 3 (41:43):
From the transformation in the organizational. We had I think
eleven independent unique companies siloed in our organization. We've gotten
rid of the silos today and reorganized. We have a
one team, one goal mentality. People are working collaboratively together
and so you need less people when you take away
the artificial construct that exists. That's a function of improving
(42:06):
your effectiveness, getting better at what we do, and you
see that in the results that we have. If this
was a pure cost cutting exercise, you wouldn't see the
improvement that we're getting in safety, personnel safety, and process safety.
You wouldn't see the improvement that we're getting in our
reliability and we now have record reliability with our operations.
You wouldn't see that in the projects that we're delivering,
which today are industry leading both in cost and schedule.
(42:28):
And so there's a lot of benefits that you can
see that's happening in the company because of this effectiveness thing.
Speaker 1 (42:33):
If we dig that five year period, the stock price
has certainly done wonders for eggs on. But if we
just take the last twelve months since Donald Trump's selection,
but since all these regulatory rollbacks, since the push to
try and get more fossil fuels. The stock price hasn't
done all that well. It's a little bit lower than
it was exactly one year ago. Now very much.
Speaker 3 (42:54):
You have to I think anytime you look at the
stock price of the company, you have to look at
the commodity price market that we're in. Our stock price
is highly correlated with commodity prices, and so it will
move up and down. So the absolute number is less
important than the relative number over time and the things
that you're doing to improve that. So I don't have
any concerns in that space.
Speaker 1 (43:13):
You've been in the role for nine years. How long
do you plan to stay on?
Speaker 2 (43:18):
Well, the board gets to decide that, not me.
Speaker 1 (43:22):
And what would you like to get done before you
step away.
Speaker 3 (43:25):
You know, we've made a lot of changes, as you've
talked about. Many of those have been recent. In fact,
we just announced this week the formation of a global
operations organization, and we've got to bed those in and
I think we're only beginning to see the benefits of
that change, and I would like to have time to
really focus the organization on improving the effectiveness of the
changes that we've made we are rolling out. I think
(43:47):
the largest instance of SAP were today under our corporation,
the first time in our history, we will have a
system that spans the entire corporation and a data structure
that's consistent for every business we do everywhere around the world.
So it unlocks huge opportunities if you think about that
in conjunction with AI, where data and data consistency and
(44:07):
integrity is so critical to the benefits of AI, we
will have an unmatched platform with more data than anybody
else in our industry. And so I think i'd like
to see that through GOT We've got a program that
we're developing that through the next several years.
Speaker 2 (44:20):
So there's still a lot to be.
Speaker 3 (44:21):
Done in the company that's going to keep me busy,
and I'd like to see some of that land and
begin to produce the results that we're counting on.
Speaker 2 (44:28):
Thank you, Dear, Thank you good talking with you.
Speaker 1 (44:45):
Thank you for listening to zero. If you liked this episode,
please take a moment to rate and review the show
on Apple Podcasts and Spotify. This episode was produced by
Oscar Boyd with additional help from annam Azarakis. Our team
music is composed by Wonderly Special. Thanks to Sommersaudi, Moses Adam,
Laura Milan and Sharan chen i'm Akshadrati Baksu
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