(Reuters) – Improving economics and government policies are creating opportunities for carbon capture and storage, Exxon Mobil Chief Executive Darren Woods said at an energy conference on Tuesday.
Exxon, under pressure from activist investors who want the company to develop more ambitious plans for the energy transition, recently launched a Low Carbon Solutions business to focus on carbon capture and storage.
Exxon will “leverage into what we see as a converging set of forces,” Woods said at IHS Markit’s CERAWeek virtual conference, as technologies improve and government policies, especially in the United States, focus on supporting carbon capture and storage.
The largest U.S. oil producer also plans to boost investment in new technologies related to hydrogen, but that remains expensive, Woods said.
Exxon anticipates continued global growth for natural gas in industrial operations and electric generation, where it can complement the intermittency of wind and solar, Woods said.
“One of the challenges with gas is the lack of alternatives in all applications in all areas of the world,” Woods said. “Gas will play a role, but with gas comes emissions.”
A market price for carbon would be the most cost effective way to reduce emissions, Woods said.
“Government should not pick winners and losers,” Woods said. “It should not pick the sectors, but open it up and have credits and market incentives.”
Several of the world’s major oil companies have set ambitious goals to shift new investments to technologies that will reduce carbon emissions to slow global warming. Exxon since December has set emissions intensity targets and launched the Low Carbon Solutions business, but has maintained the view that global oil and gas demand will grow.
(Reporting by Jennifer Hiller; Editing by David Gregorio)