Kevin Crowley, bloomber News
HOUSTON
EnergiesNet.com 03 08 2023
Exxon Mobil Corp. Chief Executive Officer Darren Woods used his prime-time address at the CERAWeek by S&P Global conference in Houston to criticize European energy policy, which in his view has gone too far.
After years of deterring investment in oil and gas, Europe had no alternative but to burn coal to keep the lights on when Russian gas stopped flowing. But by continuing to hit the oil and gas industry with “punishing” measures like the European Union’s windfall tax, things will only get worse, Woods said Tuesday.
“What we saw in Europe should be a wake-up call,” he said. Exxon “stepped back and reevaluated” its investment strategy in the continent, he continued. Meanwhile, it’s plowing ahead with new projects in the US, where the Inflation Reduction Act offers incentives for companies rather than punitive measures.
US carrots versus European sticks — that particular metaphor has become a recurring feature at CERAWeek. There’s a noticeable spring in the step of American oil executives at the conference, and it’s not just because of those IRA carrots: record profits and $128 billion of cash showered on shareholders in the past year probably also have something to do with it.
But there’s also a sense in Houston that they’ve turned a corner in the climate debate, as well. “Balance” is now the buzzword for executives when describing the energy transition, as affordability and security have surged to the top of the agenda, jostling for attention alongside sustainability.
BP Plc and Shell Plc’s recent pivots toward investing more in oil and gas only reinforce the consensus that it’s going to be hard to kill off fossil fuels even as the clock ticks on the climate crisis.
For all the criticism Exxon has endured, including from its own shareholders, Woods insists that his decision not to waver from oil and gas has been the right one. Investors appear to agree with him: Exxon’s stock is up 134% since the pandemic, nearly double the performance of its closest peer Chevron Corp.
“We saw in 2018, particularly with a lot of the climate emphasis, that people were pulling back from” oil and gas, he said. “We leaned in. We were heavily criticized for doing that at the time, but we recognized that, at some point, that supply was going to be needed.”
bloomberg.com 03 08 2023
