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President Joe Biden announced his decision last week to suspend new natural gas export permits. Ting Sheng—Bloomberg/Getty Images
President Joe Biden’s decision to suspend new liquid natural gas export permits is being touted as a victory by climate change activists. But ExxonMobil Chief Financial Officer Kathy Michels, who opposed the decision, said Biden’s call was not environmentally sensitive enough.
“By reducing production, [liquified natural gas] In fact, it will have a negative impact on the world reaching net zero sooner or later,” Michels told Bloomberg. “That’s a mistake.”
The United States is the world’s largest exporter of LNG. LNG is a type of natural gas that is cooled into a liquid to reduce its volume and make it easier to transport. Because energy is required to condense the gas, LNG production has a higher environmental impact than traditional natural gas.
But Exxon contends that LNG is environmentally friendly, emitting about 40% less greenhouse gases than coal.
“Cutting down LNG exports means there will be less U.S. natural gas available to replace coal around the world,” an Exxon spokesperson said. luck.
Although natural gas burns cleaner than coal and oil and has helped reduce emissions from U.S. power plants by 35% since 2005, the use of natural gas has meant that once expensive renewable energy has become more affordable. It was intended to be a temporary solution to coal until it became available at a reasonable price. Not only has the cost of producing energy from the sun and wind become cheaper than oil and coal, but it has also exposed the weaknesses of natural gas. Natural gas is primarily composed of methane, a heat-trapping gas that can leak from wells and pipelines and cause emissions comparable to coal.
The International Energy Agency says we are not weaning ourselves off natural gas fast enough. To reach net-zero global emissions by 2050 and limit temperature rise to 1.5 degrees Celsius, which could dampen the effects of severe climate change, the following efforts are needed: According to the IEA, there are no new oil or gas fields.
Exxon has another reason to oppose Biden’s export ban. Together with Qatar Energy, it plans to independently sell LNG produced in the U.S. Gulf Coast. Michels told Bloomberg that the project is scheduled to begin next year under the joint venture Golden Path.
Biden’s decision to suspend natural gas exports, announced last week, is part of the White House’s efforts to cut greenhouse gas emissions in half by 2023. The moratorium will allow the Department of Energy to consider the economic and environmental impacts of LNG projects aimed at exporting to Asia and Europe. Energy Secretary Jennifer Granholm said the process will take several months.
Beyond climate change concerns over Exxon’s suspension of LNG exports, other industry groups have argued that the suspension could reverse efforts to curb Russian LNG exports across Europe. . The American Petroleum Institute, an oil and gas lobbying group, called Biden’s decision “a win for Russia and a loss for America’s allies, American jobs, and global climate progress.” Stated.
Exxon’s commitment to net-zero emissions is wavering
Exxon has been using climate-friendly language for years, and CEO Darren Woods frequently discusses the 2015 Paris Agreement with investors.
“If you were an alien dropped into that meeting from space, you would think this is a company focused on solving climate change,” says the Union of Concerned Scientists’ Climate and Energy Program Accountability Campaign Director Kathy Mulvey said. luck In 2021.
Despite talking green and setting a goal of net-zero greenhouse gas emissions by 2050, Exxon’s actions didn’t always match the enthusiasm of its CEO’s speech.
Corporate scientists have known since the 1970s that burning fossil fuels harms the climate, but have publicly denied it for decades. Exxon’s net-zero goal also falls short in addressing other environmental harms. Exxon’s net-zero emissions goal does not include Scope 3 emissions or emissions from the people who consume its products, making Exxon one of the five Western oil majors that have not set targets to eliminate those types of emissions. It’s just one of the companies.
According to Exxon’s 2023 Climate Change Solutions Advancement Report, Exxon is not targeting Scope 3 emissions. This is because it is the fuel that the customer burns and therefore is difficult to determine.
Activist investors are trying to change Exxon’s carbon emissions policies from within. In 2021, activist investor Engine No. 1 added three directors to Exxon’s board against the company’s wishes in an effort to help reduce the company’s carbon footprint.
However, these shareholder efforts were unsuccessful. Climate activist investors on Thursday warned Exxon shareholders that the company would reduce its Scope 3 emissions after the company filed a lawsuit against investors accusing it of pushing an “extreme agenda” onto the ballot. It has withdrawn a petition calling for a vote on whether a target should be created. This is the first time Exxon has filed a lawsuit to block shareholder activists, and despite the resolution’s withdrawal, Exxon plans to continue its lawsuit.
“We believe there are still important issues for the courts to resolve,” an Exxon spokesperson said. luck In a statement.
In the past, similar proposals targeting Scope 3 emissions reductions have failed miserably. Last year, 11% of the company’s shareholders voted in favor of the emissions reduction proposal, less than half the 27% support for the proposal the previous year.
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