When the oil giant ExxonMobil sponsored an event at the re-energizing Democratic national convention (DNC) in Chicago last week, it was disrupted by climate activists outraged that big oil was invited on to an influential political platform. “Exxon lies, people die,” protesters shouted before being evicted.
The event included a “fireside chat” with Vijay Swarup, the company’s senior climate strategy and technology director. Swarup is a 30-year Exxon veteran who headed the company’s research and development team for just under a decade, and oversaw initiatives on biofuels, carbon capture and storage (CCS) and hydrogen.
Speaking at the DNC event, Swarup said: “We need new technology and we need policy to support that technology. We need governments working with private industry.” The Exxon executive also praised the Biden administration’s landmark climate legislation, the Inflation Reduction Act (IRA), passed in 2022, for helping the company pursue new CCS and hydrogen projects.
He is not alone in that regard. At an oil summit in Houston earlier this year, Exxon’s CEO, Darren Woods, said, “I am very supportive of the IRA” and acknowledged the legislation “especially benefited” the company.
Exxon is set to receive billions in public subsidies because of the legislation.
The US multinational has not always been such a strong advocate for the technology, but now argues that CCS is crucial in the climate fight and works, in theory, by capturing carbon dioxide from hard-to-abate heavy industries, like steel or cement, and pumping it underground to be stored indefinitely. Exxon champions itself as a “global leader” in CCS, maintaining it is driving “meaningful change” in the fight against global heating.
But an estimated two-thirds to three-quarters of the carbon currently captured in the US is used to extract hard-to-reach reserves, a practice known as enhanced oil recovery (EOR). And the reputation of CCS has largely been one of “underperformance” and “unmet expectations”, the International Energy Agency said in 2023.
And Exxon’s shift to promoting CCS – or any climate solution – is relatively recent. For much of Swarup’s three decades at Exxon, the oil giant was accused by civil society and climate scientists as being behind a vast network of neoliberal organizations that have denied evidence about the climate emergency, manufactured scientific doubt and delayed regulatory action.
Michael Mann, one of the world’s leading climate scientists, outlines in his book the New Climate War, the substantial role Exxon played in both denying the threat of climate change and opposing efforts to move toward clean energy. Journalist Steve Coll also recalls in his 2012 book Private Empire: ExxonMobil and American Power how Exxon remained in the defiant “fuck you, no apologies, oil-is-here-to-stay mode”.
ExxonMobil declined to comment when asked questions by the Guardian for this article. In response to criticisms, Exxon previously said it had always maintained that “climate change is real, and we have an entire business dedicated to reducing emissions”.
Peeling back the green facade, a different narrative appears, the company’s critics say. An analysis of Exxon documents, investor presentations and congressional committees reveals how the corporation redirected the climate policy response away from solutions such as wind and solar and towards unproven technologies like CCS. One of the wealthiest companies on the planet is now set to pocket vast amounts of public money for a technology many scientists believe is the wrong solution to the climate crisis.
“Oil companies that make billions in profits don’t need public subsidies. It’s not a good idea to support companies that are the cause of climate change, but also CCS should not be a priority for funding,” said Catherine Mitchell, professor emerita of energy policy at the University of Exeter and an IPCC expert on climate mitigation.
“Increasing renewable energy and requiring improved energy efficiency for buildings or supporting secure supply chains for renewables, energy efficiency and batteries would be a far more important investment,” Mitchell added.
For decades, Exxon’s scientists understood the potential of removing CO2 to assist in the climate fight. However, the technology was dismissed as too expensive, too polluting and because it might increase energy consumption.
By 2009, Exxon was doubling down on other so-called climate solutions, spending hundreds of millions of dollars researching biofuels from algae. And it was Vijay Swarup who led the company’s flawed efforts on algae. Despite worrying that critics would accuse it of greenwashing, Exxon heavily promoted algae in its adverts.
Until 2018, Exxon’s thinking on carbon and capture still centred around getting more oil out of the ground by injecting CO2 via EOR. And the company had a team exploring whether “it was even possible to permanently store captured carbon”. Internally, Exxon foresaw CCS having only a limited role, with one ex-company scientist believing “CCS to be a mediocre-at-best contributor to carbon sequestration”
That year, though, it appears there were two new tactics in the company’s lobbying and media strategy. First, as the US Congress passed an extension and increase for the 45Q carbon capture tax credit, Exxon officially launched its CCS business and started lobbying Congress for money. The company employed an army of lobbyists to get what it wanted.
According to lobbying disclosures analyzed for the Guardian by Open Secrets, a non-profit tracking money in politics, the oil giant has spent $54m on lobbying since 2018, with over a hundred separate lobbying efforts on CCS, hydrogen, EOR or other related issues by registered lobbyists since 2021. Exxon has also spent $8.3m in federal campaign contributions since 2018, with about a third going to Democrats.
Secondly, Exxon began shifting the debate from transitioning to renewables to looking at the “molecular” impact of fossil fuels. The documents suggest that the goal was to convince politicians that it was possible to reduce the climatic impact of burning fossil fuels via CCS, in order to carry on using oil for decades and not shift to wind or solar. Woods, the Exxon CEO, later told analysts in 2021 he was “encouraged” by how quickly the conversation had evolved around the policy response to include CCS as well as renewables.
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In 2019, Exxon’s lobbying on CCS intensified. The company pushed for direct government funding for CCS, particularly at the US Department of Energy (DOE). With the passage of the bipartisan infrastructure bill in November 2021, in which $12bn was allocated for “carbon management research, development, and demonstration” for the oil industry, it appears that Exxon got at least some of what it asked for.
Exxon also played a “central role” in drafting a DOE-sponsored report on CCS that determined Congress would need to create an incentive of about $90 to $110 per tonne to support CCS deployment. Woods stated that the 45Q tax credit, which was expanded through the 2018 Bipartisan Budget Act to give companies $35 to $50 per tonne, “wasn’t sufficient”.
In 2021, Exxon stepped up its interest in CCS and formally launched its Low Carbon Solutions business. The company was still lobbying for further regulatory certainty and additional fiscal incentives, which Exxon argued was “critical” to unlocking the full potential of CCS. By the summer, US lawmakers were advocating for bipartisan legislation specifically for carbon capture. Exxon was now pushing for a $100-per-tonne subsidy for CCS.
Parts of the carbon capture bill were eventually included in the Inflation Reduction Act (IRA) in August 2022. Exxon did not get $100 per tonne, but the rate jumped to $35 to $60 per tonne for EOR and $50 to $85 for permanent storage.
In its lobbying reports, the company admits “engaging” Congress on the 45Q and IRA and “advocating for supporting policies” for CCS under the IRA. Again, its strategy paid off. Exxon took advantage of the increased incentives, buying Denbury for $4.9bn, and acquiring its strategic CO2 pipeline network, enhanced oil recovery assets and storage facilities. This “cemented the supermajor’s lead” in the race to develop CCS.
The oil giant now brags about how much money it will make from CCS, even though it acknowledges its plans for carbon capture were economic before the IRA. The head of its Low Carbon Solutions unit, Dan Ammann, says the low-carbon business could eventually be “larger than ExxonMobil’s base business”.
According to a transcript of a 2023 presentation seen by the Guardian, Exxon is telling investors that the opportunities for climate mitigation are “immense”: a $14tn potential market. Exxon also says it is “focused on the $6tn molecules opportunity as that’s what lines up with our competitive advantages”and is expecting to make “double-digit” returns. This huge profit opportunity is only possible because the company persuaded policymakers to bet on “carbon intensity” and “molecules” as climate solutions over renewables.
Meanwhile, Exxon is still investing heavily in fossil fuels.
Since 2018, when the company began promoting its apparent commitment to a low-carbon future, 218 new oil and gas licenses have been awarded to projects in which Exxon owned a stake. If fully exploited, these new projects alone could lead to an estimated 429 tonnes of CO2, according to analysis by the International Institute for Sustainable Development (IISD).
In the past six years, almost $2.6bn was allocated for wells and other exploration facilities in projects that Exxon had invested, with more than $11bn on development or expansion of existing oil and gas sites, according to industry data from Rystad analyzed by IISD.
And Exxon this week forecast that demand for oil would remain virtually unchanged for the next 25 years. This means the company believes that the energy transition will fail to reduce the demand for oil. Therefore, Exxon will keep on drilling.
At the UN climate talks in Dubai last year, Swarup said that Exxon had a two-point goal: to continue supplying fossil fuels at scale and to “decarbonise”. As American tax-payers pick up the check, the IRA subsidization of CCS allows Exxon to do both, much to the concern of leading scientists.
“I couldn’t imagine a greater perversion of the incentive structure. We need to be subsiding solutions to the climate crisis, like clean energy, not causes, like fossil fuels,” said Michael Mann, presidential distinguished professor and director of the Penn Center for science, sustainability and the media.