Exxon Mobil CEO on the ‘dirty secret’ of Net Zero

quote:

---

As it stands, we’re not on the path to net-zero emissions by 2050, Exxon Mobil CEO Darren Woods said. And maybe that’s not Big Oil’s fault.

“The dirty secret nobody talks about is how much all this is going to cost and who’s willing to pay for it,” Woods, who replaced Rex Tillerson at the helm of Exxon Mobil in January 2017, said. “If you look at the policies [governments] are putting out, the cost is very implicit. It’s not an explicit cost.”

Most objective analyses would suggest that “we’ve waited too long to open the aperture on the solution sets in terms of what we need, as a society, to start reducing emissions,” Woods told Fortune CEO Alan Murray and editor-at-large Michal Lev-Ram on a recent episode of the Leadership Next podcast. Plus: “We’re not investing nearly enough in the technology.”

Exxon Mobil is No. 3 on the Fortune 500 and the largest gas and oil corporation in the U.S., having posted a $36 billion profit in 2023. The firm has “tabled proposals” with governments worldwide, Woods said, “to get out there and start down this path using existing technology.” But it’s been hamstrung by a need for cost transparency—and the fact that everyday people are responsible for generating the emissions too.

---

quote:

---

Woods, though the head of a fossil fuel giant, has some ground to stand on; he was the first oil and gas CEO to appear at a UN climate summit when he attended COP28 late last year, advocating for reducing emissions and investing in clean energy. In 2022, Exxon Mobil invested $17 billion in its lower-emission initiatives. It has long maintained that greenhouse gas emissions, not fossil fuels, are behind climate change—claims over which it is now being sued.

The main issue, in any case, is that fixing the problem is currently too expensive, Woods told Murray and Lev-Ram. “People can’t afford it, and governments around the world rightly know that their constituents will have real concerns,” he went on. “So we’ve got to find a way to get the cost down to grow the utility of the solution, and make it more available and more affordable so that you can begin the [clean energy] transition.”

---

quote:

---

The challenge, in Woods’ mind, is reframing the cost as necessary on both a corporate and personal level, rather than a nice-to-have. It’s anyone’s guess how long that would take. “I can’t predict if we’ll be successful in that space or not.” A popular suggestion for passing the cost off to consumers is carbon taxes or a built-in charge on purchased goods, though many experts nonetheless encourage the most offending firms to shoulder the cost burden, not individuals.

---

quote:

---

Murray pointed out the subsidies Exxon Mobil has received through the 2022 Inflation Reduction Act that are geared at encouraging low-carbon energy solutions. But Woods said that too is a Band-Aid solution. “The way that the government is incentivized and trying to catalyze investments in this space is through subsidies,” he said. “Driving significant investments at a scale that even gets close to moving the needle is going to cost a lot of money.”

The U.S. government is trying to “get things moving” through those subsidies, he added. “But I would tell you building a business on government subsidy is not a long-term sustainable strategy—we don’t support that.” Exxon Mobil has committed to using its IRA subsidies to advance its low-carbon energy solutions, “but at the same time, we’re advocating to move to market forces, either through regulation and prices on carbon.”

The challenge with all those solutions, he said, “is the cost ultimately, explicitly bears itself in the price of products out there.” And nobody wants to pay up.

---