Positioning for a lower-carbon energy future

Report Jan. 5, 2021

In this article

Positioning for a lower-carbon energy future

A tanker being loaded with LNG at ExxonMobil's terminal in Papua New Guinea. 

Upstream

Oil and natural gas remain important energy sources even across the IPCC Lower 2°C scenarios. Natural gas is expected to play a key role in the projected demand shift from coal to lower-emission fuels for power generation and industrial use.

ExxonMobil is progressing 12 million tonnes per year of low-cost liquefied natural gas (LNG) supply opportunities to meet the growing global demand. This includes potential projects in Papua New Guinea (PNG), Mozambique and in the United States. As one of the largest natural gas producers in the U.S. and a significant producer of LNG around the world, the Company is well positioned to meet the future demand for these resources.

Rising oil demand will be driven by commercial transportation and the chemical industry's use of oil as a feedstock; fuel demand for light-duty vehicles is expected to decrease, reflecting efficiency improvements and growth in alternative fuels.

Downstream

Global demand for commercial transportation fuels, higher-value lube basestock grades, and finished lubricants is expected to grow, while worldwide gasoline demand will likely peak and then begin declining. Over the past several decades, through the application of advantaged technologies, capital redeployment and divestment, ExxonMobil has created a resilient portfolio of manufacturing sites. Portfolio improvement activity included the divestment of 22 of 43 refinery sites since 2000. In addition, competitiveness has been improved by co-locating approximately 80 percent of refining capacity with chemical or lube basestock manufacturing. ExxonMobil's average refinery throughput is 75 percent larger than industry providing economies of scale for lower cost transportation fuel production. The Company invests in advantaged, integrated assets with proprietary process and catalyst technology to improve the yield of high-value products consistent with demand trends. This continuous high-grading of the portfolio has positioned the Company's downstream business to remain competitive across a wide range of future scenarios (see chart below).

ExxonMobil's downstream product shift

2027 vs. 2017

Chemical

Worldwide demand for chemicals is expected to rise by approximately 45 percent by 2030, underpinned by global population growth, an expanding middle class and demand for increased living standards. These factors, together with a recognition of the lower greenhouse gas emissions of plastics versus alternatives,1 correspond to an increase in demand for a variety of everyday products, from food packaging to appliances, vehicle parts to clothing. Many of ExxonMobil's chemical products help customers reduce their greenhouse gas emissions by making cars lighter and more fuel efficient, improving recyclability and extending products‘ shelf life, therefore, reducing waste. Due to robust growing demand, the Company's investment strategy is targeted at high-value sectors with approximately 70 percent of new planned capacity additions focused on its performance products (see chart below). 

Potential new areas of investment

In addition to major capital investments in base business lines, the Company is also investing in significant research and development (R&D) programs that will create potential opportunities to enhance and expand its portfolio. These programs are discussed further in the sections ahead and include R&D efforts in CCS, hydrogen, advanced biofuels and energy-efficient manufacturing. 

Performance product sales growth

volume, indexed

1 Lower overall greenhouse gas emissions of plastics over alternatives is over the full life cycle of the plastic. American Chemistry Council (ACC), 2018. Life cycle impacts of plastic packaging compared to substitutes in the United States and Canada, theoretical substitution analysis. Prepared by Franklin Associates for ACC.
https://plastics.americanchemistry.com/Reports-and-Publications/LCA-of-Plastic-Packaging-Compared-to-Substitutes.pdf

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