Viewpoints July 10, 2023
Thoughts on the energy transition
Viewpoints July 10, 2023
That event brought together a host of energy and environmental experts, government officials, academics, and other very knowledgeable people over a topic folks can’t get enough of. I was honored to participate and found the discussions and presentations insightful and illuminating.
Still, I can’t help but think the world needs more clarity – and consensus – on some basic points about such a serious topic.
Most importantly, what is meant by the term “energy transition,” anyway? Transitioning to what? And from what?
A baseline of understanding
If those seem like some getting-back-to-basics questions, they are. But they’re critically important ones.
After all, lots of government policy – not to mention billions (or even trillions) of dollars in private-sector investments – is tied to how we approach the energy transition. We need to get it right.
So, let’s establish a couple points to get us all on the same page.
First, the shaping of the modern world over essentially the past two centuries – notably the astounding reduction in extreme global poverty and, comparatively, the unprecedented, massive increases in global economic prosperity – owes in part to society’s harnessing of fossil fuels like oil, natural gas, and coal, along with nuclear power and renewables, to improve living standards.
Fossil fuels have generally dominated the global energy economy from the early days of 19th century industrialization through the post-World War II economic boom.
And that’s still the case today. My panel’s moderator at the Reuters Energy Transition event ruefully noted, “The share of hydrocarbons in the primary energy mix globally has remained unchanged at about 80% for the last 20 years.”
Which brings us to my other major point: The world needs to decarbonize the global energy system as CO2 emissions increase the risks of climate change.
So, we need the energy that fossil fuels provide. But we also need fewer emissions. Got it?
Moving forward … but how? And who?
It seems obvious, then, that we should focus efforts on transitioning to a global energy system that meets the increasing needs of a growing population yet produces substantially fewer emissions. The goal, according to the International Energy Agency, is Net Zero by 2050, and while the world is not currently on that path, it’s definitely a noble ambition.
Some say we should just “get off” oil and natural gas today. But it’s not that easy. There simply isn’t anything available to replace the huge volumes of energy that hydrocarbons produce every single day – at least not in a way that has the necessary energy density, availability, reliability, and transportability.
It’s not as simple as flipping a switch. Getting to a lower-carbon future really is going to be a transition – something that takes time and must be managed thoughtfully.
Technology and scale matter
Companies like ours have a big role to play in helping bring this transition about. We have extraordinary engineering expertise, a deep knowledge of energy systems and markets, and decades of experience working on a global scale.
I know that the involvement of oil and natural gas companies makes some people uneasy. There are critics who think energy companies should not be involved at all in the discussions of how to get from A to B.
What they fail to appreciate is that many of the technology solutions that must be developed to build out a lower emission energy system will have to come from companies that have our skill sets and our experience bringing technology to scale. It would be folly to exclude so many of the world’s top engineers and scientists from helping craft the solutions of the future.
At ExxonMobil, our role in the energy transition is to play to our strengths. Our core business has been supplying reliable, affordable energy at scale. We’re going to continue doing that because there can be no disruption in the supplies of energy people need every day.
But we’re also using our scientific and engineering expertise to advance the large, industrial-scale solutions necessary to deliver a lower-emissions future.
That means carbon capture and storage – with the potential to capture 90% of CO2 emissions at power plants and industrial facilities – not to mention hydrogen and lower-emission fuels for transportation.
We’re working to bridge the gap between technology development and readiness, to create solutions that can scale up and help meet the energy needs of a planet with 8 billion people and growing.
Working smarter and faster
Society’s effort to decarbonize the global energy system has got to move faster. So how do we accelerate taking solutions from lab to scale?
We think it’s through increasing collaboration and doing things in parallel, not in a series. The panel I was on at the Reuters event was titled “Bridging the Gap Between Technology Development and Readiness,” and I was joined by Rob Stoner from the Massachusetts Institute of Technology. ExxonMobil has nearly a decade-long relationship with MIT and I have had the good fortune of working very closely with Rob through our MIT Energy Initiatives program.
On the panel, we discussed the critical need for industry to collaborate with academia. Academia is the place where ideas are fostered and generated, and fundamentals are understood. Industry is where projects of massive scale, requiring fundamental knowledge as well as project expertise, are executed.
Do you see the connection?
If we can shape the idea generation with a line of sight to scale, define the pathway to scale, and progress both in parallel, we have a much better probability of accelerating the transition. The energy challenge is about getting solutions at scale. If we want to accelerate, we need to collaborate.
Here at ExxonMobil we have a long history of collaboration with universities, National Laboratories, and companies of all sizes. We are continuously looking for new opportunities to collaborate, where each participant brings unique skills and capabilities to the table.
The energy transition is going to be a journey. I’m happy that my ExxonMobil colleagues and I are walking these early steps.
Imagine that – developing energy, climate solutions with science and technology
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