Exxon’s New Carbon Capture Effort Looks a Lot Like Its Old One

(Bloomberg) -- Exxon Mobil Corp. pledged to spend $3 billion on low-emission technologies through 2025 to address investor concerns over its environmental record. The trouble is, its latest plan offers little in the way of anything new.

Exxon will “commercialize” its low-carbon technology portfolio through a new venture named ExxonMobil Low Carbon Solutions, the Irving, Texas-based company said in a statement on Monday. The invested capital represents less than 5% of the oil giant’s capital budget and includes a series of old projects.

They will also benefit from government support.

The “opportunities can become more commercially attractive through government policy, including the United States tax credit 45Q, which ExxonMobil supports, and other supportive policies in the European Union, Canada and Singapore,” the company said.

Exxon is under intense pressure from environmentalists and investors both for not moving fast enough on climate change and delivering weak financial performance compared with peers over the past five years. Activist investor Engine No. 1 last week formally nominated four directors to Exxon’s board to challenge the company on both fronts following a year in which the stock dropped an unprecedented 41%.

READ: Exxon Faces Proxy Fight After Activist Nominates Directors

Exxon has sought to fend off criticism with targets to reduce emissions intensity and now an increased focus on carbon capture.

But many of the initiatives are likely to disappoint. Take LaBarge, a gas facility in Wyoming. A Bloomberg News investigation last year found that Exxon had planned to build one of the world’s largest carbon capture operations at the site after working on it for years. The cost was pegged at $260 million. But instead it was indefinitely delayed, with Exxon citing the fallout from Covid-19. Just few months later, Exxon announced plans to expand crude operations off the coast of Guyana at a cost of $9 billion—35 times higher.

Exxon claims LaBarge already captures 7 million tons of carbon dioxide a year, nearly 80% of the company’s total. That may be true but it’s not the green boon it appears to be on paper. Very little carbon dioxide is captured from the air. Most of it is pumped up from the ground as a byproduct of natural gas and helium, processed and sold to crude operators nearby to enhance oil recovery.

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Exxon’s new plan also mentions its venture with Danbury, Connecticut-based FuelCell. Over the past five years, the companies have been working on carbonate fuel-cell technology that captures carbon dioxide spewed from industrial operations and uses it in a chemical process to generate electricity. In 2019, when FuelCell was nearly insolvent, the oil giant thew it a $10 million lifeline for the right to use its technology.

FuelCell hasn’t posted an annual profit since 1997, yet its stock has soared in value since mid-November as interest in hydrogen and fuel cells in general has boomed.

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