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31 August 2023

ExxonMobil Urges Continued Fossil Fuel Investment for Decades Ahead

ExxonMobil Corp. has projected that the world will face challenges in meeting its 2050 emission reduction targets and has expressed its support for sustained investment in the oil and gas industry for decades to come, asserting that fossil fuels will remain essential to the global economy.

In an outlook report released this week, the energy giant stated, "Overall, energy-related CO2 [carbon dioxide] emissions are projected to peak at more than 34 billion metric tons sometime this decade and then decline to 25 billion metric tons in 2050."

This projection exceeds by more than twice the emission reduction target by 2050 required to keep global temperature increases below two degrees Celsius, as outlined by ExxonMobil.

The company pointed out, "The average of the IPCC’s [Intergovernmental Panel on Climate Change] Lower 2 degrees C scenarios requires emissions to fall to around 11 billion metric tons by 2050", citing data from the United Nations' sixth assessment report published in 2022.

ExxonMobil emphasized that the economic growth of developing nations will continue to drive energy demand through 2050. While renewables and lower-emission options are gaining ground in the energy mix, petroleum and natural gas are projected to still account for 54 percent of the energy mix in 2050.

The outlook report stated, "The critical question is how that growing energy demand will be met," underscoring the significance of oil and gas due to their abundance and cost-effectiveness.

It further added, "Oil and natural gas remain unmatched in meeting the world’s energy needs. They are energy dense, portable, available, and affordable — and serve as essential raw materials for many products we use today."

The report acknowledged that while oil use is expected to decline significantly in personal transportation, it will remain essential for industrial processes and heavy-duty transport such as shipping, long-haul trucking, and aviation.

Regarding natural gas, the report projected a more than 20 percent increase in its use by 2050, emphasizing its role as a reliable and lower-emissions source of fuel for various applications, including electricity generation, hydrogen production, and heating for industrial processes and buildings.

ExxonMobil stressed the necessity of sustaining investment in oil and gas through 2050 as production naturally declines by five to seven percent annually.

The report highlighted, "Fossil fuels remain the most effective way to produce the massive amounts of energy needed to create and support the manufacturing, commercial transportation, and industrial sectors that drive modern economies." It emphasized the importance of affordable decarbonization in these sectors, which collectively contribute to half of all energy-related emissions.

ExxonMobil presented three key factors that would be pivotal in achieving emission reduction goals: policy support, technological solutions, and societal-level incentives. The company recognized the ongoing energy transition but stressed the need for further scale and urgency to meet society's net-zero ambitions.

On the topic of public policy support, it stated, "Incentives like those in the U.S. Inflation Reduction Act can provide the necessary catalyst to begin scaling up low-carbon solutions." It also emphasized the importance of permitting reform and transparency in adapting to changes.

ExxonMobil presented three "scalable technologies" as essential in reducing emissions: carbon capture and storage, hydrogen, and biofuels.

Regarding societal-level incentives, the report noted, "Governments worldwide cannot sustain indefinite financial support for emissions reduction." It emphasized the need to transition to market-driven mechanisms where society collectively incentivizes emission reduction.