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OK, let's dive in. My latest Harder Line column takes a close look at Exxon's climate-change strategy: its report to investors and a little-noticed session on the topic with analysts earlier this month. And then Ben Geman will take things over for the rest of today’s news.
ExxonMobil is betting on two costly technologies — carbon capture and biofuels — and overly optimistic data to drive its climate-change strategy.
Why it matters: As the world’s largest publicly traded oil company, Exxon is the face of America’s fight over climate change and fossil fuels. While other oil majors like Shell and BP are branching out to wind and solar, and investing in electrification technologies, Exxon has made its existing natural gas and liquid fuels business the focus of its climate strategy.
Exxon is at the center of lawsuits alleging big oil companies knew about and concealed the dangers of climate change for decades, and a record share of its investors have urged it to be more transparent about the risks climate poses to its business. That’s a trend proliferating within other publicly trading fossil-fuel companies.
A new Exxon report on navigating a carbon-constrained world, combined with recent comments by top executives, make Exxon’s approach clear. The company is doubling down on a decade-old strategy by making relatively small, long-term investments in two costly technologies: carbon capture and algae biofuels as a way to stay focused on its core hydrocarbon business.
Exxon held a first-ever dedicated session on climate change with analysts earlier this month during an annual meeting, a discussion that received little outside coverage. An Exxon spokesman, when reached for comment, referred to that session.
Bottom line: Exxon's strategy is based on a range of scenarios with favorable assumptions for its core fossil-fuel business that lets it address climate change without fundamentally changing its business model as a company that extracts fossil fuels. That makes it an outlier among giant oil companies that are making bigger bets outside the core hydrocarbon space.
Drill down for the rest in the Axios stream here.
Launched: China, the world’s largest crude oil buyer, today began trading of the first yuan-denominated oil futures trading contract on the Shanghai International Energy Exchange.
Why it matters: It’s a move by the energy-hungry nation to bolster its influence over pricing. Per the Financial Times:
Early results: “The most actively traded futures contract due for delivery in September closed up 3.3% at 429.9 yuan ($68.07) per barrel...after opening up more than 6% from a starting reference point of 416 yuan per barrel,” The Wall Street Journal reports from Shanghai.
What’s next: A note Monday from Wood Mackenzie looks at the potential influence. “As a start, we expect more influence on Basrah Light and Oman prices as they account for a significant portion of the contract volumes. China imports about 600 kb/d of Oman crude,” per research director Sushant Gupta.
Familiar face: E&E News broke the story over the weekend that Wells Griffith, an Energy Department official who worked on President Trump's campaign, is heading to the White House as an international energy and climate adviser.
Auto rules: Via WSJ, EPA has tentatively concluded that carbon emissions and mileage rules for cars and light duty trucks covering model years 2022–2025 should be scaled back.
EV charging: Electrify America, a Volkswagen unit that's investing in a nationwide charging infrastructure effort, has registered to lobby for the first time, a new filing shows.
Solar: Sunrun, now the largest residential solar company, has tapped the boutique firm VantageKnight, a filing shows.
Oil-and-gas: The Washington, D.C., office of France-based multinational oil giant Total has registered to lobby, according to a newly posted filing.
Puerto Rico: The energy services firm Mammoth Energy Services has brought on Akin Gump for work on "railroad transportation and utility restoration."
More Puerto Rico: The law firm McConnell Valdés, on behalf of the power company Engie North America, has tapped the firm Cumberland North America for work related to the island's energy system.
“You’ve got a geopolitical mega storm coming in May.”— Oil analyst Bob McNally, quoted in the Houston Chronicle
The context: McNally, president of the Rapidan Group, is talking about looming events including the next White House decision on Iran energy sanctions. He expanded on the comment too, saying via Twitter:
"May 2018: Iran sanctions, Venezuela 'election' & sanctions, Iraqi elections, possible Trump-KJU sitdown. Unusually high # of major foreseeable #crudeoil risk events falling in one month. Good month for analysts not to plan vacations."