(Bloomberg) -- Exxon Mobil Corp. dismissed long-term pledges by some of its Big Oil rivals to reduce carbon dioxide emissions as nothing more than a “beauty competition” that would do little to halt climate change.
Energy companies need to focus on global, systemic efforts to reduce greenhouse gases, rather than just replacing their own emissions-heavy assets with cleaner ones to make themselves look good, Chief Executive Officer Darren Woods said in New York Thursday.
“Individual companies setting targets and then selling assets to another company so that their portfolio has a different carbon intensity has not solved the problem for the world,” Woods said at Exxon’s analyst day. Exxon is focused on “taking steps to solve the problem for society as a whole and not try and get into a beauty competition,” he said.
Woods’ remarks, which echo those made by Chevron Corp. CEO Mike Wirth earlier this week, underscore the divide between U.S. and European oil majors in their approach to addressing climate change. Royal Dutch Shell Plc, Repsol SA and Eni SpA have pledged to make large reductions in carbon emissions over the long term, assurances that have garnered praise from environmentalists and investors. BP Plc went a step further with a goal to eliminate almost all of the carbon emissions from its operations and the fuel it sells to customers.
But it remains to be seen whether oil giants can generate big profits by producing carbon-free energy. Oil and natural gas producers, buffeted by volatile energy prices, are under intense pressure to rein in spending and return cash to shareholders. Solar, wind and battery storage projects haven’t shown they can fund generous payouts to investors, and Exxon has already failed to cover its dividend payments with cash flow for eight out of the last 10 quarters.
Oil and gas production growth is still needed to meeting rising global demand, Exxon said. But the company said it’s taking steps to reduce emissions from its own operations, including gas flaring, and is working to develop lower-emissions products such as biofuels derived from algae.
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