Critics shrug at latest ExxonMobil climate pitch

NEW YORK: ExxonMobil outlined a plan for a "lower-carbon" future based on significant carbon capture and storage (CCS), but also continued fossil fuel use, in a plan that drew faint praise from activist investors Wednesday.

The US oil giant, long criticized by environmentalists for dragging its feet on climate change and renewable energy, emphasized the potential for CCS in reducing emissions.

ExxonMobil said it is working towards a long-term transition to low-carbon energy, while continuing to develop oil and gas in the short- and middle-run.

"We are committed to playing a leading role in greenhouse gas reductions," Chief Executive Darren Woods told analysts.

But he said, "We must also work to meet the continual demand for energy, which is essential to modern life."

Activists praised ExxonMobil's shift in tone during the presentation, which showed the company no longer seeks long-term oil and gas production growth and said it would use any extra cash to reduce debt rather than boost drilling.

But critics noted the plan falls short of European rivals such as Royal Dutch Shell and Total, which have set targets to reach net-zero carbon emissions and invested in renewable energy.

ExxonMobil's plan "risks continued long-term value destruction," said Engine No.1, an activist investor group that focuses on climate change and has nominated four directors to the company's board.

At the heart of the company's emerging climate strategy is CCS, which captures emissions from industrial sources including refineries and chemical plants and injects them deep into geologic formations for permanent storage.

ExxonMobil has planned $3 billion in new CCS investments over the next five years.

But its plans also include a 2021 capital budget of between $16 and $19 billion, with heavy oil and gas upsteam investments in the US Permian Basin as well as in Guyana and Brazil.