There’s a saying that facts tell and stories sell, and Kurt Aerts, business venture executive at ExxonMobil, does both well.
Speaking at an executive event at the SAP for Energy and Utilities Conference in Sevilla, Spain, Aerts delivered an in-depth analysis of why oil and natural gas remain critical sources for energy and require sustained investments to help meet the energy needs of the future.
Unsurprisingly, it begins with demographics.
“More than three billion people still live below modern standards for life expectancy, education, and income,” Aerts explained. “The economy and population are the demand drivers for energy, and lack of energy has long been associated with poverty.”
All energy types needed
Along with a number of other experts, ExxonMobil believes the world will see a 25% decline in emissions by 2050, but much more is needed to keep warming under 2°C. Aerts listed the key takeaways related to ExxonMobil’s outlook for 2050, based on the premise that more people gaining more prosperity will need more energy with less emissions:
- Two billion more people will populate the planet.
- 15% more energy is needed to support the needs of the population, most living in developing nations.
- There will be five-times greater use of wind and solar, but 54% of energy needs will still be met by oil and natural gas.
ExxonMobil considers a range of scenarios to help inform the company’s strategic thinking, including those supplied by organizations such as The Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change.
According to the IPCC, while renewable sources of energy such as wind, solar, or biomass are accelerating rapidly, oil and gas will still provide over 50% of the global energy mix by 2050. To make a serious dent in emissions, additional solutions such as hydrogen, nuclear power, and carbon capture and storage are required.
“At ExxonMobil, we decided to leverage our existing strengths and core capabilities to determine our focus areas while monitoring technology gaps to explore potential business options,” said Aerts. “This means we’ll maintain a continued focus on our core business including oil and natural gas, chemicals, and carbon capture while we explore and develop opportunities in new sectors such as hydrogen, biofuels, and lithium.”
Big industry solutions
For example, ExxonMobil has always been a leader in chemicals. The petrochemical industry uses petroleum as a feedstock, or raw material, to make products such as plastics, polyurethane, solvents, and hundreds of other intermediate and end-user goods. As demand for packaging, auto parts, housing materials, electronics, and other products made from petrochemicals continues to grow, ExxonMobil is investing in the production of advanced plastics and products that help manufacturers reduce energy use, emissions, and waste.
One key development in this area is ExxonMobil’s focus on advanced recycling of plastics, which is necessary to complement the standard mechanical recycling process. Advanced recycling turns plastic waste that would otherwise be incinerated or sent to a landfill into virgin-quality raw materials that can be used to make new products. The company has recently opened a large-scale advanced recycling facility – one of the largest in North America – capable of processing more than 80 million pounds of plastic per year, helping drive greater circularity in the industry.
At the same time, the company is accelerating its research, development, and growth in areas that have previously not been part of its core business. Lithium, for example, is a key component in electric vehicle batteries. To meet projected growth in electric vehicles, the world will need a lot more of it.
“We plan to become a major supplier of lithium, using a modern process that has significantly less environmental impact than traditional mining,” said Aerts, citing a project to extract lithium from saltwater brine.
The company is well positioned to lead in this area, even boasting its own Nobel Prize winner. In the 1970s, one of its employees, Dr. Stanley Wittingham, helped develop a radical new technology: the rechargeable lithium-ion battery. He was awarded the prestigious prize in 2019 in Chemistry, along with two others. This high energy density lithium-ion technology now powers laptops, cellphones, most electric cars, and even solar-powered aircraft like the Solar Impulse 2.
A win-win approach
In conclusion, Aerts reiterated ExxonMobil’s commitment to meet the energy needs of the future while reducing carbon emissions. “It’s not an either-or situation,” he said. “It’s a promise to deliver energy and lower-emissions solutions.”
The company intends to achieve this ambition through three key enablers: policy, technology, and market-driven solutions, including:
- Ongoing support for clear and consistent policies to incentivize lower-emission solutions and streamline permissions for building out required infrastructure
- Continuous investments to advance technology innovation and more research and development by governments, universities, and private enterprises
- Development of a market-driven economy that values and pays for emissions on a full lifecycle basis
“All these efforts are needed to advance the pace of the energy transition. Putting a price on carbon will help drive change in consumer behavior and spur new carbon markets,” said Aerts.
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