Newly minted ExxonMobil Chairman and CEO Darren Woods had a lot to say about energy and climate change last week, and he probably sent many a coal investor running for the Alka Seltzer. That’s not only because he talked up natural gas at the expense of coal. Woods also made a nice case for algae biofuel — you know, that weird thing that nobody talks about any more.
So, how serious is ExxonMobil about algae biofuel?
Natural Gas, Coal And Climate Change
Before we get to that thing about algae, let’s take a quick look at Woods’s comments about coal and natural gas. He issued them in a blog post dated February 23 in the ExxonMobil in-house news service Energy Factor.
Woods sets the table…
At ExxonMobil, we’re encouraged that the pledges made at last year’s Paris Accord create an effective framework for all countries to address rising emissions; in fact, our company forecasts carbon reductions consistent with the results of the Paris accord commitments.
…then he makes the case for natural gas while simultaneously lowering the boom on coal:
The world already has powerful tools for meeting global energy demand while reducing emissions. One is natural gas. Today in America, nearly one-third of the electricity is produced using natural gas. Our role as the country’s largest producer of natural gas – which emits up to 60 percent less CO2 than coal for power generation – has helped bring CO2 emissions in the United States to the lowest level since the 1990s.
Everybody Knows That Natural Gas Is Killing Coal
Did you see what he just did there? Republican political leadership has spent years blaming the Obama Administration and renewable energy for killing off coal jobs, and President Trump made coal jobs a central them of his successful election campaign.
However, industry analysts concur that cheap natural gas has been the main competition for coal in the power generating sector.
Meanwhile, ExxonMobil has been doubling down on shale gas reserves in the U.S. even when others bailed from the field due to falling prices domestically. It looks like that bet is going to pay off big time.
Last year the company’s former CEO Rex Tillerson was busy pitching natural gas as a replacement for coal globally and a key driver of economic development. Now that he’s US Secretary of State in the Trump Administration, Tillerson is in a prime position to force coal out of the global marketplace in favor of natural gas.
At least part of that gas will be coming from the US. Previous US policy limited liquefied natural gas exports. That began to loosen a bit under the Obama Administration, and the Trump Administration could turn the trickle into a flood.
Gas exports via pipeline are already increasing. Here’s a quick take from our friends at Fuel Fix:
The United States is on track to become a net exporter of gas next year, driven largely by the growth of liquefied natural gas exports, according to the U.S. Energy Department.
…the U.S. will keep exporting more natural gas by pipeline to Mexico to feed power plants for electricity generation. U.S. natural gas exports to Mexico have doubled since 2009 and will continue growing through 2020. Several pipeline projects are currently under construction.
To be clear, when ExxonMobil talks about natural gas taking the place of coal, the company is ignoring a growing pile of evidence that natural gas is not a sustainable solution (to put it kindly) for addressing climate change.
However, that’s their story and they’re sticking to it.
Meanwhile, Back At The Algae Farm
So, back to that question about ExxonMobil and algae. In his blog post, Woods did send a signal that natural gas is not the only solution. He mentioned carbon capture as the kind of “breakthrough clean-energy technologies” that are needed to address climate change, then he took up the topic of algae biofuel:
We’re also researching advanced biofuels, including biofuels made from algae — a potentially game-changing energy source that would place less stress on food supplies, land and fresh water than traditional biofuels while reducing emissions.
The key word here is “potentially.”
ExxonMobil has been partnering with a company called Synthetic Genomics on algae biofuel research since 2009. The first iteration of the co-funding agreement included a commercialization component, but in 2013 the agreement was re-upped to focus on foundational research.
It looked like ExxonMobil is looking at algae biofuel as a climate change strategy, but is in no hurry to get the research out of the lab and into the marketplace.
Last month the two companies issued a press release extending their research agreement yet again, and indicating that the joint biofuel project is still in the foundational research stage:
Synthetic Genomics, Inc. and ExxonMobil (NYSE: XOM) announced today that they have extended their agreement to conduct joint research into advanced algae biofuels after making significant progress in understanding algae genetics, growth characteristics and increasing oil production.
In the release, Vijay Swarup, ExxonMobil’s vice president for research and development at its Research and Engineering division, emphasized that the project is nowhere near commercial development:
“Synthetic Genomics and ExxonMobil remain committed to advancing the scientific fundamentals of algal biofuels…We know this will be a long-term endeavor and are optimistic based on the results we have seen to date.”
Shorter ExxonMobil: don’t call us, we’ll call you.
Image (screenshot): via Synthetic Genomics.