Page 34 - Forbes - USA (February 2018)

Strategies ENERGY

here for an exclusive interview, thousands of miles Doing it better means doubling down on green
from Exxon’s executive God Pod outside Dallas. tech. Exxon has promised to spend $600 million
The point is to stress that he gets it—carbon diox- on a venture with Craig Venter (who was the first
ide really does threaten to disrupt the global cli- to crack the human genome) and his Synthet-
mate. “We understand the risk and that it needs to ic Genomics. The partnership started in 2009,
be addressed,” Woods says. “We’re sincere in that. and last summer they finally revealed a break-
We believe that.” through. “We figured out the genetic pathway by
But what does that really mean? After all, which algae make lipids,” Swarup says, referring to
Exxon is not about to leave oil in the ground, as the fat cells that would be the building blocks of a
the anti-carbonistas would prefer. In fact, by 2025 sustainable algae oil. “Now we’re going to do it at
the company intends to boost its U.S. oil produc- scale.” But Woods, who spent the past dec ade run-
tion by more than 600,000 barrels a day and to get ning Exxon’s refining and chemicals division, isn’t
another 200,000 bpd from giant new
discoveries off the coast of Guyana.
Exxon’s megatrend watchers figure we
will need every drop as the global mid-
dle class doubles in size and energy de-
mand grows by 25% by 2040. “Go to
places experiencing energy poverty. It
motivates you,” Woods says. “You can’t
just walk away and say, ‘Let’s turn off
the valve here.’ ”
But Exxon is also staring down a
perfect storm of regulatory, social and
shareholder pressure to clean up its
act. What’s needed, says Vijay Swarup,
the Exxon exec who runs the Jersey
research center, are innovations that
meet the four criteria of being “afford-
able, scalable, reliable and sustainable.”
It’s an attitudinal sea change for the
$260 billion (estimated 2017 sales) en-
ergy giant. Lee Raymond, Exxon’s CEO
before Rex Tillerson, famously called global warm- interested in showing off a single batch of algae- “We’re not going to
ing a hoax and the 1997 Kyoto pact “unworkable, derived jet fuel. What he wants is a 450,000-bar- PowerPoint our way out
of this problem,” says
unfair and ineffective.” In 2009 Tillerson softened rel-per-day Franken-algae refinery. And 20 years Vijay Swarup, lab chief.
the party line to support the imposition of a car- down the line—“aggressively patient” in Exxon- “We’re going to science
our way out.”
bon tax and has long pushed clean-burning natural speak—the company just might get there.
gas as the fuel of the future. But Rex didn’t really get In the nearer term, Exxon is working with pub-
the holistic nature of the problem, asking in 2013, licly traded FuelCell Energy to perfect a system
“What good is it to save the planet if humanity suf- that diverts the carbon dioxide and other emis-
fers?” Just a few months shy of what would have sions from power plants, mixes them with meth-
been his retirement date, Tillerson reached a deal to ane, and pipes them into a series of fuel cells that
“sever all ties” with the company and become Don- electrochemically transform the gases into elec-
ald Trump’s secretary of state. Two weeks after he tricity plus a concentrated stream of 90% car-
left came the announcement of Tillerson’s career- bon dioxide ready to be pressurized and inject-
capping deal: the $6 billion acquisition of 250,000 ed deep into the earth. What caught Ex xon’s eye:
acres in the red-hot Permian Basin of New Mexico Unlike other carbon-capture systems, this one is
and Texas from the billionaire Bass brothers of Fort not a power parasite. “It’s like saying unicorns are
Worth. Tillerson personally negotiated the deal real,” says Tim Barckholtz, a senior Exxon scien-
with his friend Sid R. Bass. Woods won’t say wheth- tist with a Ph.D. in chemistry. Like a giant battery,
er he’s had any contact with Tillerson since his Rex- the fuel cell is a 10-by-10-foot cube. Two of them
it (complete with a $180 million golden parachute) are being installed at a coal plant operated by Al-
but intends to build on his legacy. “It’s an unselfish abama Power. A 500-megawatt plant would need
culture,” Woods says. “The expectation is that the the capacity of around 175 cubes to capture nearly
next guy comes in and does it better.” all of its carbon dioxide (and other pollutants) and

32 | FORBES FEBRUARY 28, 2018