Exxon Mobil Corp.’s tenacity in developing climate change solutions has been recently exposed for its true intentions. According to Bloomberg, Exxon has decided to walk away from funding algae-into-biofuels projects after it spent decades supporting the research and development of this solution.
Exxon was reported to have cut financing Viridos Inc. – a biotech company based in La Jolla, California and founded in 2005 that produces renewable algae biofuels. Viridos and Exxon have been technical partners since Exxon began its algae push, back in 2009.
Viridos is one of the few algae companies remaining in the sector that are dealing with the most daunting problem related to these biofuels – making them compete economically with fossil fuels. Now that the funding of Exxon into the algae biofuels research has been halted, the sector faces even more difficulties in its mission to commercialize the climate change solution. Algae biofuels are known to attract a lot of attention in the tech field as they would potentially generate less than half the emissions of petroleum.
As a result, Viridos shut down its outdoor ponds in the California desert and downscaled to a smaller lab crew. According to Bloomberg’s article, Viridos had warned its employees in October that it was running out of money, and on December 27th, it laid off 75 of its 130 employees, or 60% of its staff without severance.
Apart from pulling back support for Viridos, Exxon halted funding for a multi-million-dollar algae project at the Colorado School of Mines at the end of last year, after funding the work for eight years. Another venture with the National Renewable Energy Laboratory is also set to end within weeks.
The reason for Exxon’s decision to pivot from algae biofuels is that it is prioritizing other low-carbon solutions.
“At this point we have other programs that are ready for deployment… We need to get on the deployment curve for carbon capture, for hydrogen, for biofuels. Algae still needs some more work,” said Vijay Swarup, Exxon’s senior director of technology who ran algae research.
The oil major plans to invest $17 billion over the next five years on initiatives that will lower emissions and will help towards its announced goal of eliminating emissions from its operations by 2050.
According to experts, however, Exxon is one of the most recalcitrant, uncooperative and profit-driven energy companies when it comes to climate change mitigation. It has been receiving criticism and lawsuits for decades now that its low carbon initiatives are actually greenwashing tactics while prolonging the life of fossil fuels and trying to avoid responsibility to eliminate emissions still stay at the very core of its business.
“They’ve been trying to create the impression that they’re part of the solution, when they’re certainly not,” said Robert Brulle, a visiting professor at Brown University who has studied the promotional activities of the fossil fuels industry.
The company has actually been using its algae efforts as a significant piece of evidence to support its statements that it’s serious about climate change.
However, its recent action of pulling away funding from algae biofuels development is evidence that the company is simply looking for ways to make more money via its low-carbon investments. It turns out the company is not interested to sacrifice even a small portion of its astounding profits to push the needle to commercialize alternative energy sources.
Ambition and persistence from oil majors are now needed more than ever to push the boundaries of the green revolution and turn it into a reality. Oil companies are the ones most suited to do that as they possess the capital, experience, expertise, built infrastructure, and other resources to speed up the energy transition.
Exxon giving up on algae as a climate change solution comes even more as a shock since the company posted a record-breaking $59 billion in profits. All three majors Exxon, Chevron and Shell announced record 2022 revenue and profits due to higher oil and gas prices. Instead of using their profits to speed up the energy transition, they are reported to not increase investments in reducing emissions.
Exxon is ultimately responsible for generating about 630 million tons of greenhouse gas emissions each year and it doesn’t seem prone to give up on fossil fuels ever. A constant push and scrutiny are necessary towards oil and gas majors to move forward with developing green energy solutions as they are clearly the ones responsible for deepening the climate change problem. They also prove they are willing to risk human lives threatened to undergo stronger earthquakes, floods, and droughts, as long as they keep making a profit.