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The oil giant sees a greener future for itself without wind and solar.͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
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July 21, 2023

Net Zero

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Tim McDonnell
Tim McDonnell

Hi everyone, welcome back to Net Zero.

Even among oil and gas majors, a group not known as climate crusaders, ExxonMobil stands out for the minimal amount of investment it has put into low-carbon ventures. But last week it made one of its biggest green(ish) moves to date, one that is revealing about the confidence Exxon has in the ability of carbon capture and storage to move from a niche side hustle to a core business offering — and puts it in pole position to grab one of the juiciest climate tax credits in the United States.

Also today: Companies buying carbon offsets don’t want to stop calling them “offsets,” and Prashant gets impressed by a fake steak.

If you like what you’re reading, spread the word.

  1. The hottest month ever
  2. US emissions aren’t on track
  3. 🟡 Exxon’s green gamble
  4. 🟡 Suing over extreme heat
  5. 🟡 Carbon’s ‘offsets’ divide
  6. Climate-fighting AI
  7. Sugar turns buyers sour on EVs
  8. 🟡 Side effects of extreme heat
  9. Climate change closes ports
  10. 🟡 Fake meat, high steaks

The hottest month ever


July is likely to be the hottest month globally in thousands of years, NASA scientists said. And because El Niño is only just beginning and won’t peak for several months, next year could break even more heat records, they warned. As heat waves continue to bake much of the northern hemisphere, few scientists are surprised, top NASA geoscientist Gavin Schmidt told reporters: “There has been a decade-on-decade increase in temperatures throughout the last four decades.”


US to miss emissions target

U.S. emissions aren’t falling fast enough, a new analysis from the think tank Rhodium Group finds. The analysis includes an updated projection of the impact of the Inflation Reduction Act, as well as new data on various state-level climate policies, for the most current outlook on the U.S. climate trajectory. At this rate, the country will miss its 2030 emissions target by at least five years. Permitting bottlenecks and workforce shortfalls are the two biggest factors behind the delay, the report concludes.


Exxon bets carbon will be the new oil

Denbury/Handout via REUTERS

by Tim McDonnell


ExxonMobil staked out its vision for its transition to a lower-carbon business model when it spent $4.9 billion to acquire Denbury, a smaller Texas oil and gas company with the U.S.’s largest network of pipelines designed to carry carbon dioxide. The acquisition signals the momentum growing behind “carbon management” as an enterprise that fits better with the traditional strengths of oil and gas companies than renewable energy.


The Denbury acquisition last week is a show of confidence by Exxon that carbon capture and storage (CCS) will really take off across the electricity and manufacturing sectors in a way that up to now has proven cost-prohibitive, and provides a green light for other companies that want to capture and store CO2 to dive in.

Exxon’s vision is that eventually these pipelines will ferry CO2 captured from industrial point sources like cement and steel plants, and potentially from natural gas power plants, and transport it to underground rock formations or old oil wells where it could be buried (Denbury also owns a number of large sites for carbon sequestration).

Companies that want to use CCS to lower their carbon footprint could turn to Exxon as a one-stop carbon disposal shop. Exxon is already building up a portfolio of this kind of business, signing several carbon management deals in the last year with chemical and steel companies. The Denbury acquisition will allow the company to “accelerate the growth of this business and do that on a very profitable basis,” Dan Ammann, president of Exxon’s low carbon solutions division, told Bloomberg.

Carbon management is becoming increasingly popular with oil companies, since it plays to their know-how in trading, transporting, and storing molecules (as opposed to electrons from renewable energy, which are an entirely different business). The Denbury acquisition, which is the largest single carbon management investment by any company to date, allows Exxon to jump ahead of competitors like Oxy and Wintershall Dea in seizing control of the relatively limited supply of existing carbon-moving infrastructure. That’s critical since the construction of new CO2 pipelines is no easier to get approved than an oil pipeline. It also allows Exxon to tap one of the most lucrative tax credits in the Inflation Reduction Act: $85 per ton of CO2 that is permanently stored underground.

So far, Exxon’s overall low-carbon spending has ranked among the lowest of U.S. and European oil majors, accounting for just 0.5% of its total capex since 2015, according to Bloomberg. For a company that turned a $56 billion profit last year, $5 billion is still a drop in the bucket. But it’s a clear sign of where the industry is headed.

“Exxon, by virtue of its size, is a bellwether,” said Neil Quach, an oil and gas analyst at the think tank Carbon Tracker. “I do think other companies should and will follow suit.”

— To read Room for Disagreement and the View From London, click here.


One Good Text

Jeffrey B. Simon, attorney representing Multnomah County, Oregon, in a recent lawsuit officials there filed to hold oil and gas companies liable for a heat wave last year that killed 69 people in the county. Simon is the author of the forthcoming book Last Rights, about corporate influence on the justice system.


Carbon market divided on ‘offsets’

REUTERS/Timm Reichert

Carbon market industry groups are divided over the kinds of marketing claims companies should be allowed to make when they purchase carbon credits. Last month, the nonprofit Voluntary Carbon Markets Integrity Initiative, whose funders include Google and the Rockefeller Foundation, issued guidance for carbon-credit buyers that said they should avoid the use of the term “offsets” or otherwise imply that credits they buy cancel out their own emissions, a practice that is common today. Instead, they recommend companies say only that they are “contributing” to the larger emissions targets of whatever country the project is based in.

But in an interview this week with Semafor, Dirk Forrister, the president of the International Emissions Trading Alliance, said the VCMI guidance is overly strict and will discourage corporate investment in forest conservation and other projects that generate carbon credits. “Companies want this to be a market, and not a philanthropic endeavor,” he said. “Otherwise, the pockets aren’t as deep.”

Dirk said carbon project developers and brokers are working hard on satellite monitoring and other tech-based approaches to weeding out bogus or overstated carbon credits, which numerous nonprofit and media investigations have found to be widespread. And until more governments are willing to impose a tax on carbon pollution, “the voluntary carbon market is the next best thing.”


Climate-fighting AI

Scientists in Rwanda are developing an AI-assisted weather forecasting program for the continent. Weather forecasts in many African countries are notoriously unreliable because of the relative deficit of monitoring stations, so the hope is that an algorithm can fill some of those gaps.


Sugar turns car buyers sour on EVs

A unique blend of gasoline and sugarcane-based biofuels that historically put Brazil ahead of many countries on vehicle emissions is now holding back the country’s transition to electric vehicles. Locally-made “flexible fuel” vehicles are cheap and popular, and as a result Brazil “will be the last among its peers to shift to electrics,” Bloomberg reported. The government of President Luiz Inacio Lula da Silva, which is pushing harder against deforestation and other climate problems than his predecessors, so far has not set an ambitious target for EV adoption, under pressure from the country’s powerful sugar lobby.




Longer, hotter heatwaves across much of Europe and the U.S. are prompting significant shifts in tourism, redefining the summer camp experience for American children, and causing psychological distress to countless others.

We’ve collected insights and reporting on the impact of the record breaking summer temperatures.


  • Soaring temperatures across southern Europe could lead to long-lasting travel pattern changes. Tourists seeking cooler temperatures may choose other destinations, or elect to travel in cooler months as large parts of Europe experience droughts and wildfires during the scorching summer. The number of people hoping to travel to the Mediterranean region during the summer has already fallen by 10% compared to 2022, European Travel Commission data showed. The impact could profoundly reshape the economies of the continent: France, Spain, and Italy rank first, second and fifth, respectively, in international tourist arrivals. — Reuters
  • Higher temperatures impact the body not just physically, but psychologically. A 2018 study published in Nature found that higher temperatures increased suicide rates by about 0.7% and 2% in the U.S. and Mexico respectively. Another study showed a rise in the use of depressive language on Twitter during the hottest months. Higher temperatures may trigger physiological responses that release stress hormones, while they can also lead to sleep-deprivation, potentially worsening psychological conditions. — Heatmap
  • Exceptionally warm heatwaves can also destabilize agricultural patterns, pushing food prices higher in a phenomenon known as “heatflation.” Coldiretti, Italy’s biggest agriculture association, warned last year that 30 to 40% of its seasonal summer harvest was threatened by a heatwave that pushed temperatures above 105 degrees Fahrenheit on numerous occasions. The heatwave also disrupted a crucial pollination window for maize crops, while milk production declined for weeks as livestock was shielded from overheating. — France24

To read in full and share, click here.

— Jeronimo


Climate change closes ports

Value of global trade that is at risk annually because of climate-related closures of shipping ports, according to a study this week in Nature by University of Oxford economists. The figure exceeds $120 billion when counting the ripple effects from port closures across the economy at large. Ports in the western U.S., Central America, and West Africa are at the highest risk of weather-related downtime, partly because they rely heavily on trade with ports in east Asia, like Shanghai, that are also at very high risk.


Food for Thought

Courtesy Redefine Meat


Perhaps the best daily encapsulation of the challenge of decarbonizing the global economy is on our dinner table: A meat-based diet is about twice as carbon-intensive as a plant-based one, but as societies get richer, they consume more meat. With that in mind, a host of companies are trying to offer meat alternatives — soy-based, pea-based, or lab-grown — to persuade meat eaters to switch away. I tried one in central London, a 3D-printed filet mignon.


The steak was on the menu at Unity Diner, near Semafor’s east London office, and was developed by Redefine Meat, started by an Israeli who told The Guardian he sought to “disregard the opinion of the vegan” in building his product. Redefine Meat says its protein products are built with a variety of legumes and grains, and its higher-end meat alternatives are mostly available in higher-end restaurants in Europe and Israel. It uses 3D printing, it says, to both consistently replicate the muscle-and-fat combinations found in cuts of meat, and to flexibly change the shapes or sizes of “cuts” of meat.


Prashant Rao for Semafor

It was pretty good! I’m no connoisseur, but the steak was fibrous, cutting through it felt true, and it had that hard-to-define mouth feel. Professional food reviewers have been even kinder. I am no vegetarian — lunch yesterday was a cheeseburger — but I eat a lot less meat than I used to, and I’m glad the options are proliferating.

— Prashant

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