An “Exxon Model”? How Oil and Gas Companies Can Stick with Molecules but Also Contribute to Decarbonization.

Oil and gas companies are generally considered impediments to the energy transition. ExxonMobil is emblematic of the oil industry’s most confident (to its critics, most egregious) approach: the company is notably confident in the resilience of oil and gas demand and its determined focus on the core business of oil and gas production. Rather than diversifying into renewables and associated clean technologies, ExxonMobil aims to stay with molecules rather than shifting to electrons. The company will instead attempt to innovate by investing in opportunities to decarbonise production by leveraging its expertise and resources in such pursuits rather than venture into new businesses where it lacks the requisite skill sets and see no comparative advantage. This paper examines the notion of an “Exxon model” as a distinct approach to how oil and gas companies shape the energy transition. Given that these companies will remain pivotal in the complex and protracted transition away from fossil fuels, the success or failure of companies like ExxonMobil in continuing to supply global energy demand while lowering emissions by means of decarbonisation is significant for the industry’s future as well as for policymakers needing a wide range of tools to deliver a Net Zero global economy.