According to a report by Politico on Monday, ExxonMobil (NYSE:XOM) wants to build a massive carbon capture and storage (CCS) project to sop up some of the industry's emissions.
The $100 billion investment would capture the carbon emissions of refineries and petrochemical plants along the Houston Ship Channel, a key oil industry hub, and permanently store them underground. The initial phase, which Exxon could complete by 2030, would capture 50 million tons of carbon dioxide per year, the company says, roughly the equivalent of removing 11 million cars from the road.
Exxon is seeking the assistance of the Biden administration to get this project off the ground through tax breaks or the creation of a market for Exxon's new CCS business. CEO Darren Woods told Politico that this "massive project offers the only realistic way for the U.S. to get anywhere near the kinds of quick, aggressive cuts to the nation's greenhouse gas output" that the Biden administration wants to see.
ExxonMobil and other oil producers see CCS as the key to their future. It could enable the industry to deliver on its ambition of producing net-zero oil, where investments to reduce and capture carbon emissions would completely offset the emissions caused by the production and combustion of a barrel of oil.
However, the industry faces opposition to its plan as many environmentalists want renewable energy or emissions-free alternatives like green hydrogen to completely replace fossil fuels. On top of that, governments would need to create the right financial incentives to make CCS projects economical, such as a cap-and-trade system or economywide carbon tax.
With the Biden administration currently seeking to set a clean energy standard instead, it's unclear if Exxon's proposed project will become a reality.