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Lindsey HallL I'm Lindsey Hall.

Esther Whieldon: And I'm Esther Whieldon.

Lindsey Hall: Welcome to All Things Sustainable, a podcast from S&P Global. As your hosts, we'll dive into all the sustainability topics that are reshaping the business world.

Esther Whieldon: Join us every Friday for in-depth analysis and interviews with leaders from around the globe. Together, we'll break down big sustainability headlines and cut through the jargon.

On this podcast, we've heard the solutions to big sustainability challenges like climate change, and the energy transition will require action by stakeholders across the public and private sector. We need to bring all actors and all sectors to the table, and this ethos is reflected in our new podcast name as well, All Things Sustainable.

We've always endeavored to feature a diverse range of perspectives on this podcast, and that includes talking to the biggest companies in every sector about how they're approaching sustainability and the low carbon transition.

Lindsey Hall: We’ve covered these topics in interviews with some of the biggest companies in the world. Earlier this year, we've heard from the largest bank in the U.S., JPMorganChase. We talked to one of the world's largest technology companies, IBM, and in previous episodes, we've also talked to the world's largest asset manager and world's largest asset owner. But what is the messaging coming directly from the energy industry?

To answer that question, we went to the heart of the oil and gas economy in the U.S., Houston, Texas. We spent the week covering one of the world's largest energy conferences, that's the annual CERAWeek gathering hosted by S&P Global. And this event convenes stakeholders from across the energy world, including some of the biggest names in fossil fuels. And as you might expect, the messaging from many speakers there differed from what we tend to hear at climate or sustainability-focused events.

We heard many executives in Houston talking about a shift to climate pragmatism. Attendees from across the energy spectrum said they remain focused on sustainability and the low-carbon energy transition while also acknowledging that the path to get there might be slower than previously expected. And this slowing momentum is in part due to the Russia-Ukraine war, which led Europe to dramatically rethink its reliance on Russian energy. It's also a result of massive growth in artificial intelligence. More AI means more data centers, and that means huge increases in electricity demand.

Esther Whieldon: We've also heard many energy executives at the conference calling for an all-of-the-above approach that uses all available energy sources to meet growing global energy needs. And this comes across in today's episode where I sit down with one of the world's largest publicly traded oil and gas companies, ExxonMobil.

ExxonMobil is based in the U.S., operates in more than 60 countries and has a market cap of more than $490 billion. As we'll hear in today's episode, ExxonMobil has set decarbonization targets across its Scope 1 and Scope 2 emissions. That's emissions from its direct operations and purchased energy. It has not set a target for its Scope 3 emissions that occur up and down its supply chain, including when customers burn oil and gas for energy.

Scope 3 emissions make up the majority of carbon emissions from oil and gas companies. As we've heard from scientists on this podcast, greenhouse gas emissions are causing global warming.

The Intergovernmental Panel on Climate Change, or IPCC, wrote in its 2023 Synthesis Report that human caused climate change is already affecting many weather and climate extremes in every region across the globe, which has led to widespread adverse impacts and related losses and damages to nature and people.

And as we've covered in recent episodes, 2024 was the warmest year on record, yet emissions continue to climb. The World Meteorological Organization published its latest State of the Global Climate report on March 19, 2025.

It found that atmospheric concentrations of 3 main greenhouse gases, carbon dioxide, methane and nitrous oxide at record levels in 2023. That's the most recent year for which consolidated global annual figures are available.

Report also states that real-time data from specific locations showed that levels of these 3 main greenhouse gases continued to increase in 2024. We've also heard on this podcast how we need to ramp up investments in low-carbon solutions to address climate change and again, that we need all hands on deck to address this challenge. With all this in mind, I sat down with today's guest during CERAWeek to hear more about ExxonMobil's approach to the low carbon transition. Okay. Let's dive into the interview.

Matt Kolesar:  My name is Matt Kolesar. I'm Exxon's Chief Environmental Scientist. I've had that role for about 4.5 years. And in that role, I get to really coordinate with all of our experts in the sustainability space, whether it be climate or water or land use and really just get to leverage the strength of all those experts in that field and make sure we have a coordinated progressive sustainability approach as a company.

Esther Whieldon: So what is ExxonMobil's approach to sustainability then?

Matt Kolesar: Well, I'll start out with what's really probably top of mind for a lot of folks when they think about ExxonMobil as an energy company, and it really is focused around climate. It's not exclusively climate, but I think that's what most people come to think of, and really, it's twofold. It's the end equation, as we call it, is continue to meet the world's growing demand for affordable and reliable energy, but also, at the same time, meet society's expectations that we're providing those and alternatives in a lower carbon environment.

So we spend a lot of time not only on our base operations, but we have an entire new business unit of Low Carbon Solutions that's out developing projects on hydrogen and carbon capture and sequestration, lithium, biofuels.

And so again, that's all largely climate and carbon-related. But as you go develop those projects, it really starts to fold into our broader sustainability is how do I grow that and focus on climate, but also maintain our objectives of lowering our overall footprint on the environment.

And so that gets into things like am I using water responsibly, both for my existing operations yet for these new ones? Am I managing the land appropriately and making sure I develop in areas consistent with strong sustainable principles and by engaging with the community?

And really, it's the same underlying concept of being a responsible operator. And honestly, we challenge ourselves to be the most responsible operator in all aspects of our business, in all aspects of how you would define sustainability from climate, water use, being a good neighbor, and overall, minimizing our footprint to the environment.

Esther Whieldon: I want to come back to that technology side in a moment. What kind of decarbonization targets or energy transition targets has ExxonMobil set?

Matt Kolesar: We have ambitious objectives that we've talked about in the public domain. We've got commitments near term, and we've got longer-term commitments. The near term on carbon intensity on our overall portfolio, carbon intensity on our upstream.

We've got sort of subcategories on targets for reducing our methane by 60% to 70%, our flaring by 60% to 70% by 2030, so that gives us very clear near-term goals that fits nicely within a business cycle.

But they're all towards an end of ultimately setting up our business to decarbonize our Scope 1 and Scope 2 emissions, those that we create running our business. And we've set out an ambition to meet those objectives by 2050.

We'll likely need supportive policy around the world to be able to meet that on that time scale. But we've got a vision. We've got a whole suite of projects we've identified for every part of our business. on how we can enable that. And so it wasn't an empty promise. It was a plan we had, and we've got a whole team that manages that inventory of projects. And again, they're largely scoped towards where there's market forming policy, but we have line of sight, and we think we have technology options to really pursue that net zero by 2050 ambition.

Esther Whieldon: And what about Scope 3 emissions? Is that something you guys have set any targets on or considering in the future?

Matt Kolesar: We have not set any targets on Scope 3. And we're honestly trying to really focus on the direct emissions, and you'll hear us talk a lot about in the future about our product intensity standard on a new way to think about Scope 1, Scope 2 and Scope 3.

I think it's fair to say that society hasn't moved to a decarbonized state as quickly as any of us had liked. And we think there's a couple of things that need to happen. One, certainly, the technology, which we can talk about, needs to continue to evolve.

But ultimately, we need supportive consistent policy. And so our traditional accounting methods of Scope 1, 2 and 3, where we're counting each other's emissions, and there's double counting and the incentives to reduce are somewhat muted, we think, can be improved.

And so we're working with a lot of the global thought leaders on a way to set a carbon intensity of individual products, whether it be steel or cement or natural gas that gives you more fidelity on how do I drive that reduction and how do I do it, make it technology agnostic and just set these ever-decreasing standards, and we think that might be a more credible way for society to achieve their goals.

Esther Whieldon: Can you quickly define energy intensity, what that means?

Matt Kolesar: Well, I think that's a key point of it and make sure we're all talking the same language. So it's a very good question. At the end of the day, we're -- again, as we've talked for a long time, the life cycle of a product.

And so for natural gas, which is sort of in our wheelhouse, we can talk about from the moment it's produced until its end use. And you want to account all the emissions that are associated with both production of that, processing it, transportation.

And then to your question on the intensity is really you sum up those carbon emissions, both CO2 and methane and how you do the actual intensity can be as simple as carbon dioxide by volume of natural gas and just the carbon intensity of that delivered ton or joules of energy. And you can make a very similar case for steel or again, cement or consumer goods. And so again, we think while the world hasn't consistently thought about that across all products, we think that might be a way to unlock societal potential to really accelerate these reductions.

Esther Whieldon: And what do you think are the biggest opportunities and challenges to the energy transition?

Matt Kolesar: A couple of things and some that I think we're well positioned to address is ExxonMobil, the scale of the problem or the opportunities, the gigaton scale and how pervasive energy is and a fossil fuel energy, the technology to address that, while there are technologies available to us today, many of which we're pursuing like carbon capture and biofuels.

We think there is utility today where we can go apply that and start accelerating that. And you'll see some announcements here this year where we'll hopefully start up our first carbon capture project for a third party later this year. We've got a project under development just down the street here in Baytown, what could be the world's largest hydrogen plant that will let us decarbonize our chemical plant and refinery here just by switching from natural gas to hydrogen.

So that technology, there's plenty that's available today, particularly for these hard to decarbonize, but we need to continue to evolve that technology to make it more cost competitive. And then that really brings us to the third point -- well, back to the first maybe is scale. So one is a company like ours has that scale capability all the way from technology development to project design to technical resources, and we can do big projects.

And the world is going to need big projects and little projects, but a lot of big projects. So we have to get scale. We have to get the technology down the cost curve and those sort of play into each other.

The last piece I'll mention, I'd be remiss if I didn't, is we're just going to need better incentives as a society. And we think the best way there is policy -- government policy gets us back to a way to get there is this product intensity standard. There's other ways, and there is some progress around the world. We've seen successful environmental initiatives like taking sulfur out of diesel fuel or lead out of paint. Society knows how to do this. We just need to apply it at this really big giant scale of energy.

Esther Whieldon: Yes. What do you think are the low-hanging fruit in terms of areas that ExxonMobil can work the fastest and perhaps, the most cost-effectively on decarbonization?

Matt Kolesar: I don't know if I'd characterize it as low-hanging fruit necessarily. I'd just say it's an area where we have unique skills given our core competencies, and it's an area that we think we bring a lot to, again, with our scale, and we know subsurface. We know engineering. We do big projects.

And so we picked -- deliberately pick sectors that we can step right into. So carbon capture is right in our wheelhouse. Those are all parts of that process or things that we have done in different applications or related applications.

We've done carbon capture for 25 years and smaller scale. And so can we leverage those strengths on how do I process carbon dioxide? How do I move carbon dioxide and how do I store it and subsurface and how do I understand the geology.

So all core competence of ours that we'll leverage. You think of hydrogen, we've been managing hydrogen molecules and managing molecules for the life of our company. That's what we do. And so to develop a hydrogen economy is a natural step for us and us developing a blue hydrogen project here in Baytown hopefully lets us leverage sort of that scale.

And just one other piece on the technology is one of the opportunities for hydrogen is we sort of know how to make it. We'll continue to work to make it less expensive. It's -- we got to develop a market to use it. And again, the advantage of our applications in the near term is the industrial sector, particularly where we're looking at these projects like Houston or Rotterdam. It's a plug-and-play fuel if I can develop the right burners.

And so one of the things we're really proud of is we work with some burner manufacturers and developers in some high heat applications. steam crackers, polyethylene furnaces that are a very unique natural gas-fired application.

We've developed with our partners 100% hydrogen burner, which didn't exist previously and had to be unlocked for this to continue to progress. And so that allows us to enable these very large industrial complexes that don't have a lot of other options. The world still needs those products to decarbonize. And so I think that's an area where, again, we can leverage our scale and our skill set.

Esther Whieldon: You mentioned blue hydrogen. Can you define -- is that gas-based? Is that renewables-based? What is all the colors of hydrogen?

Matt Kolesar: Yes. And we don't like the color designation. I think it oversimplifies it a bit. I mean, ultimately, the world wants low-carbon energy sources. And we'll use hydrogen can be a fuel source. It can be a fertilizer feedstock or feedstock for other applications.

For us, we're developing a process that will generate hydrogen based on natural gas as a feedstock. And again, just leveraging sort of our scale and our breadth of value chain, where we think this Baytown, Texas project can be such a success is we have already committed to decarbonize our entire Permian Basin operations for Scope 1 and 2, the emissions that we would otherwise emit as we develop those resources.

And so we're well on our way. We've committed to be done by 2030. And so we'll have a supply of very low carbon natural gas that will feed a low-carbon hydrogen production unit. And so we think the end product of that will be a very competitive low-carbon hydrogen stream. So the color, I think, isn't really meaningful in that context. And it really gets back to our discussion a few moments ago is if you're really focused on carbon intensity for that product, then how you get there and what your feedstocks are become less important.

Esther Whieldon: We just heard Matt talking about the company's operations in the Permian Basin. That's a large area across Southwest Texas and Southeast New Mexico that is rich in oil and gas reserves. At CERAWeek, we heard a lot about the massive growth in artificial intelligence.

As Lindsey mentioned, more AI means more data centers, and that means big increases in electricity demand. And we heard how natural gas is expected to be a major source of power for the data center boom. While this is traditionally a job for electric utilities, Matt said that ExxonMobil is looking to supply some of that gas-fired power to data centers directly. Here he is again.

Matt Kolesar: We've recently announced that we're evaluating projects to develop power generation for data centers, again, sort of leveraging all the things we're good at and working on -- and again, ideally, it would be in the Gulf Coast area, where we already will have very low carbon natural gas that we're producing in our Permian Basin, and we could feed a natural gas-fired power generation, which is predeveloped technology. We can do it at scale.

We're very good project managers. And then ultimately, while you are burning fossil fuels, you can put a carbon capture system on that and then provide in a very short time frame relative to other alternative energy sources, high levels of power for data centers. And so our vision is we develop that off the grid, so we can go quickly, ultimately, a very low carbon power source and it's reliable and stable, which is what fossil fuel power enables.

Esther Whieldon: Given that ExxonMobil is exploring building gas-fired power plants to supply electricity to data centers directly, I asked Matt whether the company is planning on investing in renewables as well.

Matt Kolesar: I'll start off by saying I think we're supportive of all energy sources. We think it's an all of the above. I think our global outlook says that the world will need 15% more energy by 2050. And there's probably some early signals here recently that, that may even be higher than that. So the world is going to need all energy sources. And I think we haven't invested in renewables in solar or wind ourselves. Again, going back to, it's really not one of our core competencies.

And I think our leadership felt that, that wasn't an additive thing for our shareholders that others could do it as well or better. And the world needed us to do things we're good at, too. And so where we have leveraged renewables as we decarbonize our Permian Basin operations, a lot of the carbon dioxide would historically fall in a Scope 2, so power that we require to run our operations is coming historically from natural gas-fired or even coal-fired electricity generation. So we've made it a concerted effort to switch that to renewable sources.

So we have a chemical plant in Corpus Christi or near Corpus Christi that just signed an agreement with a solar provider. And I think that just went live a few weeks ago. We work with them. We're a very large renewable purchaser for our base operations to offset our footprint. It's just not anything we've invested in directly.

Esther Whieldon: Earlier, Matt mentioned that one of the low-carbon solutions ExxonMobil is developing is the production of lithium. I asked him to talk more about that and how it fits into the company's plan to help drive the low carbon transition.

Matt Kolesar: Yes. And again, it goes back to where our core competencies are and you think of what we're trying to develop in Arkansas, and we've got a pilot plant under development is to extract brackish brine water that has lithium and some other minerals in it, a high enough concentration that we think we can commercially bring that water to the surface, use some -- what we think are some brand-new emerging technologies that can allow you to do that at cost, extract the lithium, and put the water right back.

So that has tremendous advantages on -- it's a significantly smaller footprint versus traditional strip mining or land mining that's done for the bulk of the global lithium production. It uses dramatically less water and it's a domestic resource for the U.S. And so there's a lot of positive things to that. And again, we're just trying to see if we can get that to scale and compete on the global market.

Esther Whieldon: And what sort of prompted ExxonMobil to want to go that direction?

Matt Kolesar: Again, it goes back to our mantra of -- what am I good at? And what is the world asking for? We see electric vehicles certainly being a path of decarbonization, a sector that is very likely to happen, should happen, is ultimately, a very low cost to society way to decarbonize for light-duty vehicles. And the demand for lithium is only going to increase, and we thought we had a really sustainably responsible way to be able to compete on the global market.

Esther Whieldon: Lastly, in our conversation, I asked Matt to share his takeaways from the CERAWeek conference. Here's what he said.

Matt Kolesar: I always come here and I'm hopeful, and I know there's a lot of uncertainty in the global world and the energy world. But I think when you -- what you're hearing here is, again, a very science-based, factual-based long-term outlook from really the whole range of speakers from CEOs to when you walk around here at Agora and hear all the technology nerds like myself, it's all very progressive and hopeful and consistent. And so you can't help but walk out of here with a bounce in your step, like we're doing the right things here.

Esther Whieldon: Are you feeling like sustainability is still a priority for the panels and the guests and the people that you talk with Interact here? Is it changing in any way?

Matt Kolesar: I have seen absolutely no change. Honestly, I see more because we continue to advance the science, we have the academics and the technology organizations. We're hearing progressive policy being developed. We see our customers continue to demand that as they should. And so I haven't seen any -- a matter of fact, it's probably more than you would have expected coming her, given the sort of the outside noise. But there's no emotion in here. It's all let's get down to business and solve tough problems.

Esther Whieldon: Great. Thank you so much for taking the time to talk with me.

Matt Kolesar: Very good. Thanks for having me.

Esther Whieldon: So today, we heard from Matt how ExxonMobil is looking to leverage its background in oil and gas to scale up low-carbon technologies such as hydrogen, carbon capture and sequestration, biofuels, lithium and even providing gas-fired electricity to data centers.

Lindsey Hall: And what he said at the end there about this message he heard coming from CERAWeek that companies are looking to get down to business and solve tough problems. That's something we heard come across from other people we talked to at the conference as well.

Esther Whieldon: Please stay tuned for more of those conversations from CERAWeek in upcoming episodes. We'll be hearing more perspectives from companies across energy, electric utilities, chemicals, and mining sectors to understand how they're approaching sustainability issues.

Lindsey Hall: Thanks for tuning in, to this episode of All Things Sustainable. If you like what you heard, please subscribe, share and leave us a review wherever you get your podcasts.

Esther Whieldon: And a special thanks to our agency partner, the 199. See you next time! 

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