This is about Chris Wright, designated secretary of Energy, and Darren Woods, CEO of ExxonMobil. Each person has taken a stand in regard to the incoming Trump administration. Although their stands on energy and climate are not identical, their positions are important for 2025 and deserve attention.
Chris Wright
Chris Wright has been nominated by Donald Trump to be Secretary of Energy, and head of the Department of Energy, in his new administration. Chris has always been self-confident and proactive, two things that helped make him into an entrepreneur. He sold his company Pinnacle in 2002, a propitious time right before fracture mapping became a huge asset to make better wells in the Barnett shale. The Barnett was where the shale revolution started in the U.S. that has been so vital to the energy needs of the U.S. and the world.
How did Wright get from there to Energy Secretary designate? His next big step was to co-found Liberty Resources in 2010, an E&P company that drilled and fracked wells in the Bakken in North Dakota. The shale technique of a long horizontal well fracked many times along its length was profitable in the Bakken. The next year, 2011, Wright bought and co-founded Liberty Energy, an oil and gas service company that drives immense frac pumping units to a wellsite to frac a horizontal well. Liberty Energy was valued at $2.8 billion in February 2023. Once again, these were two propitious investments ahead of a massive surge in shale oil and gas production across the U.S. that made the U.S. self-sufficient in oil and gas in 2020, the first time since 1947.
Darren Woods
Darren Woods is the CEO of ExxonMobil, and has been since 2017 when Rex Tillerson was chosen to be Secretary of State by President Trump in his first administration. The company has had a checkered history in climate change. After proving that global warming was true in the 1980s, the company went quiet on the subject. This has led to many lawsuits since 2015 charging ExxonMobil for damages associated with climate change caused by the company’s vast contribution to greenhouse gases (GHG).
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In 2021, the company’s annual board meeting was disrupted by Chris James, a small hedge fund owner, with his proposal to select four people to the board, each of whom had environmental experience. The proposal, opposed by management, argued that the company should develop a climate strategy. It was so disruptive that ExxonMobil stopped the meeting for a couple of hours, unsure how to proceed. When the meeting resumed and votes were counted, three of the people nominated were voted in. The fourth was accepted to the board some time later.
This was a turning point for ExxonMobil. Since 2021, ExxonMobil have changed their approach to climate. They have committed to cleaning up their methane emissions, to producing hydrogen as a fuel for industries where batteries won’t work, such as aviation, shipping, and heavy industries like steel and cement and fertilizer. And they have plans for disposing of GHG deep underground that may lead to a new industry worth $100 billion amid the heavily industrialized region around Houston. After buying Pioneer for $60 billion earlier this year, ExxonMobil may claim to be an influence—leader in both climate and oil and gas production.
What Chris Wright Stands For
Wright discusses in his book, Bettering Human Lives, three global energy challenges of today: 1) energy poverty, 2) secure supply of reliable, affordable, and clean energy, and 3) climate change. “There is no reason that we can’t master all three challenges,” he said.
Wright continues: “Energy poverty is today’s most urgent challenge and this report explains why the longer, healthier, opportunity-rich lives in the modern world are simply not possible without oil and gas… Liberty’s mission is to bring modern energy to the one-third of humanity that still lacks access…”
Its well-recognized that burning wood or coal increases pollution at the surface and GHG higher in the atmosphere. Why is energy poverty ranked number 1? “The World Health Organization (WHO) estimates over three million premature deaths occur each year from indoor use of traditional biomass fuels, which generate copious particulate matter during combustion. WHO attributes several million additional deaths from outdoor air pollution predominantly from the same source: particulate matter, or PM2.5 — one of the world’s most deadly pollutants.” Total deaths from particulate matter is 5-10 million per year.
So, energy poverty is a legitimate concern, and one third of 8 billion humans is approaching 3 billion people. Wright is a founding board member of the Bettering Human Lives Foundation.
If there is a weak point in this worthy cause, it’s a 2023 study by CSIRO in Australia that found that generation and transmission of electricity by wind, solar, and batteries are now cheaper than new-build coal or gas power plants. And the trend is toward even cheaper for renewables. Costs of battery systems in China, according to Wood-Mackenzie, are expected to drop 50% by 2032.
Installing renewables instead of traditional oil or gas-fired power plants would still be consistent with Wright’s statement, “There is no reason that we can’t master all three challenges.” In fact, Wright has said it doesn’t matter where energy comes from “as long as it is secure, reliable, affordable and betters human lives.”
Wright’s book does address climate change. “The third global energy challenge, climate change, has become so politicized and emotionally charged that rational, calm, fact-based decision-making is too often displaced by well-intentioned but hasty and counterproductive measures.” There is reason for this skepticism, as, for example, his book reveals how some weather extremes such as hurricanes and wildfires have not worsened over the past 40-50 years while GHG from fossil fuels have risen multiple times. This critical data, including the “killer quad” of weather extremes that haven’t worsened when global temperature has risen by 1.0 C degrees, underscores a deficiency of climate modeling that has been analyzed in depth elsewhere.
What Darren Woods Stands For
Akshat Rathi interviewed Darren Woods last week in Baku where the UN climate conference COP29 is being held. The ExxonMobil CEO outlined his company’s position on climate change, with some surprises.
First, incoming president Trump shouldn’t take the U.S. out of the Paris agreement of late 2015, like he did in his first administration. Essentially, no one country can stop the world proceeding toward decarbonization. But this has to be done without oil and gas companies going broke, he said, because oil and gas profits are good for a country by uplifting the economy and raising communities to a higher standard of living.
Second, CEO Woods supports the U.S. Inflation Reduction Act (IRA) which, along with the Infrastructure Act, provide almost half a trillion dollars in contracts and tax credits for industry to collaborate with government in climate-related goals such as hydrogen fuel and CCS (carbon capture and storage). Woods claimed these programs have set goals that the oil and gas industry can work with. In other words, the IRA supports GHG reductions in the right way.
For example, ExxonMobil are decarbonizing natural gas in their Permian basin properties (by fixing methane leaks), then reforming the gas to make decarbonized blue hydrogen by burying the biproduct CO2, and they get tax credit rewards while doing this.
Woods emphasized that the energy transition is expensive. To incentivize oil and gas companies to work on this, they need to be able to make a profit, and this is what 45Q tax credits provide when using CCS or producing hydrogen. Said another way, there has to be a market that rewards decarbonization.
Altogether, two high-powered influence-leaders have oil and gas backgrounds with a lot in common, but their opinions may diverge significantly on efforts to continue the energy transition.
