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Key sustainability issues and challenges

Suzanne McCarron Vice President of Public and Government Affairs

Our stakeholders are increasingly interested in how we are incorporating sustainability and addressing challenges in our everyday operations. Suzanne McCarron, ExxonMobil vice president of public and government affairs, answers some of these questions from stakeholders in the discussion below.

With low oil prices and concerns about stranded assets, does ExxonMobil have any plans to diversify its energy mix?

We believe prices over the long term will continue to be driven by market supply and demand, with the demand side largely being a function of global economic growth. On the supply side, prices may be significantly impacted by political events, the actions of OPEC and other large government resource owners, and other factors. To manage the risks associated with price, ExxonMobil evaluates annual plans and all investments across a wide range of price scenarios. Our assessment is that operations will exhibit strong performance over the long term. This is the outcome of disciplined investment, cost management, asset enhancement programs and application of advanced technologies.

Our analysis confirms our long-standing view that all energy sources are necessary to meet rising global energy demand and to support improving living standards worldwide. All of ExxonMobil’s current hydrocarbon reserves will be needed, along with substantial future industry investments, to address global energy needs. ExxonMobil’s Outlook for Energy and all credible forecasts, including that of the International Energy Agency, predict that carbon-based fuels will continue to meet about three-quarters of global energy needs through 2040.

We also have a team within the company — the ExxonMobil Emerging Technologies team — that studies every aspect of the energy business, from oil and natural gas to alternatives. It looks into areas outside our company’s current business focus. If a technology could have a material effect on the future of energy, the Emerging Technologies team works to understand and evaluate it. We work hard to keep our research aperture wide.

What are ExxonMobil’s views of the climate agreement reached at the COP 21 climate conference in Paris?

The recently concluded talks reflected the complexities of enacting thoughtful policies that address climate risks in a meaningful way while also ensuring accessible and affordable energy supplies for societies throughout the world.

As policymakers develop mechanisms to meet the goals set in Paris, ExxonMobil encourages them to focus on reducing the greatest amount of emissions at the lowest cost to society.

At the same time, we urge them to recognize important shared humanitarian needs, including providing reliable and affordable energy to improve living standards.

As a global issue, climate change requires global solutions. Both developed and developing countries must now work together in crafting policies aimed at mitigating greenhouse gas emissions, while recognizing differing national priorities.

What is ExxonMobil doing to address the risks of climate change?

We believe the risks of climate change are real and warrant thoughtful action. Climate change is a global issue that requires the collaboration of governments, companies, consumers and other stakeholders to create global solutions. ExxonMobil continues to support and contribute to efforts to reduce greenhouse gas emissions.

For more than three decades, we have continuously funded and participated in research to improve understanding of climate science, often in conjunction with government bodies and leading research universities. This has resulted in hundreds of publicly available documents on climate-related topics, including more than 50 peer-reviewed publications. We promote discussion on issues of direct relevance to the company and contribute to a wide range of academic and policy organizations that research and promote dialogue on significant domestic and foreign policy issues.

We value scientists and research, and we collaborate with the world’s smartest minds in partnership with more than 80 universities around the world. With more than 2,200 Ph.D. scientists and engineers and more than 5,000 employees at our research and technology divisions around the world, we work day in and day out to explore the new energy solutions of the future. We spend about US $1 billion annually on energy research, a total that includes commitments to biofuels, carbon capture and sequestration, bio-products, non-hydrocarbon energy supply, power generation, transportation, energy efficiency and climate science.

Since 2000, we have spent nearly US $7 billion on technology to reduce greenhouse gas emissions, including on energy efficiency, cogeneration, flare reduction, carbon capture and sequestration, and research on lower-emission energy solutions. This includes investments of more than US $3.8 billion since 2000 to address energy efficiency and flare mitigation at our Upstream facilities around the world. Additionally, since 2001, more than US $2 billion has been invested in our Upstream and Downstream cogeneration facilities to more efficiently produce electricity and reduce greenhouse gas emissions at our manufacturing sites.

We are proud of the progress we’ve made, and we recognize the importance of continuing our research and development to help further expand the understanding of climate science. Our efforts have enabled us to take meaningful action to mitigate the risks of climate change, and we will continue to build on this foundation as we work with governments and stakeholders to further address the issue.

Increasingly, a number of oil and gas companies are terminating their exploration activities in the Arctic. Does ExxonMobil still believe Arctic development is financially and environmentally viable?

The Arctic represents the world’s largest remaining region of undiscovered conventional oil and gas resources. While developing these resources presents a variety of challenges, ExxonMobil has a strong portfolio of assets and opportunities in a range of Arctic environments. The company has operated in the region for nearly a century. We began by gaining a scientific understanding of the environment. Design and operational plans in Arctic locales, similar to everywhere we operate, are founded on our commitment to operating in an environmentally responsible and sustainable way. For example, our extended-reach drilling technologies have allowed for field development from land by drilling horizontally under the sea. This approach reduces the number of offshore structures required to recover oil and gas resources by drilling multiple, long-reach wells from the same location, which helps to reduce both underwater noise and our environmental footprint. We also use special earthquake- and frost-resistant pipelines in some northern areas.

ExxonMobil developed the industry’s only dedicated, in-house Arctic research program more than 40 years ago. Continued Arctic technology development has allowed us to design, build and operate gravity-based platforms capable of withstanding 6-million-ton icebergs in the North Atlantic and operating year-round in ice-covered waters offshore Sakhalin Island in Russia.

Additionally, we piloted and enhanced technologies in 2015 to monitor local wildlife and improve our environmental performance on Alaska’s North Slope. State-of-the-art technologies, including satellite-based remote sensing technology, ground surveillance radar and unmanned aerial systems, help us to monitor local wildlife near our operations and reduce our environmental impact.

How does ExxonMobil manage the risks associated with operating in water-stressed areas?

We have a systematic process for assessing and managing the risk of our operations wherever we operate, and this includes, for example, how we manage water. This process includes a reassessment over the life of the project to identify changes in operations or environmental conditions. Our operations use alternative water sources, where appropriate, and seek opportunities to reduce, reuse and recycle water. We consider multiple factors in determining the right approach for a given process or site, including costs, varied operational efficiencies, increased energy use or the consequences of producing more concentrated waste streams. Together, these factors help us determine site-specific approaches, which vary from site to site due to local conditions and availability.

What impact has the company experienced since expanding its equal employment protections to include sexual orientation and gender identity in early 2015?

ExxonMobil’s global policies have always prohibited all forms of discrimination in any company workplace, anywhere in the world. In the United States, ExxonMobil’s equal employment opportunity and harassment in the workplace policies were updated last year to explicitly include sexual orientation and gender identity, which is consistent with ExxonMobil’s longstanding practice of listing enumerated protected classes as defined by federal law.

ExxonMobil supports a work environment that values diversity and inclusion, and has numerous inclusive programs and policies that help make ExxonMobil a great place to work. These include support for employee networks that foster a work environment committed to diversity and inclusion, such as People for Respect, Inclusion and Diversity of Employees (PRIDE), which supports lesbian, gay, bisexual and transgender employees.

Following the incident at the Torrance refinery, what measures has the company taken to address the potential for similar safety incidents at its other refineries?

We deeply regret the incident. Thankfully, no one was seriously hurt. ExxonMobil takes all incidents seriously and is committed to learning from them and taking steps to prevent a recurrence. In addition to cooperating with all agencies investigating the incident, we have conducted our own, separate internal investigation led by a team of subject matter experts from across the corporation. The team spent several months on site interviewing witnesses, reviewing documents, inspecting equipment and preparing a comprehensive report that identified the direct cause of the incident, and made recommendations to prevent a recurrence. We are implementing the recommended changes in operating procedures, monitoring equipment and training at ExxonMobil refineries, and will share what we’ve learned with the refining industry.

There have been a number of pipeline releases over the past several years; what is ExxonMobil doing to ensure the integrity of its pipelines?

Pipeline transport is recognized as the safest means for moving oil and petroleum products. The immense system in the United States is a critical part of the country’s energy infrastructure, moving vital products from locations where they’re produced to the markets where they’re consumed — to fuel cars, heat our homes and power our economy.

That said, we are committed to improving pipeline safety and carefully maintaining and monitoring our infrastructure. We have implemented enhanced surveying techniques and state-of-the-art inspection technologies and analyses of our pipelines. These surveys and inspection findings are helping us identify areas where we can strengthen our pipeline integrity.

What is ExxonMobil doing to improve community relations in areas where it is conducting hydraulic fracturing operations?

We believe an open dialogue is vital to our long-term success. Unconventional development is still relatively new in many areas where we operate, and we meet with local leaders and community members to find out what is important to the community and to listen to their questions and concerns. Naturally, people living near our operations are concerned that our work could disrupt their way of life. We strive to address their concerns, and we take actions to limit potential impacts, such as altering our traffic routes to avoid disrupting school bus traffic. We also provide site tours to community members so they can observe and ask questions about drilling, hydraulic fracturing and processing.

No two communities are the same, and we have undertaken several approaches across the United States to establish a two-way dialogue with our stakeholders. These approaches include weekly community notices, community advisory panels, land conservation projects and town hall meetings. Our goal is more than just getting our work done — we want to be a good neighbor and productive member of the community, both before we begin work and throughout the life cycle of our projects.

Do you find your approach to risk management to be effective in helping employees identify and address relevant safety, security, health and environmental risks and issues?

ExxonMobil remains steadfast in its commitment to excellence in safety, security, health and environmental performance and operations integrity. Many of our operations and products represent potential risks to people and to the environment. Recognizing and managing these risks is inherent in our business, and we believe the best way to meet our commitment is through a capable, committed workforce, and practices designed to enable safe, secure and environmentally responsible operations. We accomplish this through clearly defined policies and practices and with rigorously applied management systems designed to deliver results. The Operations Integrity Management System, or OIMS, is a cornerstone of our commitment to managing risks and achieving excellence in performance. More than just a set of guidelines, OIMS is part of ExxonMobil’s corporate culture and the way we run our business.