A surprising business leader is urging President-elect Donald Trump not to withdraw from the Paris Climate Agreement for a second time. ExxonMobil CEO Darren Woods made the comments about the Paris agreement in interviews Tuesday, Nov. 12, at the United Nations Climate Change Conference in Azerbaijan.
“I don’t think the stops and starts are the right thing for businesses,” Woods told The Wall Street Journal. “It is extremely inefficient. It creates a lot of uncertainty.”
The U.S. adopted the Paris Climate Agreement in 2015 under President Barack Obama. When Trump took office the first time around, he pulled the U.S. from the landmark accord.
When President Joe Biden took office, the U.S. was back in. And now, the Trump campaign has said Trump would repeat the removal.
“We will drill, baby, drill,” Trump said at the Republican National Convention, repeating his oft-uttered energy cry.
“I’m not sure how ‘drill baby drill’ translates into policy,” Woods told CNBC before the election.
Since 2018, the U.S. has led the world every year in crude oil production, according to data from the U.S. Energy Information Administration. Under Trump, the U.S. set the global record for oil production in 2019. Under Biden, the U.S. broke it for a new record high in 2023.
“From our perspective, we don’t set our business plans based on the political agendas or who’s in the White House or what party’s in control,” Woods said in Azerbaijan. “We look at the fundamentals and making sure that the investments that we’re making are advantage versus the rest of industry. We’ll be resilient in the bottom of the cycle, and then we make these plans and commit to that. We don’t kind of turn those on and off depending on who’s in office.”
The oil industry is somewhat at odds with this “drill at all costs” mentality. For one, restricting oil supply keeps prices higher. Second, support for cutting carbon emissions comes with an obvious advantage: a taxpayer-funded advantage.
“We’re bringing the advantages that we have as a company and the skills and capabilities to lower the cost of doing these. But ultimately, there needs to be an incentive to reward those investments and generate a return,” Woods explained when it comes to investments in carbon capture and green energy solutions. “And if we find that those incentives dissipate or go away entirely, then that would definitely change our investment plans. But I think the point we’re trying to make is the world needs to have a long-term approach to reducing emissions, that you can do it in a very cost-effective way. You need consistency of approach and policy. And so we’re here talking about what some of those approaches could be to help solve those problems.”
Despite support for the Paris Climate Agreement, the Carbon Tracker Initiative says oil companies are way off track. ExxonMobil is in the bottom five with a G rating on a scale from A-H. BP tops the list with a D.
“Companies worldwide are publicly stating they are supportive of the goals of the Paris-Agreement, and claim to be part of the solution in accelerating the energy transition,” oil and gas analyst and report author Maeve O’Connor wrote. “Unfortunately, however, we see that none are currently aligned with the goals of the Paris Agreement…”
The Paris Agreement is a legally binding international treaty on climate change. Its overarching goal is to limit the global temperature rise “to well below 2 degrees Celsius” from the year 1900, and pursue 1.5 degrees Celsius, which is about 2.7 degrees Fahrenheit.
