Exxon’s vast fossil fuel reserves “face little risk” of being left in the ground, the company said. Less than 5 percent of its reserves would be affected under a 2-degree scenario, the company estimated. Under that scenario, Exxon sees the world’s oil consumption dropping only slowly in the next two decades or so, and sees demand for natural gas rising slightly.
In examining whether the rise of electric vehicles could threaten demand for future oil, Exxon said it expected there to be 160 million electric cars on the road worldwide by 2040, up from just a few million today. However, other analysts have suggested that electric cars could catch on more quickly as battery prices drop and as countries like China — one of the world’s biggest emerging markets for cars — push more aggressively for adoption of electric vehicles.
Also on Friday, Exxon reported lackluster quarterly earnings as disappointing refinery and chemical results weighed on its bottom line. Its stock fell 5 percent on Friday amid a broader sell-off in the market.
Some climate campaigners were unimpressed with Exxon’s climate analysis. “The range of risks that Exxon faces if climate action is taken is far deeper than what’s being presented here,” said Adam Scott, a senior adviser at Oil Change International, an energy research and advocacy group.
He and others pointed out that Exxon, for instance, has assumed the development of technologies such as carbon capture that would allow the use of fossil fuels to continue with lower emissions. Also, Exxon didn’t address what might happen if countries agreed to make considerably more aggressive cuts designed to hold global warming to 1.5 degrees Celsius above preindustrial levels, as urged by the Paris agreement.
Nor did the company detail the risks from the growing number of lawsuits being filed against fossil fuel companies in various states around the United States. In January, New York City sued Exxon, BP, Shell, and other oil companies, demanding billions of dollars in damages to help the city cope with the effects of global warming.
“ExxonMobil’s own analysis assumes the world will continue to burn through oil and gas to drive its profits, keeping us on a path toward global temperatures rising well above the 2 degree Celsius threshold,” said Kathy Mulvey, climate accountability manager at the Union of Concerned Scientists.