This column is from Trendlines, my business newsletter that covers the forces shaping the economy in Boston and beyond. If you’d like to receive it via e-mail on Mondays and Fridays, sign up here.
We’re gonna drill baby, drill.
The message was loud and clear when energy giant ExxonMobil said on Wednesday that it would buy Texas shale fracker Pioneer Natural Resources for $59.5 billion.
There was also an unspoken message: Hey, America, we’re working hard so you can keep flying on your private jet. Or eating meat. Or booking an ocean cruise.
The news
The deal would more than double Exxon’s production in the vast Permian Basin shale fields of Texas and New Mexico even as it and other oil and gas companies face pressure to shift to alternative energy sources.
Advertisement
Pioneer would be Exxon’s largest acquisition since it bought Mobil in 1999, and its size leaves no doubt about the company’s climate priorities. Its agreement in July to buy carbon-capture company Denbury Resources for $4.9 billion is a drop in the oil barrel by comparison.
Why it matters
Exxon chief executive Darren Woods is flipping a defiant middle finger to global efforts to phase out the use of earth-warming fossil fuels by 2050.
“Exxon is effectively betting that US energy policy will not move against fossil fuels in a major way even as the Biden administration encourages automakers to switch to electric vehicles and utilities to make the transition to renewable energy,” New York Times energy correspondent Clifford Krauss wrote.
More broadly, the deal underscores Big Oil’s determination to pump as much oil and natural gas out of the earth as it can — not just to ensure a smooth transition to renewable energy but to delay as long as possible the move by energy users to solar, wind, and other alternative sources.
Advertisement
What Exxon says
The takeover will boost US energy security and “enable us to get more resource out of the ground more efficiently and with a lower environmental impact,” Woods told analysts on a conference call last week.
When Woods says “a lower environmental impact,” he means that combining Exxon’s and Pioneer’s land would allow for longer lateral drilling, requiring fewer wells and a smaller surface footprint. He also said Exxon would speed up Pioneer’s transition to net-zero emissions from drilling operations in the Permian Basin by 15 years to 2035 — which is Exxon’s target — and would use its “industry-leading new technologies” to curb methane emissions.
What’s left unsaid
Even if Exxon cuts its own greenhouse gas emissions in the fields, burning the additional oil and gas it produces would only worsen global warming.
What’s more, some — perhaps all — of the $60 billion could have been spent on developing alternative energy sources and technology that mitigates environmental damage from carbon emissions.
That would be good for the planet but bad for shareholders. There’s more money to be made keeping the world addicted to fossil fuels.
Looking ahead
Exxon has long been criticized by environmental groups for ignoring what its scientists knew about the climate threat posed by fossil fuels and paying lip service to clean energy. The Pioneer purchase borders on rejection of the scientific consensus that dramatic change is needed to ward off environmental disaster.
By touting the importance of energy independence without a strong commitment to alternative sources, Exxon’s behavior undercuts efforts to persuade American consumers and businesses to break the fossil fuel habit. It’s going to take far more than swapping gas-powered cars for EVs, installing heat pumps, and putting solar cells on rooftops to stop the earth’s warming.
Advertisement
There is more low-hanging fruit, including private jet flights, which produce at least 10 times more pollution per passenger than commercial planes, according to a report by the Institute for Policy Studies, a left-leaning think tank in Washington, D.C. The 99 percent wouldn’t cry many tears if the 1 percent were barred from flying on a Gulfstream V to Davos or Fiji.
But then what?
There are growing calls for Americans to eat less meat, and perhaps tax its consumption. An estimated one-third of global climate emissions are tied to food production, and the large majority of that comes from raising livestock, according to the United Nations.
The cruise industry is also under fire. A large luxury liner can have a carbon footprint greater than 12,000 cars, according to a study published in Marine Pollution Bulletin.
And if we go there, where do we stop?
Weaning America from burning fossil fuels is the biggest challenge this country has ever faced.
It only gets harder when Exxon and the rest of Big Oil are chanting “burn baby, burn.”
Larry Edelman can be reached at larry.edelman@globe.com. Follow him @GlobeNewsEd.