Peak ESG: Exxon Proposing $100 Billion Taxpayer-Backed Carbon Capture Project

Tyler Durden's Photo
by Tyler Durden
Thursday, Apr 22, 2021 - 02:45 AM

Exxon is trying to cash in on some of the ESG hysteria that has gripped markets over the last 18 months by offering up the idea of a $100 billion hub to capture carbon dioxide along the U.S. Gulf Coast.

And given all the hot money in ESG and the Biden administration's propensity to print and throw cash at anything that sounds the slightest bit "green" without paying any rhyme or reason to cost/benefit, we can't say we blame Exxon. 

Exxon "along with a multitude of private and public partners" would build the facility to trap emissions from refineries and facilities along the Houston Ship Channel, the Houston Chronicle reported. The facility "could bury 50 million tons a year beneath the Gulf of Mexico by 2030", the report notes. This is more than all CCS projects currently in operation. 

The cost of such a facility had never made sense in the past, which is why Exxon is now lobbying for taxpayer money to engage in the project. “It will need government and private-sector funding, as well as enhanced regulatory and legal frameworks that enable investment and innovation,” the company said.

The company had started a similar, smaller project in Wyoming last year, but it was put on hold due to (surprise) the economics amidst the pandemic. 

And while Exxon is trying to tap into the ESG mania, Board Member Jeff Ubben has also been warning about some of the ESG products on the market. Back in March we noted that there probably isn't much of a better weathervane on ESG investing than Ubben. Ubben was ahead of the curve in embracing the idea of ESG investing before it became the FOMO-investing-technique du jour for most of 2020 and 2021. 

Back in January 2020, Ubben was praising BlackRock for its stance on climate change. “It is pretty exciting,” he said. “ESG, that’s the ticket that’s how we get the long-term back." 

But then in March 2021, just 15 months after his original comments, Ubben went on record in saying BlackRock's ESG products "won't address climate change". 

In what now was perhaps a bit of telegraphing and pre-planning, Ubben called them "misguided" last month and said he takes exception to the ESG products because "they don’t reward carbon-intensive companies that are reducing emissions".

Ubben said that simply buying ETFs because they have a high ESG score has a "very second or third derivative effect" on climate change.  

And, of course, Ubben is right and is waking up to a reality that, eventually, we expect the rest of the market to open its eyes to. We have constantly documented the numerous "ESG" funds that have hilariously bought up names like Chevron, Exxon, Microsoft, Apple and other names that seemingly don't have any "extra" added environmental benefits to them.

Some ESG funds break down to look just like index funds. Others seem hilariously askew to be "ESG" focused. 

Last month we wrote that Tariq Fancy, former chief investment officer for Sustainable Investing at BlackRock, wrote an op-ed in USA Today, admitting that Wall Street is greenwashing the financial world, making sustainable investing merely PR, which is a distraction from the problem of climate change.

Fancy appeared later in the day on CNBC and stunned the always-ready-to-virtue-signal anchor by telling her that that “the financial services industry is duping the American public with pro-environment, sustainable investing practices.”