Exxon Mobil Corporation (NYSE:XOM) continues facing significant pressure from investors who want the company to move with speed to address the climate change threat. On Monday, the company spoke out, outlining that it was channeling $100 billion in a project that would capture carbon emissions from some major industrial plants. The company will initially focus on plants within the Houston area before expanding out o the other regions. It says it will bury those emissions beneath the Gulf of Mexico.
Exxon eyeing a profitable deal
Exxon happens to be the biggest oil company in the United States, and market observers applaud its new move. According to analysts, the capturing of carbon emissions from petrochemical plants and other wide-ranging industries is lucrative. Exxon stares at a massive business opportunity and hopes that matters work out perfectly.
The company’s aspiration is one thing, but obtaining government support is entirely a different matter. It will need to get the government’s support to become successful in the undertaking. For example, the government must introduce a tax or price on carbon emissions. Matters don’t seem to be playing out quite well. The previous congress meeting was a blow to the deal, considering that the company didn’t get enough support.
The company needs to address challenges
Exxon confirms that it has already started capturing carbon. The company has been injecting the product into its older fields, an undertaking that has seen it generate more oil.
The company has disclosed its plan to utilize its expertise to store carbon dioxide produced by various industries. However, the company faces a massive challenge if it doesn’t establish a price for emitting carbon. Exxon understands that most businesses will need sufficient incentives to take up its services to capture and store their carbon.
The Obama administration must have been the first significant setback to Exxon’s plan when it failed to put in place a cap–and–trade system. The administration should have raised costs for the carbon-emitting companies. Obama’s administration had the right to compel companies to buy tradable permits to release gases into the atmosphere.