One of Donald Trump’s priorities upon returning to the Oval Office in January is to withdraw the United States from the Paris Climate Agreement. This move is welcome news for those who oppose the decarbonization agenda, which undermines freedom, prosperity, and mobility. Given that petroleum the bête noire of the global climate cult, you might expect major oil companies would support U.S. withdrawal from the agreement. That doesn’t appear to be the case.
Soon after Trump’s intentions for the Paris agreement became clear, major oil companies signaled their opposition to his decision. Instead, they favor continuing down the path of heavy regulation and government subsidies for their industry, aligned with the priorities of the global climate community. As reported by Fox News, “Big Oil is calling on President-elect Donald Trump to keep the U.S. in the Paris climate agreement after withdrawing from the treaty during his first term.”
It’s disheartening to see a once-iconic American oil company transform into a post-capitalist entity that depends heavily on government funding for its revenue.
Why would companies whose primary business is extracting and selling petroleum align themselves with an unelected body openly hostile to oil and committed to achieving “net zero” production within a generation?
Unfortunately, this approach is a betrayal to those who have long defended Big Oil as a pillar of capitalism. Big Oil’s actions now appear to be in direct conflict with free-market principles.
By supporting government-mandated climate compliance, major oil companies can eliminate competition from smaller players in the short term, consolidating their market dominance. In the long term, they aim to secure government grants and subsidies for carbon-related initiatives, positioning these as a significant revenue stream.
ExxonMobil has made it clear that it sees the government as its future largest customer, carbon-related initiatives as its primary product, and government funding as its main revenue source. In the short term, the company seeks to leverage government power, under the Paris Climate Agreement, to eliminate competition from independent oil producers.
The Wall Street Journal reports that ExxonMobil CEO Darren Woods opposes Donald Trump’s plan to withdraw from the climate accord. According to the article, Woods argues against the withdrawal, citing ExxonMobil’s efforts to expand outreach to government officials and advocate for “global carbon accounting measures.”
While the specifics of “global carbon accounting” remain unclear, it seems far removed from real-world generally accepted accounting principles. It is reasonable to assume that this concept involves government officials distributing taxpayer money to favored entities — a group Woods clearly intends for ExxonMobil to join.
The WSJ story goes on to say that ExxonMobil and other major oil companies are lobbying the incoming GOP leadership to preserve tax credits included in Joe Biden’s “signature climate law,” the Inflation Reduction Act. These credits reward technologies like carbon capture, in which the companies are heavily invested.
The IRA is a boon for Big Oil’s carbon-related projects. During an energy conference last March, Woods voiced his support for the legislation, stating, “I was very supportive of the IRA — I am very supportive of the IRA …”
In plain terms, ExxonMobil wants more taxpayer money and federal tax credits to fund its carbon mitigation initiatives. Meanwhile, you better believe small, independent drillers in West Texas are left out of these taxpayer subsidies. ExxonMobil, by contrast, is angling to make taxpayer subsidies a major source of revenue.
The Guardian in August highlighted how ExxonMobil has pivoted its business strategy to heavily rely on government subsidies for its carbon capture and storage operations. The company launched its Low Carbon Solutions division in 2021 and began lobbying for direct government funding. Through the Inflation Reduction Act, ExxonMobil secured a subsidy of $85 per ton of captured carbon. Dan Ammann, head of the Low Carbon Solutions unit, said the carbon capture business could eventually become “larger than ExxonMobil’s base business.”
It’s disheartening to see a once-iconic American oil company transform into a post-capitalist entity that depends heavily on government funding for its revenue.
Trump’s selection of Chris Wright as energy secretary offers a glimmer of hope for the American petroleum industry.
In the oil patch, Wright’s appointment has been met with much rejoicing. As the founder and CEO of Liberty Energy, Wright understands well the challenges faced by independent oil producers. Unlike major oil company executives who apologize for their industry and align themselves with climate activists, Wright unapologetically defends the petroleum sector. Described as a “dedicated humanitarian on a mission to better human lives by expanding access to abundant, affordable, and reliable energy,” Wright has earned respect across the industry.
But Wright’s fight to protect American oil won’t just involve battling left-wing advocates of net-zero policies. He will also face opposition from major oil company executives who have aligned with radical climate agendas, working to suppress independent producers while ceding control of the oil business to the government. He’ll need all the help he can get.
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