Good morning, here's what the Oilman has for you today:

• Exxon Goes All in on Carbon Capture

• IEA Predicts “Age of Electricity”

• Tweet of the Day

Exxon Goes All in on Carbon Capture

Exxon is raising its bet on carbon capture.

It just leased over 270,000 acres in the Gulf of Mexico.

The area will be used for injecting CO2 into the seabed.

Hot, hot, hot carbon capture

Carbon capture is considered a key tech for the energy transition.

It’s not enough to reduce CO2 emissions, the argument goes.

We also need to suck them out of the air or trap them as they are generated.

Then we can dump them underground.

Or, in this case, underwater and underground.

Big Oil is understandably excited about carbon capture.

It helps bring down their emissions.

Not that anyone’s appreciating it, of course.

But carbon capture also gives Big Oil access to IRA money.

Who doesn’t like some federal subsidies?

The administration is promising $85 per ton of non-emitted CO2.

It’s a bargain.

A trillion-dollar market

Exxon’s Gulf lease is the latest step in a race that’s intensifying.

All the big oil players want a piece of the carbon capture pie.

Money’s just part of the whole story.

The other part is cleaning up reputations.

Not that there’s much hope of that ever happening.

But there is also money to be made from carbon capture.

Outside subsidies, that is.

Exxon expects demand for CO2 capture is set to rise.

And people will be paying for that capture.

The cherry on top: with lower emissions, Big Oil can keep being Big Oil.

Which is precisely why activists hate carbon capture.

IEA Predicts “Age of Electricity”

The IEA has predicted that we’re on the brink of a new age.

That would be the Age of Electricity…

And oil and gas will get cheaper. Somehow.

A paradoxical transition

In a new report, the IEA repeated its prediction that oil and gas demand will peak soon.

This would happen before 2030, the agency reiterated.

But then it said something weird.

It said as demand falls, there will be surplus supply.

However, this surplus supply will drive more investment in the transition.

In other words, the cheaper oil and gas are, the less demand there would be for them.

And this will lead to more money being spent on wind, solar, and EVs.

Essentially, the IEA says that the cheaper oil and gas get, the less demand for them.

Which is the exact opposite of how things work out in real life.

And that report came out just days after the same agency predicted growing gas demand.

How it all fits is unclear.

It’s important to keep dreaming

The IEA cites EVs as a reason for oil demand decline.

But just this week, car executives warned that EVs are not going well.

BMW’s CEO even said the 2035 EU car ban was no longer realistic.

As if it ever was.

Heat pump sales are also not going well.

Solar and wind are growing, that’s for sure.

And they’re leading to negative prices.

The IEA could probably spin this as a positive, too.

But it won’t change facts.

Just look at oil and gas investment.

Tweet of the Day

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