Exxon Is Spending $1 Billion Per Year On Green Energy

Exxon's environmental history isn't exactly a green one. The massive oil company may have single-handedly "set back all of humanity," according to The Hill, and is known for having denied climate change for decades. It's been in multi-billion-dollar lawsuits over environmental damage, and has allegedly attempted to suppress shareholder views on the threat of climate and the company's involvement in exacerbating it. 

It may come as a surprise, then, to learn that the company has been spending big on environmentally friendly technology. Every year, Exxon pours $1 billion into hundreds of green energy projects in 10 key areas, including algae biofuels, biodiesel made from agricultural waste, and more efficient ways of refining crude oil. That's right: Exxon is not only investing big money into green energy, but they're also a great example of how companies can transition into renewable spaces and make better choices for the environment, no matter their industry.

While the company has made some of its projects public in the past, it is only now revealing how widespread the initiatives have been. Since 2008, Exxon has spent $8 billion researching, developing and deploying low-carbon technologies, and is now committed to spending $1 billion annually. 

“These areas are massively challenging, and if we can solve those, they will have huge impacts on our business,” Exxon's vice president of research and development Vijay Swarup told Bloomberg. “We bring more than money. We bring the science, the commitment to research.”

The company's main project—and the only one that has public until now— is harvesting algae in ponds or oceans to process into a biofuel. Swarup expects that this fuel will be blended with diesel and jet fuel at first, but the ultimate goal is to sell a 100 percent algae-derived fuel for commercial consumption. 

Other projects include a partnership with Renewable Energy Group Inc. to create biodiesel from agricultural waste like corn husks; fuel cells that generate electricity using carbon dioxide instead of natural gas and hydrogen; and a partnership with Georgia Institute of Technology to find a more sustainable way of refining crude oil into plastic, which Exxon hopes will work to cut carbon dioxide emissions by half. 

None of these technologies will hit the market any time soon, but the company is focusing on the algae biofuels and carbonate fuel cells first, which Swarup said is "still 10-plus years away." The company is also focused on projects that can scale to a global level to make the biggest impact. 

“Oil and gas companies tend to consider other elements of an investment beyond just the short-term revenue potential,” Rick Wheatley, executive vice president of new growth at Xynteo Ltd., a consultancy that advises Shell, Statoil ASA and Eni SpA on sustainability, told Bloomberg. “They may be more likely to see technologies as pieces that can be combined into larger products or solutions and therefore have higher tolerance for early stage and experimental ideas.”

Exxon isn't the only oil company jumping into sustainability. Royal Dutch Shell Plc is developing wind farms in the North Sea, and France’s Total SA has acquired smaller renewable companies to join the bandwagon that could replace up to 8 million barrels of crude oil a day, according to Bloomberg.