Exxon’s Latest Carbon Deal

Johnny Wentzel
carbon pipelines
Courtesy of ESG Today

Energy companies are commonly scooped up in mergers and acquisitions, flipping teams as often as an aging NFL running back. But ExxonMobil’s recent purchase of Denbury is a little spicier than your typical energy company takeover.

Background: The bulk of the whopping $4.9 billion deal surrounds Denbury’s carbon pipeline infrastructure and expertise, in addition to its oil and gas assets.

  • To date, most carbon-specific assets have been bundled into much larger energy deals as a tasty little bonus, like a pickle on a Big Mac. But in the Denbury sale, the carbon pipeline assets are the full Royale with Cheese.

The Big Deal is a big deal

Exxon is now the largest player in carbon transportation and storage on the Gulf Coast, an area dense with heavy industry and high carbon emissions.

With new incentives to reduce their own carbon footprint, the company also plans to sell access to their new infrastructure to other large emitters in the area.

  • It’s expected this deal will help accelerate the company’s existing investments into carbon capture and storage – a method for eliminating certain emissions by injecting and storing carbon dioxide underground.

Zoom out: For Exxon, the deal is a big step forward into the oil giant’s Low Carbon Solutions business, making the company the holder of the largest carbon dioxide pipeline network in the United States.

Time will tell if the gamble will pay off, or if they’ll be left holding the bag (of repulsive Arby’s).