How Political Forces Are Shaping the Future of the Oil Industry

Regulatory Changes Impacting the Oil Industry

Regulatory changes, including obtaining necessary permits and government policies like the renewable fuel standard and the Inflation Reduction Act, significantly impact the oil industry by influencing project outcomes, market conditions, and efforts to decarbonize.

"Actual future results, including project plans, schedules, capacities, production rates, and resource recoveries could differ materially due to: changes in market conditions affecting the oil and gas industry or long-term oil and gas price levels; political or regulatory developments including obtaining necessary regulatory permits; reservoir performance; the outcome of future exploration efforts; timely completion of development and construction projects; technical or operating factors; and other factors cited under the caption 'Factors Affecting Future Results' on the Investors page of our website at exxonmobil.com and under Item 1A." --- (XOM, press release, 2024/05/07)

"The company’s oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors." --- (CVX, sec filing, 2024/Q1)

"Actual future results, including project plans, schedules, initial capacities, production rates, and resource recoveries could differ materially due to: changes in market conditions affecting the oil and gas industry or long-term oil and gas price levels; political or regulatory developments including obtaining necessary regulatory permits; reservoir performance; the outcome of future exploration efforts; timely completion of development and construction projects; technical or operating factors; and other factors cited under the caption 'Factors Affecting Future Results' on the Investors page of our website at exxonmobil.com and under Item 1A." --- (XOM, press release, 2024/04/12)

"And so we're pleased with both of these. There are markets, maybe to your point about economics that are in some ways heavily influenced by government policy, be it the renewable fuel standard and the Low Carbon Fuel Standard, which affect renewable fuels or some of the things in the investment or the inflation reduction act that affect hydrogen." --- (CVX, earning call, 2024/Q1)

"We see long-term demand for oil continuing, albeit with a much lower emissions footprint as we continue to find ways to decarbonize." --- (XOM, earning call, 2024/Q1)

Environmental Policies and Oil Industry Transformation

Environmental policies are driving the oil industry's transformation by pushing companies like Chevron and ExxonMobil to innovate in alternative energy, improve sustainability, and adopt stricter standards. These efforts include advancements in renewable fuels, energy efficiency, and water stewardship, reflecting a shift towards a lower carbon future.

"EnerCom is currently accepting applications from start-up companies focused on innovation in alternative energy, advanced oil and gas technology, environmental sustainability, and carbon solutions to present at The Energy Transition and Emerging Technology Session at EnerCom Denver." --- (CVX, press release, 2024/06/24)

"In addition, historical, current, and forward-looking environmental and other sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making." --- (XOM, sec filing, 2024/Q1)

"We are working to advance a lower carbon future. Our recent achievements across production, technology, and renewable fuels demonstrate our progress." --- (CVX, Twitter, 2024/05/03)

"The Outlook is reflective of the existing global policy environment and an assumption of increasing policy stringency and technology improvement to 2050." --- (XOM, sec filing, 2024/Q1)

"Jacob helps lead water stewardship initiatives at our Richmond Refinery, focusing on improving energy efficiency and reducing water consumption." --- (CVX, Twitter, 2024/05/30)

International Collaborations Shaping Oil's Future

International collaborations, such as ExxonMobil's joint venture with Maverick Energy and Chevron's emphasis on partnerships, are pivotal in shaping the oil industry's future by fostering innovation and accelerating the energy transition.

"Dated November 27, 2023, the Agreement provides a roadmap for collaboration between the Companies which could hold great potential, with work pursuant to the Agreement to begin within the next few weeks. In their efforts to expand the Company's Lithium projects, Willcox International, through its subsidiary Willcox Energy Inc. will begin testing oil field brines made available by Maverick in several potentially high lithium concentration areas." --- (XOM, press release, 2024/05/02)

"Collaboration is the key to accelerating energy transition. Read more about what Jeff Gustavson, president of Chevron New Energies, has to say about working together: https://t.co/9vsgprMLFz https://t.co/NUqgeAeKSd" --- (CVX, Twitter, 2024/05/29)

Lobbying and Political Influence in the Oil Industry

ExxonMobil and Chevron leverage lobbying to influence shareholder democracy, balance carbon solutions with economic prosperity, and navigate political risks. ExxonMobil's advocacy for shareholder democracy and its stance on executive pay incentives for GHG reductions highlight its political engagement.

"We will continue to be a forceful advocate for safeguarding the process of shareholder democracy." --- (XOM, event transcript, 2024/05/29)

"The industry must balance two goals: lower carbon solutions and economic prosperity." --- (CVX, Twitter, 2024/05/23)

"Last year's support was 91%. The proposal to revisit executive pay incentives for GHG emission reductions was not approved." --- (XOM, event transcript, 2024/05/29)

"And that production looks stronger than we expected. And then also any political risk you might want to comment on out there?" --- (CVX, earning call, 2024/Q1)

"That includes hiring and compensation. For us, this is not just good policy, it's absolutely vital to our business. Plus, we've already shared data that makes this proposal unnecessary in our investing in people report, which by the way goes beyond U. S. Disclosure requirements." --- (XOM, event transcript, 2024/05/29)