Dr. Vijay Swarup

As we think about the change that's going to be required, we have to think about all the dimensions of it. There's going to have to be technology change, there's going to have to be behavioral change, there’s going to be financial change, and all of those are going to have to come together for us to do what society wants – which is continue to have energy and lower emissions. 

Joanne Salih

I'm Joanne Salih, a partner in the Energy and Natural Resources Practice at Oliver Wyman. 

Vijay

Vijay Swarup here, Senior Director of Climate Strategy and Technology at ExxonMobil. 

Joanne

Vijay, thank you so much for joining. 

Vijay

Well, thank you. Yeah, this is great. 

Joanne

We've just come off of a panel discussing the $20 trillion challenge – the energy transition. Chunk of change. What does that mean to you? 

Vijay

I like the words ‘chunk of change’ because it requires two things. It requires a chunk of change, and it requires a chunk of change. This is a change unlike any others. It is taking a 150-year-old energy system and thinking about how do we transition that. How do we change that? 

So, we need to address that, which is going to require technology and collaboration and understanding how energy systems work together. And then underpinning that is going to be the change – is going to be the money. 

This is an incredibly large system, and I think one of the things that we don't do a very good job of explaining, because it's very hard to explain scale. It's really hard to explain scale because you have to imagine it because you can't actually see energy. 

As we think about the change that's going to be required, we have to think about all the dimensions of it. There's going to have to be technology change, there's going to have to be behavioral change, there’s going to be financial change, and all of those are going to have to come together for us to do what society wants – which is continue to have energy and lower emissions. 

Joanne

Others on the panel, as we discussed, know the importance of meeting demand. We are supplying to meet a demand. So, in that instance, what is the role of oil and gas companies today and in the future in advancing the transition and meeting the demand that we're talking about? 

Vijay

I think, again, a history lesson is always helpful. This is a 140, 150-year-old industry. Our company is about that same age. So, we've seen all the transitions from kerosene oil to replace whale oil, to cars and power coming, which gave us gasoline and gave us electricity power, gave us synthetic rubber. Fast forward, you get plastics. Fast forward a little bit more, you have advanced medicine. 

These are all chemistry. These are all based on molecules. 

We're doing things today that I would've never imagined we could do in 1987. And so I think we have to keep coming back to ‘what do we need to do?’ And we need to apply capabilities. 

So, the capabilities of our industry are scale capabilities. It's project execution, it's running reliably, it's understanding how to retrofit, okay? Because if you can reuse assets, that's a lot better than having to start fresh. 

And so it's integrating all that together. But let's not forget the other pieces that our industry knows how to do – work with policymakers because there's a lot of policy that underpins energy. Work with finance – so how do you actually do this? Go out and educate, work with investors, work with shareholders to bring it all together. And again, our industry understands how to do this. I am very proud that our company, specifically, knows how to do this. 

And so I think the question is, we know how to do this. Let us do this. Let us continue to supply demand. Let us make sure we're working on technologies and deploying the technologies. 

Remember the challenge here is we want to meet demand, lower emissions. So much of this is around the problem statement. And then working towards solving that problem at the scales that just are mind-blowing. 

Joanne

And as you said, ExxonMobil, a company which is well known internationally for managing scale, for managing the risks associated with this scale and also investing quite significantly. Right? 

So how has ExxonMobil approached this question and its role looking out over the next 5, 10, 20, 30 years? 

Vijay

I wish you'd have added one more thing to what ExxonMobil is known for and has done. And that is technology. And that is developing and deploying many of the foundational technologies that we do. 

Now, I said develop and deploy, not necessarily invent. And there's a difference between inventing and deploying. So, we don't necessarily need to invent the technology, but deploying at scale is what we do. 

And so again, we are looking at technologies that are ready to deploy today, and we're advancing those projects. If you think about the hydrogen project, we were talking about, the carbon capture, and we're still measuring in millions of tons when we're doing these because the scales are smaller today. 

But the pathway to gigaton starts with million tons. And so, understanding how technologies will scale is something that our research organization and a lot of our company is focused on. 

And then picking the technologies that build off of our capabilities. So simply put, if you think about energy, you need two things. You need molecules and you need electrons. If you had unlimited molecules and unlimited electrons, you could do whatever you want to do in energy. But it's very hard to find companies that can excel at both. 

We excel at molecules, so most of our projects are going to be on the molecules side that's managing the carbon-hydrogen interface. And so when you think about biofuels, you think about hydrogen, you think about carbon capture, which is managing the carbon side. It all comes back to molecule management and understanding how we can deploy these technologies at scale.  

Joanne

So, it's knowing what you do very well and it's applying it to, yep, it's a different set of technologies, but fundamentally the same principles. 

Vijay

And listen, thermodynamics isn't going to change. Physics isn't going to change. I'm pretty sure two plus two is going to be four tomorrow. So, the underlying math and science isn't changing, it's applied math, it's applied physics. Some call that engineering. So, it's bringing the disciplines together to do this.  

Joanne

And so on that point, how do we accelerate? 

Vijay

Yeah. And the simple way to do this is change the way you're going about doing it. So, a lot of energy and a lot of just human nature is to do things in series. You go from gate A to gate B, you go from technology readiness level, one to two, to three to four. You go from the lab to the small scale, to the larger scale, to the maybe even larger scale to then the big scale. Series. One unit of time in energy is 20 years. So how do you shrink that? You do things in parallel. Parallel processing beats series every day. What does that mean here? It means that you change the way you collaborate. 

So instead of waiting for it to go from one to two to three to four, before companies, step in, get in at one and start shaping that with the pathway to scale. So, look at the raw materials that are being used, look at the temperatures and the pressures of the process. Look at the geographic deployability of a technology and then work with the scientists and say, “good idea, you know if you switch this out for that, we'd probably go faster.” And then work with the policymakers, work with the markets to look at where you can deploy at a higher first step. 

Because we know this, we've proven this not just in energy, but in pretty much any technology. As scale goes up, cost goes down. So, you've got to get on what's called the deployment curve. Once you go on the deployment curve, you have the two different curves go. And that's where we are right now in the energy transition, you're beginning to see technologies getting on the deployment curve. So, whether it's carbon capture, whether it's hydrogen, about 10,15 years ago we began to see solar and wind get on the deployment curves. And you're beginning to see the fruit of that now today because they're beginning to improve – still small scale, but larger scale than they were 10, 15 years ago.  

So, I think we understand it. I think what we have to do is we have to change the way we collaborate and we have to change the way we go to scale and the way we go to market. And I think the more we can do that and the more shots on goal we can take with the variety of technologies, I think we increase the probability of success. 

Joanne

So on this point, just connecting collaboration with acceleration so we can go faster if we do things together in a certain way. The other actors in this ecosystem, the financers, whether that's institutional or it's private, the venture capitalists, the startups, the regulators, what are the roles that you think are going to be very important in – as I say – it's the journey? 

Vijay

It's a journey and it's also an all-of-the-above; energy is so complex. It not only requires every  

discipline of engineering and every discipline of science, it actually includes non-engineering and non-science. So social science, economics, law, policy all those things have to come together. And so the more you can build – what we call – ‘integrated roadmaps’ to understand – so the engineers can bring forward the vision to scale. The economics guys can look at it and say,“okay, well this is kind of the incentive you need to go forward”. The policymakers can say, “well, we can actually help catalyze that by doing that”.The social guys can say, “hey, this is actually how you do this in a fair transition”. And the more you bring everybody together and say, “we all have the same goal here, right?” I actually think the alignment on what the goal is is as good as it's ever been, right? It's get energy supply up, get emissions down. That actually is a monumental alignment step. 

Joanne

Right. And it's pretty simple. 

Vijay

And so now you want to think about, okay, what are you bringing to the party? And let’s get all the positions playing together. And, you know, no one company is going to do this. So every company then has to play to its strengths. And coming back to the molecules versus electrons, our company's strengths are in molecules. 

You know, the companies whose strengths are electrons, we need them to go and we need them to go as fast as they can go and hope they can go as fast as we're trying to go on the molecules side. And the more we can do that, again, the higher the probability that we can get get our arms around this chunk of change. 

Joanne

Yeah, exactly. And markets are intelligent. And as we've seen, they've rewarded that way of thinking. So, you know, the chunk of change and it will be a bigger chunk of change over time. And as indeed we've said over and over again, this is a journey. It's not a binary step. So we'll see how this all evolves. And no doubt ExxonMobil will be a big part of it. So thank you so much. 

Vijay

Thank you for this. These discussions are critical. So thank you for inviting us to this. 

Joanne

Couldn't agree more. Thank you. 

Vijay

Thank you. 

This transcript has been edited for clarity