Nation & World

Exxon will use wind, solar to produce crude oil

Purchase is 'unprecedented': analyst

Dallas Morning News/TNS

Booming production in the Permian Basin is helping Exxon offset declining output elsewhere in the world.
Dallas Morning News/TNS Booming production in the Permian Basin is helping Exxon offset declining output elsewhere in the world.

Exxon Mobil will use renewable energy to produce oil in West Texas.

Under 12-year agreements with Denmark’s Orsted A/S, Exxon will buy 500 megawatts of wind and solar power in the Permian Basin, the fastest growing U.S. oil field.

It is the largest ever renewable power contract signed by an oil company, according to Bloomberg NEF.

Terms of the agreement weren’t disclosed.

“It will be interesting to see how the other oil majors respond,” said Kyle Harrison, a BNEF analyst. “A purchase like this has historically been unprecedented.”

Exxon, which was sued by investors who said the company downplayed risks of global warming, is turning to clean energy as it becomes cheap enough to compete with fossil fuels.

The wind and solar farms are being built in a region where electricity demand is soaring as oil production grows.

“We frequently evaluate opportunities to diversify our power supply and ensure competitive costs,” Julie King, a spokeswoman for the Irving, Texas-based oil producer, said in an email.

The company denies misleading investors about climate change.

Booming production in the Permian Basin is helping Exxon offset declining output elsewhere in the world.

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But output in the region has grown so fast that infrastructure including pipelines and power plants have struggled to keep up.

One area of the Permian, called the Delaware Basin, consumed the equivalent of 350 megawatts this summer, tripling its load from 2015.

That’s enough to power about 280,000 U.S. residences.

Providers say demand is likely to triple again by 2022.

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