Inside Exxon Mobil’s ‘God Pod’

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I really thought climate and energy would enjoy an enduring spotlight this week. Enter, GameStop, a company I haven’t thought about since I tried to like video games as a kid. (You can read our coverage of the rapidly snowballing story here.)

Still, it was a huge week for energy. Biden signed a sweeping executive order aimed at slowing climate change. General Motors, the second-largest American automaker, said it would stop making gas-powered cars by 2035. And that’s just the start of it. 

Let’s jump in. 

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Winners and losers in Biden's big day on climate 

Joe Biden has moved faster than any other US president to cut carbon emissions. On Wednesday, dubbed Climate Day, he signed a massive executive order that unravels much of Trump's fossil-fuel legacy. 

What it does: Most significantly, the EO puts a pause on new federal oil leases and directs government agencies to electrify their massive fleet of vehicles. 

• It also sets a target of protecting 30% of all federal lands and waters by 2030, an initiative the conservation community knows as 30 by 30.
• The order includes so much more. You can read the whole thing here. 
• The EO follows several other executive actions Biden signed on his first day in office, which I outlined last week. 

What it means: The bottom line is that it's very good for the clean energy economy but hardly a fatal blow to fossil fuels. There are a few clear winners and losers: 

• Winner: Companies that make electric cars and EV infrastructure. The government owns about 650,000 vehicles, and Biden said the fleet replacement will help create one million new jobs in the US auto industry, Insider's Kate Duffy reports. 
• Winner: Emerging technologies that fight climate change such as carbon capture and green hydrogen. The EO directs federal agencies to "identify new opportunities to spur innovation, commercialization, and deployment of clean energy technologies."
• Winner: Global oil companies, possibly. Though this may be counterintuitive, the idea here is that increasing the cost of production, which Biden's actions may do, could raise the price of oil, which largely determines the profitability of these firms. Plus, international companies aren't really impacted by the leasing ban. 
• Loser: Smaller oilfield service companies. A ban on federal oil leasing will be "very dramatic" for firms that supply oil companies with services such as seismic surveying, Rystad Energy said in a note this week. 
• Surprisingly not a loser: US exploration and production firms. The leasing ban won't do much to constrict oil production. Companies have been stockpiling leases and the ban doesn't apply to permitting, so it shouldn't do much to ebb near-term extraction. 

A note for investors: Morgan Stanley has some thoughts on how investors can profit from Biden's clean-energy push. The Wall Street bank named 14 stocks it's betting will surge. 

• Goldman Sachs has some ideas, too. Insider's Theo Golden reports on 26 renewable-energy stocks the bank says are best-positioned to benefit from the global net-zero push. 

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Inside Exxon Mobil's 'God Pod' and the challenges it's up against

Many of the problems that plagued Exxon in 2020 - which we've written plenty about - have followed it into the new year. We wanted to know who's facing off against them. 

Inside Exxon: This week we published an exclusive interactive org chart of 138 of the company's top employees. 

• The chart includes all of Exxon's executive wing, which some employees have called the "God Pod." 
• It also includes all presidents and VPs, from the head of HR to the firm's general counsel, and the people they manage. 
• If you've got a tip about Exxon's structure, or you think we're missing someone, you can reach me at [email protected] or shoot me a text at 646-768-1657. 

Turbulence ahead: Exxon is dealing with industry-wide problems, such as stunted demand for oil. But it's also got some challenges of its own. 

• As we reported yesterday, big-name investors including BNP Paribas's asset management unit are pressing the company to disclose in more detail how its lobbying activities align with the Paris Agreement. 
• The chief of BlackRock, the third-largest Exxon shareholder, implored companies to disclose their strategies towards contributing to the Paris Agreement in his annual letter to CEOs this week. (Read highlights from the letter here.)
• Meanwhile, activist investor Engine No. 1 and D.E. Shaw have been pressuring Exxon to commit to steeper emissions cuts and make changes to its board, the Wall Street Journal reported.  
• Exxon responded to Engine No. 1's nomination of four new board members Wednesday saying that it "will continue to update shareholders in the coming weeks on the company's strategy to build long-term, sustainable value for shareholders." 

Heads-up: Exxon reports earnings on Tuesday, and is expected to announce another quarter of loss. 

• For comparison, Chevron reported earnings today including a 2020 loss of $5.5 billion, its worst year since 2016. 

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Startups: Meet 5 battery firms taking on a $129 billion market, Climeworks gets Microsoft money 

We knew this year would be huge for the EV industry and it has been, on news from this week alone. 

• GM said it would go all-electric. 
• Battery startup Sila Nanotechnologies raised another $590 million. 
• Shell agreed to buy EV-charging company Ubitricity
• And that's to say nothing of Biden's executive order or his nominee for Energy Secretary, who, as governor of Michigan, secured loads of funding for EVs. 

Not so fast: It will still take time to electrify a considerable chunk of vehicles in the US. We're not even close. Challenges stand in the way including the high price of batteries, which leads me to a story from Insider's Lianna Norman. 

• Norman spoke to analysts, consultants, and VCs to find the top 5 top battery startups working on those challenges and vying for a chunk of the $129 billion battery market. 
• "Battery startups are increasing the density, stability, and power efficiency of their designs by experimenting with battery composition," Norman writes. "And if any of them deliver, they could considerably expand the possibilities within the lithium-ion battery market."

In other climate-tech news: Carbon capture is also having a good year so far. This week Microsoft announced it was backing the Swiss carbon-removal startup Climeworks. 

• Any moment now we could also hear more about Elon Musk's new carbon-capture prize. He announced it on Twitter last Thursday and said he'd share more details this week.
• We highlighted four carbon-capture startups that VCs said are set to soar this year. 
• And finally, Tony Stark aka Robert Downey Jr. is launching a new venture fund for sustainability startups called Footprint Coalition Ventures. 

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4 other big stories this week 

• In her confirmation hearing this week, Energy Secretary nominee Jennifer Granholm said she would focus on job creation in regions that produce fossil fuels, Insider's Ayelet Sheffey reports. 
• The team of engineers and scientists responsible for oil exploration at BP has been "swept aside" in the oil giant's green push, Reuters' Ron Bousso reports. 
• Tesla lost $66 billion in market value Thursday after reporting its Q4 earnings, which fell short of analysts' estimates, Market Insider's Theron Mohamed reports. 
• Renewable energy produced more electricity than fossil fuels in the EU last year for the first time in history. 

That's it! Have a great weekend. 

- Benji