Exxon Surprises Clean Tech Stock by Halting Green Refinery Test
(Bloomberg) -- Exxon Mobil Corp. surprised investors in a clean technology provider by halting a four-year long project to install new emissions-reducing equipment at a Texas refinery.
ClearSign Technologies Corp. was in the final stages of testing process burners that reduce nitrogen-oxide emissions from refineries and expected they would be installed at Exxon’s Baytown facility during planned maintenance next year. But ClearSign’s Chief Executive Officer Jim Deller learned yesterday on a call with Exxon that the novel technology wouldn’t be implemented in the 2022 maintenance, or turnaround, season.
ClearSign’s stock plunged 27% in New York, its biggest drop as shares sunk to their lowest price in more than 11 months.
“We knew the timing of the turnaround was tight, but we didn’t know the timing of the turnaround had moved,” Deller said Friday in an interview. “Finding out on the call that the window had actually passed was a great surprise to us.”
Process burners are a key part of a refinery’s combustion process that help to manufacture refined products such as gasoline and jet fuel from crude oil. They’re also a major source of emissions. ClearSign says its process burners create flames in a way that eliminates as much as 75% of nitrogen-oxide emissions. Nitrogen oxide is a toxic gas that combines with sunlight to break down ozone in the atmosphere and can be damaging to human health at ground level.
Exxon has been under pressure to improve its environmental performance this year, with three dissident directors elected to its board after a six-month activist campaign by Engine No. 1.
“ExxonMobil remains committed to mitigating emissions in company operations,” the Irving, Texas-based company said Friday in an emailed statement. “As a matter of practice, we do not comment on commercial agreements.”
ClearSign has been working on the marquee project with Exxon since 2017 and in June last year received an order to purchase and manufacture full-size burners.
“Our perspective was that our burners were really meeting the requirements,” Deller said. “We were expecting to arrange a date for their final review of the technology and then arrange shipping of the burners. The Exxon project team informed us that the actual window for equipment to be included in the upcoming turnaround had passed.”
ClearSign has trials with other major oil companies and anticipates strong demand for its products as regulations get more stringent in California and subsequently in Texas, Deller said. The company’s process burners can be retrofitted into existing systems at low cost and can even improve refinery throughput, he said.
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