Good morning, ladies and gentlemen. Can I ask you to please take your seats? Good morning, and welcome. I ask that the meeting please come to order. I am Darren Woods, Chairman and Chief Executive Officer of Exxon Mobil Corporation. I am very pleased to welcome you here this morning, including our shareholders who are listening via the internet. For those of you who are here, I hope you had a chance to talk to some of our employees before coming into the meeting. These men and women are among the more than 70,000 people who work for you around the world. Results I share with you today are their results, and I am very privileged to stand here and to speak on their behalf. Next to me is Jeff Woodbury, Vice President of Investor Relations and Corporate Secretary. He will help me run the meeting today.
I will introduce the members of the board later in the meeting. It is the policy of the corporation to provide confidential voting to shareholders. If you didn't include comments with your vote, your proxy card hasn't been seen by the company. Anyone wishing to vote in secret at this meeting can obtain an envelope from the ushers. Proxy cards will be collected later in the meeting. The list of shareholders entitled to vote is available for inspection. If anyone wishes to examine this list, an usher will direct you to the proper location. Shirley Nessralla and Paula Buckley of Computershare Trust Company are here. They have been appointed inspectors of election for this meeting. They've taken an oath of office that has been delivered to the secretary for filing with the minutes. Notice of this meeting has been properly given.
The inspectors of election have determined that a quorum is present. There are 3.6 billion shares represented at this meeting. This equates to approximately 85% of outstanding shares entitled to vote. I direct the determination of the number of shares entitled to vote be filed with the minutes. I declare a quorum present and the meeting ready for business. We'd now like to explain our plan for conducting the meeting today. First, Jeff will outline the guidelines for the meeting. He will also outline how to gain recognition. Then I will make some comments about our business and vision for the future. After the business overview, we'll have a technology presentation, followed by a video. Next, the items of the business will be presented. There are 13 proposals from the board of directors and shareholders. Proponents of shareholder proposals or their authorized proxy will introduce their proposals.
I will briefly summarize the board's response. The polls will be closed, and the formal business of the meeting will be concluded. The inspectors of election will give us their preliminary voting report. We'll then have a discussion period for comments or questions regarding our business. If we have time, we'll try to respond to some questions submitted via proxy cards and the internet. Following the discussion period, I will close the meeting with a few remarks. Shown in this slide is a list of proposals that will be presented and voted on this morning. There are 13 items of business. We'll begin with the election of directors and ratification of independent auditors. We'll then turn to advisory votes to approve executive compensation and frequency of future voting. We will continue with the nine shareholder proposals shown in the proxy statement.
At this time, let me turn the podium over to Jeff.
Thank you, Darren. Ladies and gentlemen, good morning. I would first like to take this opportunity to familiarize everyone with the safety features of this auditorium. In the case of an emergency, we will be notified by the public address system. Emergency exits for the ground level, as shown on the screen behind me, are situated at the rear of the auditorium, where you entered this morning, and down in the front on either side. If we do need to evacuate, please proceed to the nearest exit, and the Meyerson personnel will guide you the best way out. In addition, for safety reasons, please do not stand in the aisles or at the back of the hall, and please do not block the exits. To ensure that the meeting is productive and conducted in the interest of all of our shareholders, there are certain guidelines governing this event.
In the program, you will find the rules of conduct to ensure an orderly meeting that respects the rights of all participants. Only shareholders as of record date or their properly appointed proxies will be entitled to speak during the meeting. The laws of New Jersey, where ExxonMobil is incorporated, provide that no business can be brought up for a vote unless proper notice has been given to all of our shareholders. Therefore, in the fairness to other shareholders not in attendance and in keeping with the laws that govern our annual meeting, formal business of today's meeting is restricted to the items included in this year's proxy statement. In order to present a proposal, you must have checked in at the admissions desk in the lobby and verified that you are the proponent or a duly authorized proxy under New Jersey law.
Presenters whose credentials have been verified will be given a blue presenter's pass. If neither the proponent nor an authorized proxy is checked in, we will presume the proponent is not present, and I will move the proposal for the purposes of the orderly conduct of the meeting, and so that the shareholder votes cast may be recorded. However, I will not be acting as a representative of the proponent. The authorized presenter of the shareholder proposal will have up to two minutes to present the proposal while the usher holds the microphone. Time may not be shared with another speaker, and no second to the motion is required. If, during the discussion period, you wish to make comments, please fill out a speaker identification card that was included in your program provided to you as you entered the lobby.
This card confirms that you meet the requirements to speak at this meeting. If you'd like to address the meeting, move to a reserved aisle seat, remain seated, raise your hand holding your speaker identification card to indicate to the chairman that you wish to speak. When recognized by the chairman, give your completed speaker card to the usher. Please stand and begin by stating your name. You may speak for up to two minutes while the usher holds the microphone. We request that individual shareholders respect the rights of others to speak, and please keep your comments as brief as possible. In this regard, we ask that matters of personal interest that are not relevant to all shareholders be raised directly with appropriate company representatives outside the annual meeting.
Due to the large number of items on today's agenda and the need to conclude the meeting within a reasonable period, we cannot assure that every shareholder who wishes to speak will be able to do so. As we've done in the past, we have provided a timing system with lights to help speakers manage their time, and I'll demonstrate the system at this time. When the chairman recognizes a speaker and an usher has arrived with a microphone, a green light will come on that displays on both sides of the stage. The hall microphones will be activated only after the speaker has been recognized by the chairman. When the speaker's time remaining reaches 30 seconds, a yellow light will turn on. A red light will indicate the speaker is at the end of the time allowed, and at that point, we ask that you conclude your comments.
Finally, as we typically note at the outset of similar meetings, I'd like to draw your attention to the cautionary statement. This statement contains information regarding today's presentation and discussion. You may also refer to our corporate website for additional information on factors affecting future results, as well as supplemental information defining key terms that we'll use throughout the meeting today. Now I'll turn the podium back to the chairman to provide an overview of the business. Thank you.
Thank you, Jeff. This morning, I'll be focusing on the many ways ExxonMobil creates value for our shareholders and for broader society. I'll also be sharing key business highlights, including our recent success in Guyana. The photo behind me shows the drill ship, which is now operating offshore. Let me begin by reflecting on fundamental market conditions. As you are aware, last year, oversupply drove prices to their lowest level in a decade. Today, the market has become more balanced, but uncertainties remain. Global supply is dynamic. New projects are coming online. OPEC production is changing, and geopolitical uncertainties remain. As the world grows, the middle class also grows, and standards of living improve. Over the next quarter-century, we expect energy demand to increase about 25%. This demand growth and a dynamic supply environment, we expect continued market volatility in both the short and the long term.
Our job is to compete and succeed in any market, irrespective of conditions or price. To do this, we must produce the highest value products at the lowest possible cost in all operating environments. We are uniquely positioned to do so. We are confident in our people, our organization, and our world-class integrated businesses. Let me turn now to how we translate these fundamentals into value. Our winning proposition is underpinned by six pillars, beginning with unparalleled financial strength. This strength gives us the flexibility to invest in attractive opportunities across the business cycle. The second pillar is the integration of our upstream, downstream, and chemical businesses. This integration offers us unique insights into trends and market conditions. It also gives us the flexibility to capture the highest value for each molecule as it moves along the value chain.
Next is operational excellence, which is fundamental to ensuring safe and reliable operations. In volatile market conditions, smart cost management and capital discipline are critical. A portfolio of high-quality assets drives long-term leading results in any market environment. Finally, technology leadership allows us to break through barriers and solve complex problems through innovation and discovery. Of course, these pillars stand on the foundation of a world-class workforce dedicated to delivering results and driving success. All this leads to a business that performs well across a range of market conditions, maximizing returns over the long term. We consistently outperform our peers. Over the past 10 years, Exxon Mobil's return on capital employed averaged almost 20%, more than five percentage points higher than the nearest competitor. As you can see here, this leadership extends to each of our business segments: upstream, downstream, and chemical.
Each of these is a powerhouse in its own right. Let me now turn to our mission: supplying energy for modern life, improving living standards around the world while minimizing the impact on the environment, including the risk of climate change. This dual challenge is among the most important issues facing society and our company. We're working on both aspects. In the long term, we think these efforts will lead to even greater shareholder value. We'll talk a little later in the meeting about how technology is helping to address this challenge, including a presentation by our Vice President of Research and Development. I'd like to spend a minute now discussing the importance of our mission, the role that energy plays in human development. We all know that access to energy helps improve living standards. Economic growth and energy use go hand in hand.
The equation on the left captures this connection. Energy needs are a function of population and living standards. The graph on the right further underscores the connection. Vertical axis shows the UN Human Development Index, made up of income, education, and life expectancy. The horizontal axis is energy use. In short, as quality of life improves, energy use increases. Put another way, energy enables human development. According to the International Energy Agency, or IEA, about 1 billion people live today without electricity. About 3 billion don't have modern fuels for cooking. This can result in significant health impacts, leading to shorter lifespans. Increasing access to affordable, reliable energy leads to meaningful change for people. It also supports growth of the middle class. That middle class is expected to increase to more than 5 billion people by 2040. This will help raise energy demand by 25%, even with big efficiency gains.
That demand growth will come mainly from developing countries such as China, India, and countries throughout Africa. Countries where new homes, cars, and refrigerators will all require new supplies of energy. All viable energy sources will be necessary to meet society's development needs. This chart shows how the energy mix has changed over time. In the middle of the 19th century, the world was almost entirely dependent on wood. Today, oil and natural gas meet more than half the world's energy needs. The rest is met by coal, nuclear, solar, and other sources. Our expectations of the future energy mix are consistent with those of other forecasters. Innovation drives the evolution of energy sources, expanding and diversifying the world's supply. You can see the long time it takes for new energy sources to be widely adopted, largely because of the size and scale of the energy system.
As we work to supply the energy important for development, we must also be mindful of the impact on our environment. This chart shows our projection for energy-related carbon emissions by region. Similar to other outlooks, we expect emissions to slow consistent with the Paris pledges, and we expect emissions to peak and gradually decline in the 2030s. Emissions in developed countries, those belonging to the OECD, have been declining for the past several years. We expect that decline to continue with new technology and efficiency. Emissions in non-OECD countries are rising with the increasing energy needs I mentioned earlier. These increases would be even larger if not for a culmination of many efforts by individuals, companies, and governments. As an energy company, it's essential that we continue to reduce emissions from our operations.
We have done this by improving efficiency at our manufacturing facilities and through investments in flare reductions and other technology. We're also working to develop products that enable consumers to reduce their environmental footprint. An example is lightweight plastics that help cars go further with less fuel. To make an even bigger impact, we are working on fundamental technology breakthroughs that could reduce emissions even more. Finally, we engage in public policy discussions on the best way to manage the risk of climate change. When it comes to policy, we think the goal should be to reduce emissions at the lowest cost to society. To do this, we need a deep understanding of the issue. That's why we've been involved in climate research for 40 years. Our objectives are to understand the fundamental science, focus our technology developments, and support sound policy.
We partner with universities and participate in organizations like the Intergovernmental Panel on Climate Change, or IPCC, and the National Research Council. In fact, the IPCC selected ExxonMobil to contribute to its past four assessments. As I said a moment ago, we think the goal of carbon policy should be to reduce emissions at the lowest cost to society. We have established principles to guide our analysis of proposed approaches by governments. These principles led us to support the Paris Agreement as an effective framework for international action. They led us in 2009 to conclude that a revenue-neutral carbon tax was a viable option for policymakers to consider. We have been encouraged to see the recent proposal put forth by James Baker, George Shultz, and the Climate Leadership Council that aligns closely with our longstanding principles.
We have studied the proposal in depth and plan to support it as it progresses. While policy will play an enabling role, technology will be key to addressing the risk of climate change and the growing need for energy. Technology will continue to provide new sources of energy and reduce energy and carbon intensity. Think of the breakthrough in unconventional natural gas here in the U.S. This has been a key driver to lowering emissions from power generation. In fact, emissions are lower than they've been in decades, and emission intensity is at record low levels. Other examples of reductions in energy intensity include the development of new lightweight plastics I mentioned earlier, and higher efficiency fuels and lubricants. Changes in the supply mix and gains in efficiency mean reductions in carbon dioxide per unit of GDP. This all supports economic growth with a smaller environmental impact.
Finally, we need to pursue alternative energy sources that are reliable, scalable, affordable, and sustainable. We need to keep all of our options open. As we search for breakthroughs, we cannot forget the continuing role of oil and hydrocarbon liquids as both an energy source and chemical feedstock. Oil is important because of the lack of affordable alternatives for transportation fuels. This chart is based on data from the IEA. Current global liquid supply is about 95 million oil equivalent barrels per day. The short bar in the center shows the projected reduction in supply over the next 25 years if no further investments are made to offset natural field decline. On the right, the chart shows 87 million barrels of additional supply needed in 2040. Even with more stringent emission policies, which is consistent with the pledges of the Paris Agreement.
This is what they call the new policy scenario. To meet this need, more than $18 trillion worth of investment in oil and gas is required. An even more aggressive scenario, known as IEA 450, sets out a pathway consistent with the goal of limiting temperature increases to two degrees Celsius. Even that would require more than $11 trillion of investment. The point is, trillions of dollars of upstream oil and gas investment is required even under the scenarios that limit carbon emissions to a two-degree pathway. As I said, much of this demand for liquids comes from sectors like commercial transport, industrial uses, chemicals, which have few available alternatives. With this context, let me turn to how we create long-term value for shareholders. As I've discussed, we are striving to meet society's dual challenge.
To that end, we place a priority on the sustainability of our operations and helping consumers minimize their environmental footprint. We become part of the communities where we operate and make long-term investments in infrastructure and services. We continually look for opportunities to high-grade our portfolio of assets and investments. Finally, we pursue next-generation technologies to support and improve all of these efforts. Our success is your success. We have a consistent record of sharing our success with you. This year marks our 35th consecutive year of dividend increases. We've grown our dividend by almost 9% a year over the past decade. That exceeds both the average of the S&P 500 as well as our competitors. We are the only major integrated oil company to announce a dividend increase so far this year, up almost 3%.
We're committed to a reliable and growing dividend over the long term, supplemented by a flexible share buyback program. Since the Exxon and Mobil merger, we've returned more than $370 billion to shareholders
To put this number in some perspective, it's larger than the individual market caps of all but six of the S&P 500. Consistently achieving this level of performance requires that we uphold our core values. That includes our commitment to maintaining operational integrity. Safety is ingrained in our culture and embedded in our processes. However, it's more than a key priority, it's a way of life for our people. I'm particularly proud of the best-ever safety performance achieved last year. It's a testament to the hard work and the dedication of every one of our people. I'd like to pause for a minute and join me in a round of applause to thank the people who work for you, who made this happen. Operational integrity is not just about the safety of our workforce.
It extends to ensuring excellence in project execution, managing security and geopolitical risk, and minimizing our environmental impact. Strong community engagement and a commitment to local development is also an enduring value. Each community has its own unique culture, needs, and sensitivities. We're committed to ensuring we have a positive impact. First and foremost, we engage with governments to support security and respect for human rights. We actively work with stakeholders during project development, incorporating their concerns and feedback. Another way we support our communities is through local employment and supplier development. We also routinely invest in social programs that carefully consider local needs and goals. Our investments center around a variety of local priorities, including our three signature initiatives: improving education, combating malaria, and advancing economic opportunities for women. These efforts support the success of our strategic business investments.
This map shows a perspective of our major project activity across all businesses. We have a diverse portfolio of more than 100 projects in development. From the early stages of concept selection all the way to construction. We selectively invest in projects that add the most value and perform well across a range of economic conditions. We're cutting costs through optimized designs, project synergies, and execution excellence. For example, we've achieved a 30% reduction in near-term upstream project costs compared to last year's plan. In the downstream and chemical businesses, we are increasing our feedstock and logistics flexibility. We focus on getting the highest value out of every molecule and are going volume to special products. We will start up 12 new downstream and chemical projects through 2019. Let me now provide an overview of some of these exciting opportunities.
Our extensive portfolio of tight oil and gas opportunities, also known as unconventionals, include acreage in every major basin in the U.S. We currently produce over 700,000 net oil equivalent barrels per day, mostly from unconventional resources. We are well-positioned for growth. Through a series of acquisitions, we have substantially enhanced our position. This includes an addition of a quarter million net acres in the prolific Delaware Basin, which is part of the Permian. We have an inventory of over 50,000 drilling opportunities across the U.S. This includes a large inventory that performs well in a low-price environment, underpinning near-term production growth. We also continue to increase efficiency through the application of key technologies and best practices. This has enhanced our drilling performance and optimized field development. Our innovative model helps us see all along the entire value chain and provides a distinct advantage.
It enables us to capitalize on opportunities from wellhead to customer, from our upstream through to downstream and chemical. Integration enables us to take full advantage of the growth of U.S. unconventional production. Production growth, coupled with advantaged transportation, has enabled increased crude runs at our three refineries on the Gulf Coast. We've also taken advantage of upstream expertise in the U.S. natural gas market. This informs investment decisions in our chemical facilities on the Gulf Coast. These insights position our unconventional gas portfolio to compete for increased market share of domestic power generation and LNG exports. As conditions change, we adjust our operations to improve returns. This flexibility provides options most of our competitors don't have. Our ability to capture market opportunities across the full value chain gives us a distinct competitive advantage. An example is the integration of our North American downstream and chemical businesses.
It has maximized our ability to process advantaged feedstocks into performance products. This includes premium fuels, lubricants, and chemical products that meet growing demand and enhance profitability. On the U.S. Gulf Coast, we're expanding manufacturing of high-value products. These include plastics used in packaging and cars and synthetic basestocks for roofs. We are improving logistics capabilities by focusing on strategic transportation assets. Last year, we formed a joint venture to move domestic crude oil to refineries in Texas and Louisiana. Overall, investments in major chemical, refining, lubricant, and LNG projects along the Gulf Coast are expected to total more than $20 billion. They're also expected to create about 35,000 construction jobs and 12,000 permanent jobs. These investments are creating value and growing the Gulf. Outside the United States, one of our recent success stories is offshore Guyana. Our imaging technology supported a successful exploration program we believe has high potential.
We had discoveries at three oil fields and have identified more than a billion and a half barrels of recoverable oil and gas. As a result, we're accelerating initial development at the Liza field, which has the potential to produce up to 120,000 barrels a day. Startup of phase 1 is anticipated by 2020, fewer than five years after initial discovery. Another key international project, our Papua New Guinea LNG development, demonstrates Exxon Mobil's project and operational excellence. The project has consistently produced 20% above its original capacity, now in excess of 8 million tons per year. We're evaluating a capital-efficient expansion at the existing site. This will take advantage of several discovered resources in the area, including the Elk Antelope field, which was part of the recent InterOil acquisition. We also continue to actively explore other areas of PNG, as highlighted by the recent Muruk discovery.
As we grow our business in PNG, we continue to invest in social programs that provide community benefits and protect the environment. Our LNG development provides significant advantages to the people of Papua New Guinea and to the company. It is well-positioned for growth. In Africa, we recently announced we agreed to acquire a 25% interest in a world-class resource offshore Mozambique. The deepwater Area Four block is estimated to contain more than 85 trillion cubic feet of natural gas. This is expected to support a large-scale LNG project. Exxon Mobil will lead construction and operations of the onshore facility. This includes liquefaction trains with capacity of up to 40 million tons per year, almost six times the size of the initial PNG LNG project. Our experience in PNG will help ensure that Mozambique is a success.
They share important similarities, including the fact that both are complex developments in remote areas. We are also evaluating three exploration blocks to the south of Area Four, where seismic activities are progressing. A common denominator across all of our successful investments is technology. It is also key to supplying the world's energy needs while mitigating the risk of climate change. Our past success has been underpinned by our commitment to developing new technologies. The same will be true of our future success. We remain committed to fundamental science that is the foundation for new energy and environmental solutions. Our goal is to develop sustainable, scalable solutions that drive long-term shareholder and societal value. This commitment is demonstrated by a longstanding and focused research program of approximately $1 billion a year, which we will maintain across the price cycles.
Our research addresses both components of the dual challenge: improving existing supply options and managing carbon intensity. Research programs to improve profitability are having impacts today. They are delivering value through high-performance computing, advanced motor oils and plastics, and improved drilling techniques. Dedicated research programs are pursuing lower emissions innovations. We are advancing breakthrough technologies in carbon capture and storage, process intensification, and second-generation biofuels. In a few minutes, we will share a deeper look at some of these programs in a technology spotlight. In addition to our own research efforts, we partner with more than 80 universities around the world to explore potential breakthroughs, like at Georgia Tech, where we have developed a form of reverse osmosis to reduce the energy required to separate hydrocarbon molecules, or at Stanford, where we are looking at a variety of technologies as part of our global climate and energy project.
Our proven technology leadership has been a cornerstone of our past success, and I am confident we will continue to provide solutions for the future. Let me sum up by saying that we are focused on and working hard to deliver value for you, our shareholders, and value for society. We do this by helping to meet the dual challenge. That is what we are about. Technology is the foundation of our business, and it is critical to our success. We apply our technology across a broad portfolio of attractive opportunities. We apply the talents of our workforce, we leverage our financial and operating strengths, and take full advantage of our integration. As we develop projects, we remain committed to disciplined investing, growing our financial strength. This has served us well, and it has served all of you well.
It's enabled us to succeed through the ups and downs of the price cycle, and it positions us to continue to succeed. With that, I'd like to invite Dr. Vijay Swarup, our Vice President for Research and Development, to join me on stage. I provided you with a high-level perspective on the importance of and our commitment to technology. Vijay is going to do a deeper dive into a few of our most exciting fields of research. Vijay, it's over to you.
Well, thanks, Darren. It really is an honor and a privilege to be here today to talk about the research that we're doing at ExxonMobil. Our technology capability has enabled long-term success for the corporation. We have a fundamental research program aimed at providing affordable and reliable energy for society, which will continue to underpin the research required to meet the dual challenge of delivering affordable and reliable energy while addressing the risks of climate change. This is a technical industry, and I'm proud to say that we've been at the forefront of many of the technologies that have allowed energy to be delivered in a safe, affordable, scalable, reliable, and sustainable manner, improving the lives of society. This chart shows just a subset of these technologies. The very things we are doing routinely today to supply the safe and affordable energy were unimaginable at the beginning of this industry.
In the 1940s, we developed the process to make high-octane fuels and synthetic tires, which were critical components in winning World War II. In the 1950s, we used then state-of-the-art computers to simulate reservoirs to more efficiently and effectively produce oil. We also produced the first synthetic catalyst to make high-octane fuels. This was the genesis of several innovations that continue through today. In the '60s and '70s, we brought plastics and Mobil 1. Both continue to improve the lives and productivity of society. We pioneered the fundamental science which enabled the lithium-ion battery, still the leading battery technology today, and we were also pioneers of low sulfur fuels, greatly improving air quality. Completed in 2000, the Hoover Diana platform in the Gulf of Mexico achieved many world and industry firsts, including setting a world water depth record for a floating drilling and production platform with subsea tiebacks.
We continue to develop specialty plastics that can provide tougher and thinner packaging films, reducing waste and energy. Today's computers have allowed us to set a record for the number of processors used in modeling a reservoir, and we now have annual production of Mobil 1. Projects I've mentioned over the next 10 years will utilize state-of-the-art computing as well as several new catalysts and processing configurations that will lead to more effective and efficient production of oil and gas, fuel, and chemicals. We know new technologies will be needed in the future to meet the increased demand, and we need to do this in a way to manage CO2 emissions. This will require new technologies today and tomorrow. Let me talk about how we approach this challenge. Our long-term approach integrates the five drivers shown in the chart. We must continue to pursue routes to improve efficiency.
We need to do that today by using cleaner-burning natural gas for power and lighter and tougher plastics for packaging. We continue to advocate for the integration of science and policy. For decades, we have provided technical depth and insights to complex energy issues, including climate change and the safe use of fuels and chemicals. We mention the need to increase supply, we continue to work on more efficient processes to produce energy and develop fuels and chemicals. We have a long-term biofuels program, which I'll describe in a few moments. We recognize that there's a growing middle class in developing nations, and the way they receive power and the types of fuels they require may be different to what has been used in developed nations.
Understanding the synergy between distributed power and the large-scale power needed for urbanization, as well as the future requirements for efficient fuels, are central to our long-range research. Finally, mitigating emissions research ranges from continuing to lower emissions from existing facilities to carbon capture and storage, which will likely be needed in the future. We've chosen areas in our capabilities wheelhouse to address these challenges, we take a portfolio approach to each of these areas, meaning we have several research programs in each focus area. In all of these areas, we have exciting programs that are still likely decades away from large-scale deployment, but we know from our past that we need to be working on those technologies today to be ready for tomorrow. I'd like to briefly describe three of these technologies. First, let's address the very nature of our industry.
It requires energy and high capital infrastructure to produce fuels and chemicals. While we've advanced catalysts and process configurations, we still use high pressure and temperature. We're looking at the process blocks, separation, and chemical conversion reactions, challenging ourselves to do this differently. Why use higher temperature when membranes or specialized filters can do separations with much lower energy use? Learning from adjacent industries like water purification and working with leading institutions like Georgia Tech, we're developing membranes that can separate chemical building blocks with much lower temperatures, which could have significant reduction in emissions. We're also looking at conversion where today we use large reactors to perform the chemistry needed to produce. Here we're researching process intensification steps, essentially doing more with less energy, less capital, and a smaller footprint. Again, learning from adjacent industries to develop modular solutions and working with universities like Purdue.
We have a portfolio of programs in this area. Separations and conversions will always be core to producing large-scale fuels and chemicals. We're working on transformative solutions for future deployment, which will be critical to the growing middle class and meeting the needs of society. Just to describe the potential, at the bench scale, we've demonstrated chemical separations that could result in up to a 25% reduction in CO2 emissions. Now, imagine if we could do that with similar technologies for large-scale fuels production. It could be nearly 50% reduction in CO2 emissions. That's big, that's why we're working on this. Longer term, wide-scale carbon capture will be required to curb carbon emissions. We're leaders in carbon capture and storage, and today we capture and store one-fourth of the world's total captured CO2.
We know the process is complex, costly, and requires additional power, sometimes up to 20% additional power, to capture the CO2. We ask why not capture the CO2 and produce the energy? To do this, it'll require new materials and new processes right in our area of expertise. Think of that, concentrating CO2 while generating power. That really is transformative. Once again, we are working with partners here, and we're working with companies like FuelCell Energy and TDA, as well as leading research institutes like the Netherlands ECN and leading universities like UC Berkeley to develop materials and process configurations. The schematic shown on the chart is that of using a fuel cell to concentrate the carbon dioxide from a natural gas turbine while generating power.
The natural gas turbine is a good place to start as it uses natural gas, which is a cleaner burning fuel, both in terms of CO2 produced and other impurities that need to be removed before sequestration. We signed a research agreement with FuelCell Energy last year, and we're working hard to understand the fundamentals with an eye towards longer-term, large-scale deployment. The process works in the lab, and we're progressing a process demonstration unit in Alabama to further assess this technology. We're also working on other novel materials and processes to concentrate CO2. This is hard, we're committed to the research for the long term, and we continue to look for additional ideas to add to our portfolio. Finally, I'd like to address transportation fuels. Transportation fuels, particularly for trucks and airplanes, will continue to require a high energy density liquid fuel.
Biofuels have the potential to provide the energy density required, scale and cost have been challenges. We've been researching biofuels for a long time, and we are making progress. Today, biofuels are made largely from food sources such as corn and sugarcane in a relatively small scale. We're challenging that paradigm, targeting large-scale biofuel production that does not compete for food and water. Algae are fast growing, can grow in brackish water, and absorb CO2. Let's not use the crop. Let's use the crop residue, called cellulose, to generate the fuel. Working with universities like Michigan State and Colorado School of Mines, as well as companies like Synthetic Genomics and Renewable Energy Group, we're making progress in both algae-based and cellulosic fuels. Still decades away from the scale we need, fundamentals are driving our research, and recent results are driving our enthusiasm.
The energy industry has gone through several transitions, all underpinned by technology developments. We face the challenge of meeting the needs of a growing population while mitigating the risk of climate change. The only way to solve this challenge is through technology. We need new options and new solutions. We've been developing and deploying game-changing technologies to industry for more than 130 years. In fact, since 1950, we've been granted over 29,000 patents. Our constancy approach to R&D is unique, and we remain committed to fundamental research. We have a broad low emissions R&D portfolio with the flexibility to drive into a particular program area when it looks promising. We realize that we cannot address this alone. We've been significantly increasing our collaborations and partnerships over the past few years, and we continue to look for partners that can complement our capabilities to address these challenges.
Our people are key, and we have a highly skilled workforce with over 2,000 PhDs in engineering and science disciplines. We've been at the center of technology developments in this industry in the past, and while we do not know exactly what technologies will be required over the next 130 years, I have no doubt that we'll be at the center of the technology development and deployment. Thank you very much for your time.
Thank you, Vijay. Now I'd like to share with you a TV spot that highlights our investment program in the Gulf.
Hey. Ho. It's also where we go.
On the Gulf Coast, new Exxon Mobil projects are expected to create over 45,000 jobs, and each job created by the energy industry supports two others in the community. Altogether, the industry supports over nine million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing millions of emissions. Energy lives here.
Now we turn to the formal business of the meeting. We recognize that the majority of our shareholders have voted by proxy and are not present. We have established procedures to facilitate an orderly meeting. We have 13 items to consider. Proposals will be presented in the order they appear in the proxy statement. The first item of business is the election of 11 directors. I nominate the 11 persons identified in the proxy statement. These 11 people are highly qualified to serve on the board. All of our nominees are currently serving as ExxonMobil directors. Now I'd like to ask the nominees seated to my right in the orchestra terrace to stand as their names are called, and then I will close the nominations. Susan Avery. Angela Braly. Ursula Burns. Henrietta H. Fore. Kenneth Frazier. Douglas Oberhelman. Sam Palmisano. Steve Reinemund. William Weldon. Michael Boskin. Thank you.
I also want to take this opportunity to recognize two of our directors who are retiring and will not stand for re-election. Dr. Larry Faulkner, who has served on our board for 9 years, and Peter Brabeck-Letmathe, who has been on the board for 7 years. Please join me in expressing our appreciation for their leadership. Thank you. I now declare the polls open for all who want to vote in the election of the directors and 12 remaining items. If you wish to change your proxy instructions on the election of directors or any of the other 12 items, or if you have not submitted a proxy and wish to vote by ballot, they are available from the ushers. Please raise your hand if you would like a ballot at any time during the formal business. It'll be collected after all items have been introduced.
The next item on the agenda is the ratification of PricewaterhouseCoopers as the independent auditors. The board's audit committee has appointed PricewaterhouseCoopers to audit ExxonMobil's financial statements for 2017. We are asking shareholders to ratify that appointment. PricewaterhouseCoopers is represented today by Mr. Tom Smith. Tom, would you please stand? Thank you. The audit committee's reason for recommending PricewaterhouseCoopers appears in the proxy statement. I move the adoption of the proposal. The next order of business is consideration of two board-sponsored proposals regarding executive compensation. The next board proposal calls for a shareholder advisory vote to approve executive compensation as required by law. The board recommends a vote for this proposal. Moving on to resolution number 4, the board proposal calls for a shareholder advisory vote on the frequency of future advisory votes on executive compensation. The options are to hold a vote every one, two, or three years.
The board recommends that the vote be held every year. The next order of business is the consideration of the 9 shareholder proposals in the proxy statement. Before we begin, I'd like to make some general comments. First, we welcome, appreciate, and actively promote shareholder engagement. Last year, for example, we engaged with shareholders holding about a quarter of all outstanding shares. And we're on track to exceed that number this year. With respect to the 9 proposals under consideration today, it's important to note that they do not represent all the feedback we've received in the last year. On a number of occasions, where shareholders brought forward proposals, we met and reached agreement. As a result, their proposals are not included in the voting today. In other words, today's proposals only represent areas where we could not reach agreement, and therefore, are being put to a shareholder vote.
For most of these, we agree with the underlying objective or intent. However, we disagree with how best to achieve that objective. Finally, we thank the shareholders presenting proposals. We may not agree on the most effective way to achieve our business objectives, but hopefully, we can agree that a constructive dialogue and exchange of views is beneficial. With that, let's turn to the 9 proposals. For those following along, details can be found in the proxy statement. First shareholder proposal calls for an independent chairman. I understand that Craig Rhines will present the proposal.
Good morning, Mr. Chairman.
Secretary and members of the board, I'm Craig Rhine, investment officer with CalPERS. We are the largest public pension fund in the U.S. with over $300 billion in assets under management, and we own about $11.4 million shares in ExxonMobil. I'm here to present proposal number five filed by the Only [Hills] Trust, requesting that the separation of positions of chair and CEO. This resolution is not a criticism of our new CEO or of ExxonMobil. It is a request of only considered to be governance best practice, and proposals that the policy of a separate independent chair be phased in when a new CEO is next chosen in the future. Separating the positions of chair and CEO provides another layer of checks and balances and could improve the board's ability to oversee the activities of the company. It's widely recognized that chairing the board is a time-intensive job.
A separate chair also frees time for the CEO to focus on running the company and building effective business strategies. The shareholders we ask for your vote today on proposal number five. Thank you.
Thank you, Craig. In response to this proposal, let me share with you the board's perspective. We agree that a strong independent board is important and that the board is responsible for the oversight of management, including the CEO. We also believe the board must retain flexibility in determining a leadership structure that best serves the interest of shareholders. The board believes the current structure best serves these long-term interests. In fact, the position of presiding director, which has been in place since 2008, provides effective independent leadership. He or she has the authority to call, chair, and set the agenda of the board's executive sessions. Also, the board's Compensation Committee, comprised entirely of independent directors, reviews CEO performance and establishes the CEO's compensation. The board Compensation Committee reviews its assessment with the full board without the CEO present.
In summary, the board believes it exercises appropriate oversight with sufficient independence. It therefore recommends shareholders vote against this proposal. The next shareholder proposal calls for director nominees to be elected by majority vote. I understand that Calvin Griffin will present the proposal.
Thank you, Mr. Chairman. I am Calvin Griffin, representing the Southwest Regional Council Partners Pension Fund. The Partner Funds are long-term owners that collect a total of 1,623,000 shares of ExxonMobil common stock. We welcome the opportunity to again introduce our majority vote shareholder proposal that advances important corporate governance reforms. The Partners appreciate the open and constructive dialogue, which we have maintained with ExxonMobil representatives over many years on important corporate governance and executive compensation issues, including majority voting. Our majority vote proposal encourages the ExxonMobil board of directors to adopt a majority vote standard for director elections. Despite the board's opposition to majority vote proposals, it received a 46% favorable vote at its 2014 annual meeting. A majority vote standard yields in uncontested direct elections provides shareholders meaningful voting rights.
The combination of the majority vote standard with current director resignation policy will establish a strong director election standard. The resignation policy provides the board a post-election process in which to exercise judgment and make decisions on the continued status of any unelected director. Over 94% of America's largest corporations and all of ExxonMobil's peer companies have adopted majority vote standards and resignation policy. ExxonMobil remains the largest American company that has not adopted majority voting. We urge the ExxonMobil board to establish a majority vote standard and join the mainstream of American corporations on this important governance reform. Thank you, Mr. Chairman.
Thank you, Calvin. Thank you for your perspective, and thank you for the ownership. We agree that directors who serve on public boards should have the support of a majority of shareholders. We share the same objectives as proponents of this proposal, but we believe the policy we already have in place achieves that objective. The board previously adopted a policy requiring a director to tender his or her resignation if he or she does not receive a majority of votes cast. The board will accept the resignation absent a compelling reason. Coupled with the current plurality vote standard, this policy yields the same outcome as a majority vote standard. In other words, our current approach achieves the same result. The board therefore recommends shareholders vote against this proposal. The next shareholder proposal calls for special shareholder meetings. I understand that Natasha Lamb presents the proposal.
Good morning, Mr. Chairman.
Good morning.
Mr. Secretary, members of the board, and fellow shareholders. I'm speaking on behalf of Kenneth Steiner of Great Neck, New York. He's item seven on special shareholder meetings.
Resolves share owners ask our board to take such steps necessary to amend our bylaws and each appropriate governing document to give holders in the aggregate of 15% of our outstanding common stock the power to call a special shareholder meeting. This proposal does not impact our board's current power to call a special meeting. Dozens of Fortune 500 companies allow 10% of shares to call special meetings. This proposal is only asking that 15% of our shares be able to call a special meeting. Special meetings allow shareholders to vote on important matters, such as electing new directors that can otherwise between annual meetings. Shareholder input on the timing of shareholder meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This is important because there could be 15 months or more between annual meetings.
Shareholders should not be forced to go to court to call a special meeting as our entrenched management suggests. Please vote to enhance shareholder value on Proposal 7, special shareholder meeting. Thank you.
Thank you, Natasha. As you said, we agree that shareholders should have a meaningful right to call a special meeting. In fact, this right is already provided for in New Jersey, where we are incorporated. The law requires stock holdings of 10% and a show of good cause. We believe these requirements are prudent. They provide protection against the potential for abuse. We also believe the requirement for good cause is critical. It's worth noting that the board has done nothing to restrict this right. Therefore, the board recommends shareholders vote against this proposal. The next shareholder proposal concerns the restriction of precatory proposals. I understand that Steve Milloy will present the proposal.
My fellow shareholders, we are being squeezed at Exxon. On one side are anti-capitalist climate activists, some of whom are pretending to be bona fide shareholders. Their goal is to hijack Exxon's resources and influence to advance their anti-capitalist, anti-America political agenda. They want to destroy Exxon and the value of our stock. On the other side of the squeeze, oddly enough, is Exxon management. For the first time, we have an American president who actively opposes climate hysteria. He promised to put America on a Paris Agreement. He wants to unleash the American energy industry. What has Exxon management done? They want America to stay in the economical suicidal Paris Agreement. Exxon management supports a carbon tax, a policy designed to slash oil and gas use. Management deals with [inaudible] who are doing a criminal investigation on a couple of our state attorneys general.
Fellow shareholders, between climate activists and dismal management, it's difficult to choose which is the greater threat to honest shareholders. Keep in mind the lessons of coal industry. President Obama used climate hysteria to drive America's coal companies into bankruptcy. Peabody Energy, the world's largest coal company, just emerged from bankruptcy in April. The entire time Peabody was in bankruptcy, it was still producing the coal fueling American electricity generation. Even so, when Peabody emerged from bankruptcy, its shareholders like you and me, were zeroed out. Their shares became worthless. What's the lesson? Well, American-made coal didn't need Peabody shareholders. Oil and real world oil, it doesn't need Exxon shareholders.
My fellow shareholders, we can defeat the activists as they hype the climate hoax, lobby governments for anti-U.S. policies, force investment funds to divest from Exxon, campaign to stop oil production, and pressure regulators to force companies to write down their reserves. A handful of oil's largest and finest anti-capitalists activists for decades. Our efforts helped elect a president who knows climate hysteria is unfounded and who wants the oil industry to thrive. We can beat the activists. What do we do about management's betrayal? My message to Exxon management is this: stop aiding and abetting the enemy of your shareholders. Start working for us or start looking for work elsewhere. Thank you.
Thank you, Steve. Appreciate your impassioned presentation of the proposal. There are some interesting elements of your proposal that we share and agree with. However, we worry that it could limit the rights of shareholders to submit meaningful proposals that are important for all shareholders to consider. Having said this, the board believes direct shareholder engagement is a much more effective approach. We have a strong process that enables shareholders to dialogue with the company in an open and comprehensive manner. The board therefore recommends shareholders vote against this proposal. The next shareholder proposal calls for a report on compensation for women. I understand that Eve Spunt will present this proposal.
Thank you, yes. My name is Spunt, and I'm standing here today because little progress has been made in narrowing the gender pay gap in over a quarter of a century. I have no doubt that Exxon Mobil is well-intentioned in its efforts to identify and aggressively promote a few outstanding women, but the rest lag considerably behind. Total compensation, not titles or job categories, is the best way to keep score. Numerous studies in which the gender of the name on resumes is switched from male to female have demonstrated the damage done by unconscious bias. Both men and women tend to judge women more harshly and offer them lower pay. Exxon Mobil has a highly structured performance appraisal system, but it is partially subjective and can still be biased. If the data I have requested is released annually, it will allow shareholders and the public to monitor progress.
I think that not only ExxonMobil, but all employers of more than 1,000 people should be required to divulge this information. We need greater gender pay transparency. What gets publicly reported gets attention and action. Public reporting drives improvement. My dream is that my granddaughters, the oldest now in kindergarten, will have a chance for equal pay when they join the workforce. Please vote yes for proposal nine. Thank you.
Thank you, Eve. First and foremost, let me be absolutely clear. We agree that ExxonMobil should foster an enabling, non-discriminatory environment for all employees. We value diversities, including gender diversity. Eve, I will commit to you if your granddaughters come to work for ExxonMobil, they will be paid fairly. In discussing compensation, it's important to consider it in the broader context of development. Within ExxonMobil, compensation, development, and advancements are highly integrated. Our program compensates individuals based on their performance, experience, and pay grade, regardless of gender. Regardless of gender. Given this, our focus is on progressing the development and advancement of women. Within the executive employee population, which has on average more than 20 years experience, almost 20% are women. That's an increase of 50% over the past decade. We expect this percentage to continue to increase as recent hires gain the necessary skills and experience.
Notably, today, about a third of our early career executive employees are women. We share these development metrics in our citizenship report, and therefore, the board believes a report called for in the proposal is unnecessary. The board recommends shareholders vote against this proposal. The next shareholder proposal calls for a report on lobbying. I understand that Ricky Brooks will present the proposal.
Fellow shareholders and members of the board, my name is Ricky Brooks. I'm an 18-year employee at ExxonMobil in the Baytown refinery. On behalf of the United Steelworkers and the 13 co-filers, I'm here to talk more about our team, the shareholder proposal asking our company to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations and support of the American Legislative Exchange Council. Illustrating the deep international concern about lobbying, AP7, a Swedish pension fund, and APG Asset Management from the Netherlands, are co-filers this year. Transparency and accountability in corporate spending to influence public policy are the best interests of ExxonMobil shareholders. Corporations contribute millions of dollars to trade associations that lobby indirectly on their behalf without specific disclosure or accountability. ExxonMobil does not disclose its trade association memberships nor the portions of these payments used for lobbying.
Shareholders currently have no way to know how much of ExxonMobil's trade association contributions are being used for lobbying on its behalf. ExxonMobil also contributes to tax and think organizations that broadly endorse lobbying legislation, playing a key role in the controversial American Legislative Exchange Council, better known as ALEC. ALEC has attracted negative attention for its role in promoting bills on anti-immigration policies and blocking various EPA regulations. ALEC also promotes legislation that seeks to diminish workers' rights in our country. As a representative and proud member of the United Steelworkers Union, we find many of ALEC's proposals to be very troublesome. This is one of the reasons we are seeking full disclosure on our company's lobbying. Our company's argument against our team suggests shareholders can use government websites to get this information.
Publicly available data does not provide a complete picture of ExxonMobil's lobbying expenditures nor is it easy to access. We ask the shareholders to vote for this proposal to mandate our company supply the necessary report.
Thank you, Ricky. Thanks for presenting, and thanks for the years of service at Baytown. It's a great organization. ExxonMobil supports accountability and appropriate transparency in disclosure of lobbying. We believe that our compliance with existing federal and state disclosure requirements achieves this objective. ExxonMobil complies not only with the letter but also with the spirit of all federal and state requirements. This includes quarterly reports to Congress on our federal lobbying expenses and the specific issues on which we lobby. We also go beyond these requirements and make our recently filed reports, as well as the company's positions on key public issues, available on our website. As a brief aside, let me say a few words about the American Legislative Exchange Council, or ALEC. We've received some feedback on our support for this group.
It's important to note that ALEC is an association of more than 2,000. Like you, it's highly unlikely that we would agree on every position they take. That doesn't mean we shouldn't engage on the variety of state-based issues that are important to a company of our size. We engage on multiple fronts with a diversity of groups, even when we don't agree on everything. Some here today are in the same position. You may not agree with every approach we take, but you probably do agree there's benefit to continued engagement. In fact, on two occasions, ALEC has provided a venue for us to communicate our position on climate and a carbon tax to all his membership. That wouldn't have happened. It wouldn't have been possible if we had discontinued our modest level of support, which we do disclose on our website.
To summarize, the board believes that existing disclosures are adequate and therefore recommends you vote against this proposal. The next proposal calls for a commitment to increase the total amount authorized for capital distributions. I understand that Natasha Lamb will present this proposal as well.
Good morning. My name is Natasha Lamb. I am here on behalf of Archie MacRae and other shareholders' clients holding the interest in proposal 11, which asks our company to prioritize profitability and value over growth by returning more capital to shareholders. We ask this in light of increasing risk investments in potentially stranded carbon assets. That is, carbon assets we can't burn without irreversible climate destruction. Implementing this proposal would represent a prudent, albeit difficult, path forward in the face of unburnable carbon assets, which represent approximately two-thirds of proven global reserves. These reserves cannot be burned under the Paris Agreement established by 196 countries to prevent a less than two degrees Celsius rise over the temperature growth we've observed. Market forces, including energy efficiency, the rise of electric vehicles, and biochemicals, will also reduce demand.
While it is clear that extracting as much carbon as quickly as possible was the winner last century, that same thing will destroy value this century and already has. Historic levels of capital spent on growth assets has eroded profitability and Exxon's risk profile. Return on equity and return on invested capital are at historic lows. Operating profitability has fallen 97% over the last decade, and Exxon's sterling credit rating has been downgraded, increasing the company's cost of capital. Continuing to grow high-cost fossil fuel reserves in the face of global climate change, disruptive technology development, and the Paris Agreement is no longer prudent. CDP estimates unburnable fossil fuel reserves could amount to over $100 trillion out to 2050. While the Carbon Tracker Initiative estimates if oil majors chose to undertake projects consistent with a two-degree demand level, combined upstream assets could actually be worth $140 billion more.
We are asking our company to prioritize value over growth. Investing in the most profitable core carbon assets and returning a greater percentage of profits to shareholders would allow Exxon to decrease in size while increasing profitability, essentially shifting their business plan of growth for growth's sake to one of value. To the opposite end, profitability has increased while total capital distributions have fallen 56% over the last four years and fallen 35% since 2015 and 17% since 2016. That includes share buybacks and dividends, total capital distributions. I urge shareholders, management, and the board to fully consider this strategically important issue at this critical juncture. Thank you.
Thank you, Natasha. The board agrees with proponents that the risk of climate change is important to our business, but we do not agree with this approach. This approach seeks to limit investment needed to meet growing energy demand. Forecasts by reputable third parties, such as the International Energy Agency, show substantial upstream investments of more than $11 trillion will be required through 2040. That's true even under the two-degree scenario. As part of our disciplined investing approach, we require all of our businesses to estimate, where appropriate, the cost associated with greenhouse gas emissions when seeking funding for capital investments. Overall, our disciplined capital approach has enabled us to maintain focus on a range of opportunities, including investments in low-emissions technologies. As I mentioned earlier, this approach has consistently positioned ExxonMobil as an industry leader in long-term return on capital.
We've increased our dividends for 35 consecutive years, and the company returned over $370 billion to shareholders since the merger. Given this, the board recommends shareholders vote against the proposal. The next shareholder proposal calls for a report on the impacts of climate change policies. I understand that Edward Mason will present the proposal.
My name is Edward Mason from the Church Commissioners for England and Wales, the Church of England's endowments. At this meeting last year, I proposed a resolution asking Exxon Mobil to undertake and disclose climate change scenario analysis. 48% of shareholders voted for the proposal. I did not expect to be here again this year proposing the same proposal, this time flanked by investors with $5 trillion of assets under management. Since last year's vote, we've engaged with Exxon Mobil executives alongside other institutional investors. We hoped to reach agreement on the enhanced climate-related disclosure that shareholders called for. Executives would not agree to additional meaningful disclosure. Shareholders' right to meet with only several directors has continued to be rebuffed. Members of the board, in your other roles, you have made clear that you recognize the significance of the agreed international goals on climate change.
As firms, when you were chief executives, various signed the [inaudible] Mr. Craighead, Exxon's climate change position statement says, "We are supportive of science-based international and national actions to address the challenges presented by climate change." Mr. Weldon, as chairman and chief executive of Johnson & Johnson, you advocated a cap-and-trade system for advanced greenhouse gas emissions. Mr. Allison, the Financial Times reported you telling a conference in 2014, "Clearer climate science was telling us to get off fossil fuels," as Financial Times reported. Members of the board, do you make your understanding of climate change as a board when you attend Exxon Mobil board meetings? Exxon Mobil said in its 2014 climate risk report to shareholders that two degrees is not a scenario worth considering, and instead quotes you materials that are still higher than two degrees. You disagree with this position.
Governments who have signed and ratified the Paris Agreement don't agree. The Financial Stability Board doesn't agree. Exxon Mobil's industry peers don't agree. And most importantly, shareholders don't agree. It is the fiduciary duty of investors to ask for proper assurance of Exxon Mobil's management of the risk and opportunities presented by the transition to a low-carbon economy. It is your fiduciary duty as directors to provide it.
Thank you, Edward. Appreciate your perspective. Let me also say I appreciate the opportunity to discuss this issue. It's an important one and a concern of many of our shareholders and the general public. We believe the risks of climate change are serious and warrant action, thoughtful action. As a company, we're taking action in many ways, including investing in technologies that address this challenge. Governments are taking action, too, through policies such as those envisioned by the Paris Agreement. The board agrees that it's important to reflect both policy and technological developments in our long-term projections. Furthermore, it's important that we reflect these projections in our company strategies and plans. We do. One of our most important planning tools, our outlook for energy, seeks to identify the potential impact of climate-related policies. It uses a proxy cost of carbon to estimate potential impacts.
It's worth noting that the carbon reductions in our outlook are consistent with the pledges in the Paris Agreement. Our outlook assumes increasingly stringent climate policy. At the same time, it assumes growing energy demand through 2040, including substantial demand for oil and gas. That's consistent with the IEA and other third-party forecasts. In addition to our outlook, we also consider a wide range of factors in our planning and investment process. For example, as I previously mentioned, all of our businesses are required to include, where appropriate, an estimate of the cost associated with greenhouse gas emissions. This process addresses climate-related risk and ensures delivery of long-term shareholder value. Based on this approach, we're confident in the commercial viability of our portfolio.
There's a lot more discussion on this issue in the proxy statement, in two reports that we published that I encourage you to read, one called Energy and Carbon: Managing the Risks, and a new brochure called the Energy and Carbon Summary. Our outlook for energy is a good resource as well. The board believes the company has adequately assessed the potential impacts of future policy developments and has broadly shared this through the documents just referenced. As such, the board is recommending you vote against this proposal. The final shareholder proposal calls for a report on methane emissions. I understand it's Sister Patricia Daly who will present the proposal.
For me-
Good morning
Thank you for your attention, we share the welcome of this board of directors. I think shareholders who are here, who have said congratulations on your first meeting, so thank you. I am very, very glad you could be here and to be part of a corporation that's incredible, responsible, and important.
My name is Patricia Daly . I am a Sister of St. Dominic o f Caldwell, New Jersey. I've been here at ExxonMobil for over 20 years now. This year, my congregation and over 30 some odd leading institutional investors that we've been working with on building this joint with the Church of England and New York State to [inaudible ] resolution today. There are over 50 institutional investors who have supported this. I am conscious that you included in your report to us the slides mainly on the development of people and how oil and gas, this sector has really brought about people's development and explored. We also believe there is an incredible moral imperative to bring energy to people who live in energy poverty.
To move into that future without greenhouse gas emissions, which is why I am happy to also share the resolution on behalf of my colleagues at the Park Foundation, dealing with another greenhouse gas emission at risk. A recent study found that methane emissions from oil and gas are 20%-60% higher than previously reported. In fact, the IEA data on upstream oil and gas production is one of the four key mitigation opportunities to keep warming below two degrees. As a result, public scoping of methane emissions approach and including its production has increased dramatically. Methane emissions have an impact 87 times higher than carbon over a 20-year period due to the powerful global warming potential. As little as a 2% during the production and transmission chain can make natural gas more carbon intensive than even coal.
This is significant because natural gas is often marketed as a bridge fuel. [inaudible] and some of our own companies have increased investments in gas. We also expect them to demonstrate to shareholders that it is taking action to reduce this methane risk rather than providing obscure and general statements about their production. The importance of this disclosure, I'm conscious of the time, so we're asking that this disclosure will be attended to just as you also attend to your carbon emissions disclosure. Thank you very, very much for your time in advance.
Thank you, Sister Pat. Welcome back. Nice to see you again. We share your concern. The board believes methane merits particular attention due to potential impacts on climate change. We've been focused on methane emissions for some time. For more than 10 years, we have reported our performance on annual methane emissions and discussed our ongoing efforts to minimize them. As the company seeks to reduce emissions from unconventional resource development, including hydraulic fracturing, through a mix of voluntary and regulatory actions. We're also working with government agencies, universities, and NGOs to better understand the potential magnitude and characteristics of methane emissions. Our partners include the Environmental Defense Fund, University of Texas, Stanford University, and the U.S. Department of Energy. We discuss these activities in our annual citizenship report and in our report, Unconventional Resource Development: Managing the Risks. Both can be found on our company website.
Given this, the board recommends shareholders vote against this proposal. All items of business have now been introduced. If any of you have proxy cards, please hand them to the ushers at this time. Those who have already returned their proxy cards need not vote by ballot unless they wish to change their votes. If you would like to change your votes, simply mark the appropriate sections of the ballot. The ballots will now be collected and turned over to the inspectors of election to be counted. If you wish your ballot to be kept secret, the usher will provide you with an envelope. The appointed proxies in attendance today hereby cast all votes which we have been authorized to cast in accordance with the instructions indicated on the individual proxy cards. If you have proxies, please pass them to the ushers in the aisle.
Okay, since proxies and ballots have been collected, I now declare the polls closed. Since you've all been sitting for a while, I invite any of you that want to stand and stretch your legs for a minute. For those of you who wish to address the meeting in the discussion period, this will be a good time to move towards one of the reserved seats on the aisles so you'll have ready access to a microphone. Well, I understand the inspectors of election are ready to report the preliminary vote. Can we have your report, please?
Mr. Chairman, at least 3.6 million shares of stock of the corporation have been voted on the 15 items of business discussed at today's meeting. Voting results are expressed as a percentage of total votes cast. According to New Jersey corporate law, abstentions are not votes cast. Subject to final tabulation votes, which should not materially change the results, we report that on average, 93.1% of the votes cast were voting to elect as directors the 11 nominees listed in the proxy statement. On the resolution concerning the ratification of individual officers, approximately 98.2% of the shares voting thereon were voted for, and 1.8% were voted against. On the resolution concerning an advisory vote to approve executive compensation, approximately 68.4% of the shares voting thereon were voted for, and 31.6% were voted against.
On the resolution concerning the frequency of advisory votes on executive compensation, approximately 88.2% of the shares voting thereon were voted for one year, 0.7% were voted for two years, and 11.1% were voted for three years. On the resolution concerning an independent chairman, approximately 38.2% of the shares voting thereon were voted for, and 61.8% were voted against. On the resolution concerning majority vote of directors, approximately 45.7% of the shares voting thereon were voted for, and 54.3% were voted against. On the resolution concerning special shareholder meetings, approximately 40% of the shares voting thereon were voted for, and 60% were voted against. On the resolution to restrict precatory proposals, approximately 1.5% of the shares voting thereon were voted for, and 98.5% were voted against.
On the resolution concerning a report on compensation for women, approximately 7.9% of the shares voting thereon were voted for, and 92.1% were voted against. On the resolution concerning a report on lobbying, approximately 27.6% of the shares voting thereon were voted for, and 72.4% were voted against. On the resolution to increase capital distributions and reduce investments, approximately 3.8% of the shares voting thereon were voted for, and 96.2% were voted against. On the resolution concerning a report on impacts of climate change policies, approximately 62.3% of the shares voting thereon were voted for, and 37.7% were voted against. On the resolution concerning a report on methane emissions, approximately 38.7% of the shares voting thereon were voted for, and 61.3% were voted against. Our written reports will be submitted to the secretary as soon as they are completed.
Thank you. The written report of the inspector of elections will be filed with the minutes of the meeting. Final votes on each of these matters will be available on the ExxonMobil website and filed with the SEC. Let me just say that we greatly respect our shareholders' input and will consider all of your feedback regardless of whether the resolution received a majority of the votes cast. Shareholder resolutions receiving a majority level of support will be reconsidered by the board. This concludes the formal business of today's meeting. I will now open the floor for comments or questions regarding ExxonMobil's business. We've received a number of questions on proxy cards and through our website, and as time permits, we'll try to address some of those questions as well.
If you want to speak, remain seated and raise your speaker identification card to indicate that you want to address the meeting. When recognized, give your completed speaker identification card to the usher. Please stand and begin by stating your name. You may speak up to two minutes while the ushers hold the microphone. Please make your comments as brief as possible so that we can accommodate as many speakers as time allows. We will continue to use a lighting system to help you manage your time. First priority will be given to those who have not yet had an opportunity to speak. I welcome your questions and comments at this time. Gentleman down here. Right.
Good morning, James. Mr. Woods, my question is concerning the Renewable Fuel Standard Act passed in 2007 by Congress, otherwise known as the ethanol mandate. It has become apparent in recent years that the unrealistic numbers in this mandate are not attainable unless the ethanol blend is increased from 10% to 15%. I know our company has resisted that push by the EPA. My question is that still our company's position on this ethanol mandate?
Thank you for the question. I think one of the challenges with that mandate has been that many of the cars on the road today do not warranty fuel that exceeds 10% of ethanol. That has been a significant concern of the company that as we are selling ethanol, the ability for our consumers to buy that fuel and remain confident that their vehicle warranties will not be voided. We have been in active conversations with a number of the agencies to make sure they understand the implications of higher ethanol fuels on the car fleet, and the time that it would take for new cars to advance the plastics and the rubbers that they have in the car so that the ethanol will not degrade the performance of those vehicles. Thank you. Now let us go over here to the man in the blue jacket.
Yes. Hello.
Hi.
Mark Harris, retiree.
Hello.
All right. Question on the chemical business, actually two. In a non-proprietary way, could you discuss the selection of the South Texas site for the new joint venture versus the synergistic site at Mont Belvieu in Baytown? Secondly, with the large investments we've made in Singapore over the last decade, especially in the chemical business, can you discuss in more detail our Asia strategy for the chemical business?
Sure, absolutely. Those are both very important parts of our business. On the venture that we've been in discussions with SABIC, the Saudi chemical company, which is a JV partner in that investment that we're considering. A lot of thought went into how best to support that JV and our partners in defining economic and competitively advantaged location to produce product which will be exported overseas to meet the growing demand for chemical products. As we've looked at what we're doing within ExxonMobil without JVs, our view is that we've got lots of opportunities with our own existing sites, for this JV opportunity, we looked at grassroots sites. The location down near Corpus is, we think, a very advantaged position that allows us to tap into the unconventionals in the upstream, which will allow us to have advantaged feedstock to feed that plant.
It also has great access to logistics to then ship the product out to Asia Pacific. Our view is that site, as we look at it today, and the production from that site will be very competitive with any production anywhere around the world and allow us to serve the growing demand for advanced chemical products in China. With respect to the Singapore plant, we have a very large investment across both our downstream and chemical facilities, a very large integrated site. Recently made an acquisition there to expand our chemical facility, and we see that as a platform for really serving that growing demand all through Asia. You know that's where the highest demand growth is. That's where we see people's standards of living continue to grow, and therefore the demand for chemicals, and particularly our high-performance chemicals, continue to grow.
Our objective is to serve that need out of a very secure, stable base in Singapore and take advantage of the logistics, take advantage of the synergies that we have there at that site, and the scale that we have at that site. We see that as a very advantaged platform for really serving all the Asian demand for many, many years to come. Thank you for your question. The man here with the red.
My name is Sudarshan Singh. I'm a recent retiree of ExxonMobil. In light of the current political environment, what are ExxonMobil's plans to maintain the technology and acres position in the Arctic region of Russia? Thank you.
Russia is a very important market, and we have very large investments there. The areas that we've got today which are impacted by the sanctions are essentially at a standstill. We are complying fully with the sanctions that have been put in place today. All those investments, discussions, and opportunities associated with those investments and discussions are essentially on hold until the government lifts the sanctions, at which time we'll then resume whatever conversations that we were having before the sanctions were put in place. We still have a very large and successful business on the East Coast of Russia on the Sakhalin Island, which has not been impacted by the sanctions, and so continue to do business there. Okay. Thank you for your question. Up here in the front in the blue shirt. Yes.
My name is Sid Harris, and I'm a long-term investor in ExxonMobil stock. Congratulations on the good results you've done over the years.
Thank you.
We're very proud of Rex Tillerson representing us overseas now. My question now has to do with strategy. I wonder whether with the rapid growth of wind energy and the fact that the cost of wind energy seems to be coming down, since we are a major producer of energy. Would it make any sense for ExxonMobil to make a long-term project to become the number one producer of wind energy here in the U.S. and around the world?
Thank you for the question. It's very topical. We have spent quite a bit of time looking not only at our portfolio that exists today, but also opportunities in the alternative energy space. What we tend to look for, what we started with in that assessment is what I will say are the fundamental technologies and the advances that we see in that technology. What we're looking for is where we can bring an advantage to that space, where we can invest in a space where we can add something unique that others aren't doing. In the solar and wind, there's a lot of research going on today, and we've seen a lot of progress in the cost of solar coming down. With the work that's happening today, the patents that are being filed in solar, we expect to see continued progress with solar.
As we compared that with our technology and our resources, we didn't see a lot of value that we could bring on the science side with solar with respect to what's already happening. The same is true with wind. There's some, I think, very interesting and exciting opportunities in the wind space with high altitude wind that we see folks working on. Again, we compared that with our technology skill set and looked for opportunities where we could contribute in that space. Didn't see a lot, and so we didn't feel like with both solar and wind that there was an opportunity for us to invest and bring unique competitive advantage to that space.
Where we've chosen instead to concentrate is to look for expanding that alternative technology set or expanding opportunities to address some of the risk that we talked about today through some more fundamental science, which is in line with our capabilities.
Okay. Thank you.
Let's maybe go back in the back, Sister Pat.
Thank you for your time again. I really rise to thank our company this year. I really believe that we're at a profound moment, that this era will define corporate leadership and corporate social responsibility for a very long time. Over the last few years, Michael Crosby, one of my colleagues, has raised and submitted a resolution asking for climate expertise on our board. I really want to thank you all, thank the board for the nomination of Susan Avery. Many, many thanks for accepting this, Susan, and we really want to commend our company for responding to shareholder input. Secondly, earlier, I think it was in March, I read in the newspaper that Peter Trelenberg, one of our colleagues here at ExxonMobil, wrote to the White House in support of staying in the Paris Agreement.
We organized a phone call with many of our shareholders. Jeff was on that call, Peter was on that call, thanking our company for responding. Subsequently, with additional threats from the White House to leave Paris, we were in communication again, and I want to thank you for your letter to our president in support of staying in the Paris Accord. It's really a critical thing. We operate in over 100 countries. We know how critical that international treaty is. I'm presuming you would write this letter again today given the threats of what we think might be going on at the White House today. Is that right? You'd still write that letter?
Absolutely. That position, I stand by that position.
It's for this reason, I know you have policy moving forward, you've made some statements. We're really very grateful. I see this as critically responsible. Thank you again for your time and all of your time. Thank you.
Thank you, Sister Pat. Yeah, I think the position that we've taken on the Paris pledge is very consistent with the framework we've discussed and the challenge that faces society and some of the charts that I showed. It is a global challenge which requires global participation. We think the advantages of the Paris framework is that it engages and involves communities all around the world, countries all around the world, irrespective of their economic development. It's very important. As you saw in the chart, China is one of the fastest growing, the largest emitter. India's quickly coming up behind that. We're going to need a global solution. A global framework is quite important.
Thanks. Come down front with the tie there. Yep.
Good morning, Mr. Chairman.
Good morning.
I'm William Balfour. Congratulations on your new role. I wish you well.
Thank you.
I'd also like to take a minute and congratulate former Chairman Rex Tillerson on his nomination and appointment as Secretary of State of the United States. We do wish him well as he guides the United States and the world during these difficult and tumultuous times.
As do we.
Mr. Chairman, I'd like to begin with a long-term shareholder that held shares in Exxon and Mobil Oil for nearly 35 years. ExxonMobil's been a very good steward of my assets, and I would expect that to continue under your leadership. My only agenda in owning shares of ExxonMobil is to provide a better and more secure financial life for me and my family. I've spoken at this meeting in prior years, and I make the same statement this year as I have in the past. I recognize the ExxonMobil business line is extremely challenging and volatile. I want to thank all the hardworking men and women in the offices, in the fields, on the well rigs, onshore and offshore, security, wherever they work in the world for their dedication and their hard work.
Everyone that works for ExxonMobil has an important role that does not go unrecognized by the shareholder. Everyone's hard work contributes to the growth and the support of earnings in supporting the dividend. I want you to know the point of the dividend is very important to me and my family. I am, however, concerned that the payout rate has increased exponentially in recent years and is higher than I'd like it to be, but that's your issue to manage. I have an expectation that not only will the dividends continue to be paid quarterly, but will continue to increase annually over the decades to come. That's my expectation of owning the stock. My question, if it stands, is depending on which one one talks to, peak oil may be as near as year 2025, while others have targeted peak oil at 2040 or 2050.
Could you speak to peak oil and the view that ExxonMobil has taken and the impact of peak oil on ExxonMobil?
Sure. Thank you for your question. Also thank you for the recognition of the hard work of the men and women of ExxonMobil. I know they are every day, 24 hours a day, seven days a week, all around the world, doing their best to make sure that they're delivering shareholder value so that we can continue to pay a dividend. We're absolutely committed to doing that consistently. With respect to the demand and the demand situation going out into the future, I think for us in our perspective, if you go back in time and look at the company, there have been periods where there's been oversupply and the market prices have come down and margins have gotten very tight. That's essentially excess supply versus demand.
As you know, in our company, we are very focused on the long term and making sure that we're building a business which is resilient to those price cycles and can operate successfully and be satisfied with the business returns that we're generating in those low points of the cycle, but when supply exceeds demand. If you think about the future going forward and some of the uncertainty around exactly how demand will play itself out, we're experiencing some of that today with the excess production coming out of the unconventionals, supply is exceeding demand. In the future, depending on what happens with demand and how climate policy is formed or what technology is developed, there's a lot of things that will continue to evolve which will impact that. Economies will grow. If that market remains long on supply, we're positioned to do well in that marketplace.
I think one of the advantages and challenges of our business is there are lots of variables that impact the environment that we have to operate in. For a long time, we've stopped trying to predict exactly how each of those variables are going to line up, and instead look at the macro picture of when these variables line up and create environments that are difficult to operate in, we need to be prepared to compete in those and be successful. I've been with this company for 25 years. That has been a key focus area every day I come to work, how do we get more efficient, more effective to deliver for when the market drops down? I'm absolutely convinced that as markets develop, whatever environment we find ourselves in, we will be competitively advantaged in there to serve society and to grow shareholder value.
Okay, thank you. We've got time for one more question. How about the gentleman in the tie there with the blue jacket?
Good morning.
Good morning.
My name is Joe Meyer. I'm a visiting retiree from the Exxon refinery in Baton Rouge, Louisiana. I would just like to get an understanding that the safety system that we have in Baton Rouge, both at the refinery and the chem plant, is very archaic. My understanding is that it was developed around World War II. I'd like Exxon trying to get the management to develop with the employees there a more modern system that takes us into the 21st century, where the rule saying that no one gets hurt means no one really gets hurt. I wish to offer the opportunity for the company and the employees out there to get together and come up with a real good safety system. Thank you.
Thank you. Well, you're certainly addressing one of the most important areas of our business, which is making sure that we keep our people safe. I think the other point you make is absolutely critical, which is it takes engagement and working together between the employees and management if we're going to have a successful safety system. There's absolutely no disagreement in that space. We have introduced, over the last several years, a safety system around the world called LPS or Loss Prevention System in our chemical refining facilities. It's been a journey that the organization has been on to try to get better engagement and involvement with the workforce and from management all the way through. Safety has to be managed at every level in every facility. It's not just the workforce, people with their hands on the tools.
It goes all the way up to our management, including our management of those facilities. That process has been in work and progressing, I think, quite successfully. If you look at the results, and I mentioned earlier today, 2016 was our safest year. The results that we're getting in all of our facilities around the world with this Loss Prevention System is record-breaking. We have a number of facilities and sites that our safety incident levels are lower than we've ever had in any year that we've operated. I'm not sure exactly where Baton Rouge is in that process, but I know that work and the system that we're bringing to Baton Rouge and all our other facilities is having great success all around the world is keeping people safer. We're having fewer incidents. We're running our facilities better, which is absolutely critical.
Very aligned with your objective to make sure that we're running our facilities safe and that management and the workforce are working together hand-in-hand to improve safety and ensure that nobody does get hurt. Thank you for your comment. I want to thank everyone here for your questions and interest in the business. Unfortunately, we're out of time on the questions. Before I close the meeting, I'd like to share another video.
Wherever there is life, wherever there is progress, there is energy. As the world grows, the need for energy grows, too. At ExxonMobil, we're working on ways to provide it while addressing the risks of climate change. Producing clean-burning natural gas to reduce emissions from power generation, capturing carbon dioxide before it reaches the atmosphere, and exploring new energy sources like biofuels made from algae. Leveling further than energy, providing jobs, building new facilities as part of our growing global footprint, and driving economic development in the U.S. and around the world. We're also investing in communities by helping prevent malaria, empowering women to grow their incomes, and supporting education. Energy is what powers daily life, innovation, and human progress. No one is more committed to responsible energy than the people of ExxonMobil.
Thank you. Well, as we wrap up this year's annual meeting, I'd like to briefly summarize some of the key points we covered today. Society faces a dual challenge, meeting energy needs of people around the world and ensuring we limit impacts on the environment. ExxonMobil is committed to addressing these issues. As we've discussed, one of the most important ways we are contributing is through innovation and the development of new technology. Our commitment to technology has been the linchpin of our success and has enabled us to deliver value for you, our shareholders, and for society for more than 130 years. We remain confident that it will enable us to deliver value far into the future. Let me thank you all once again for attending. We appreciate your time. More importantly, we appreciate the interest you take in the corporation and its future success.
I want to assure you that your comments are given consideration well after this meeting and in the board's deliberations. One of our company's great strengths is our large and diverse shareholder base. We benefit from the diversity of these viewpoints. We thank you for sharing them. We hope to see you all again next year. At this time, the meeting is closed. I wish all of you a safe journey home. Thank you.