{"id":576680,"date":"2010-05-24T15:16:41","date_gmt":"2010-05-24T19:16:41","guid":{"rendered":"http:\/\/climateprogress.org\/?p=25865"},"modified":"2010-05-24T15:16:41","modified_gmt":"2010-05-24T19:16:41","slug":"exxonmobil-says-we-need-to-destroy-our-grandchildren%e2%80%99s-future-to-save-them","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/576680","title":{"rendered":"ExxonMobil says we need to destroy our grandchildren\u2019s future to save them"},"content":{"rendered":"
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\"http:\/\/www.greenpeace.org\/usa\/assets\/graphics\/exxonlies\"<\/p>\n<\/blockquote>\n

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ExxonMobil anxiously grasps its gigantic but unsustainable gold mines, pumps cash (much of it from your wallet to places far away), pours GHGs into the atmosphere, pushes its publicity machine, and doesn\u2019t seem to comprehend the relationships between a healthy climate and the lives of our grandchildren.\u00a0 They try to confuse you in the process.\u00a0 Their actions delay the creation of millions of jobs and our ability to author a healthier future.\u00a0 And that\u2019s putting it politely.<\/p>\n<\/blockquote>\n

ExxonMobil will be holding its Annual Meeting of Shareholders this week, on May 26 in Dallas.\u00a0 If you get your news from the status quo media, you might not have a full picture of the company (see NYT<\/em> suckered by ExxonMobil in puff piece titled \u201cGreen is for Sissies\u201d<\/a>).<\/p>\n

Guest columnist, frequent commenter, and former Chevron employee, Jeff Huggins paints a poignant portrait of the petro-giant.<\/em><\/p>\n

<\/span>Huggins has worked for companies as diverse as Chevron, Disney, and McKinsey & Co. — he even had a job offer from Exxon at one point.<\/em> Now he provides philosophical and strategic consulting to progressive companies, good causes, and individuals. His website is www.thewindingriver.org<\/a>.\u00a0 For details of Exxon’s role in funding the disinformation campaign on climate science, see \u201cAnother ExxonMobil deceit: They are still funding climate science deniers despite public pledge<\/a>.”\u00a0 See also this excellent commentary by award-winning journalist, Eric Pooley, \u201cExxon Works Up New Recipe for Frying the Planet<\/a>.\u201c<\/em><\/p>\n

In concluding his speech to the Royal Institute for International Affairs, titled \u201cMeeting Growing Energy Demand and Addressing Climate Risks\u201d (June 21, 2007), ExxonMobil Chairman and CEO Rex Tillerson quoted Bertrand Russell and expressed these sentiments:<\/p>\n

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\u201cThe British philosopher and social activist Bertrand Russell once said, \u2018We must care about the world of our children and grandchildren, a world we may never see.\u2019<\/p>\n

\u201cIndeed, we cannot yet see our grandchildren\u2019s world, its economy or its climate. But we must care about it. We must care enough to treat the risks of global poverty and global warming seriously. We must care enough to take actions to address them.\u201d<\/p>\n<\/blockquote>\n

Barely a year later, on July 19, 2008, The New York Times<\/em> ran a short interview of Chairman Tillerson.\u00a0 In response to the questions, \u201cWhere do you see your company in 20 years?\u00a0 Will oil and gas still be your dominant business?\u201d, he answered:<\/p>\n

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\u201cYes.\u00a0 In 2030, oil and gas will represent 60 percent of the world\u2019s energy needs.\u00a0 My view is I am going to keep doing what we do better than anyone else in the world\u2014finding, developing and delivering oil and gas to the world.\u201d<\/p>\n<\/blockquote>\n

(Petrarch wrote, \u201cAnyone who wants a certain result, but is quite happy with the absence of what would bring it about, has obviously no understanding of either causes or effects.\u201d\u00a0 Einstein observed, \u201cThe significant problems we have cannot be solved at the same level of thinking with which we created them.\u201d\u00a0 But never mind them.)<\/p>\n

I can\u2019t say, definitively, whether these are the same Rex Tillersons, whether he misunderstood what Bertrand Russell meant, or whether Version 2008 forgot his 2007 speech or neglected to read the IPCC reports and the urgent statements from the world\u2019s leading scientific organizations.\u00a0 Perhaps the news media should press him on the matter?<\/p>\n

Given that I\u2019m not a member of the media, however\u2014and thus I have no fear that ExxonMobil will stop running ads on my front page or network\u2014I thought I should offer a timely portrait of ExxonMobil to The American Public, as the big event nears.<\/p>\n

The \u201cbig event\u201d?\u00a0 ExxonMobil will be holding its Annual Meeting of Shareholders this week, on May 26 in Dallas.<\/p>\n

Before I begin, I should say that the following is not meant to be financial investment advice and should not be taken as such.\u00a0 Harvard lawyers\u2014some of them who are not already in Washington\u2014advised me to say so.\u00a0 And, if any of this causes dizziness, or any unwanted symptoms that last more than 24 hours, you may want to see your doctor.\u00a0 Importantly, you should check any of the following factors and figures before using them to form any opinions of consequence.\u00a0 Yet, from a human and ethical standpoint, if you want to have your investments in companies that act responsibly with respect to humankind, other species, the planet, and your grandchildren, my suggestion would be to promptly dump Exxon.\u00a0 That said, you be the judge.<\/p>\n

Let\u2019s start with the big picture\u2014and indeed it\u2019s Big:<\/p>\n

According to ExxonMobil\u2019s 2009 Summary Annual Report, they had a \u201cTotal net production of liquids and natural gas available for sale of 3.9 million oil-equivalent barrels per day\u201d.<\/p>\n

Based on that figure, and according to a rough but easy estimate, that suggests that ExxonMobil products, when used, generate over One Trillion Pounds of CO2 each year.\u00a0 That\u2019s from ExxonMobil products alone.\u00a0 In a single year.\u00a0 And it doesn\u2019t even include another huge number, which is the amount of GHGs generated in ExxonMobil\u2019s internal operations.<\/p>\n

What\u2019s the precise number?\u00a0 I don\u2019t know.\u00a0 I\u2019ve asked ExxonMobil, and they\u2019ve corresponded with me, but they won\u2019t provide it.\u00a0 Maybe The New York Times will think to ask them.<\/p>\n

For now, suffice it to say that ExxonMobil products and operations generate well over One Trillion Pounds of CO2 per year and perhaps even more than Two Trillion Pounds per year (in CO2-equivalent terms) of total GHGs.\u00a0 In any case, the amount generated weighs considerably more than the weight of the entire human species living on Earth today\u2014in other words, more than all 6.8 billion of us weigh, in total.<\/p>\n

Yes, that\u2019s a lot!\u00a0 Certainly enough to warrant a very, very heavy conscience!<\/p>\n

That said, they do make money:\u00a0 ExxonMobil is the most profitable company in the U.S. and, possibly, in the galaxy.\u00a0 According to the recent Fortune 500 listing, ExxonMobil\u2019s profits in 2009 were greater than the combined profits of the top fifteen companies in the motor vehicles and parts industry (Ford, GM, etc.), the top three apparel companies (Nike, etc.), the two major advertising conglomerates, the seven major entertainment companies (Disney, News Corp., Time Warner, etc.), and the five major networking and communications equipment companies (Cisco, Motorola, etc.) combined.<\/p>\n

You read right:\u00a0 ExxonMobil\u2019s earnings were greater than the net earnings of all of the leading companies in those industries combined!<\/p>\n

And that was in a down year for ExxonMobil.\u00a0 Their net income in 2009 was $19.3 Billion.\u00a0 In 2008, it was $45.2 Billion.<\/p>\n

(To avoid misinterpretation before we proceed, I\u2019m not suggesting that healthy profits are unhealthy or ungood.\u00a0 Nor will I be suggesting, below, that a few other aspects of ExxonMobil\u2019s modus operandi are problematic in and of themselves.\u00a0 Instead, it\u2019s the combined picture and its outcomes that cause concerns.)<\/p>\n

Yep, they\u2019re the most profitable U.S. company.\u00a0 A huge American company\u2014headquartered in Texas (land of the Cowboys) and incorporated in New Jersey (land of the Boss).\u00a0 But wait, where is the real action, according to the numbers?<\/p>\n

Well, in 2009, only 20% of their capital and exploration expenditures were spent in the U.S.\u00a0 Eighty percent was spent in other countries.\u00a0 Over three quarters (76%) of their total average capital employed is employed outside of the U.S., aside from corporate-level financing stuff.<\/p>\n

Here are a few other figures:<\/p>\n

Only about 16% of their net production of crude oil and natural gas liquids occurred in the U.S.<\/p>\n

Only about 14% of their \u201cnet natural gas production available for sale\u201d occurred in the U.S.<\/p>\n

Only a third (33%) of their refinery throughput occurred in U.S. refineries.\u00a0 (This actually surprised me:\u00a0 I had thought that at least their refining capacity was mostly in the U.S.)<\/p>\n

About 39% of their petroleum product sales and chemical prime product sales occurred in the U.S.<\/p>\n

And here\u2019s an interesting one:\u00a0 Only one sixth (roughly 16.6%) of their earnings after income taxes were earned in the U.S.\u00a0 In other words, over eighty percent of ExxonMobil\u2019s earnings after taxes were attributable to operations outside the U.S.\u2014presumably anyhow.\u00a0 Only their tax accountant knows for sure.<\/p>\n

Apparently, home for Exxon is not exactly Kansas!<\/p>\n

Indeed, in their 2009 report, they list as a key highlight the \u201cstart-up of a world-scale, fully integrated refining and petrochemical complex in Fujian Province, China.\u201d<\/p>\n

And here I was, thinking that we should be trying to reduce our use of fossil fuels and encouraging China to do the same.\u00a0 Silly me!<\/p>\n

Let\u2019s now consider ExxonMobil\u2019s apparent attitude toward employment.\u00a0 Set aside what those API ads would like you to believe\u2014that the oil companies genuinely care about employment to the degree that they\u2019d put their money where their mouth is\u2014and let the numbers tell the story:<\/p>\n

In 2009, ExxonMobil\u2019s revenues were $301.5 Billion, their net income was $19.3 Billion, and they employed roughly 80,700 people worldwide.\u00a0 Eight years earlier, in 2001, revenues were about $210 Billion, income was roughly $15 Billion, and they employed about 98,000 people.\u00a0 In other words, in 2009 they employed roughly seventeen thousand fewer people than in 2001.\u00a0 During most of the recent decade, ExxonMobil has cut employment as its revenues and profits have soared, until the downturn of prices in 2009 from levels in 2008.\u00a0 (In 2008, revenues were a whopping $459.6 Billion, net income was $45.2 Billion, and they employed 79,900 people.)<\/p>\n

And how do ExxonMobil\u2019s employment figures compare to the big picture?\u00a0 Is ExxonMobil a major employer\u2014a pro-employment employer\u2014a champion for the American worker?<\/p>\n

Well, not really.\u00a0 As mentioned, ExxonMobil employs about 80,700 people, worldwide.\u00a0 That compares to over 300,000 public school teachers employed by California alone, UPS\u2019s 408,000 employees, General Electric\u2019s 304,000 employees, HP\u2019s 304,000 employees, GM\u2019s 217,000 employees, Safeway\u2019s 186,000 employees, Wal-Mart\u2019s 2.1 Million employees, and over 6 Million teachers in the U.S.<\/p>\n

The oil industry is a small employer, relatively speaking.\u00a0 (General Electric alone employs more people than ExxonMobil, Chevron, ConocoPhillips, Valero, Marathon, Sunoco, Hess, and Murphy combined, with room to spare.)\u00a0 Exceptions to this point include the Chinese and Russian oil and gas industries, which are huge employers there\u2014all the more reason why we\u2019ll need to take steps to end our own addiction to oil if we ever expect to have any credibility whatsoever in working globally to reduce GHG emissions.<\/p>\n

Also, it\u2019s unclear how many of ExxonMobil\u2019s 80,700 employees are in the U.S.\u00a0 Remember, less than one quarter of ExxonMobil\u2019s capital is employed within the U.S., and U.S. operations accounted for only one sixth of their earnings after taxes.<\/p>\n

According to CBS News, General Motors\u2019 employment in the U.S peaked in the late 1970s at over 600,000 employees\u2014and about 850,000 worldwide.\u00a0 GM has lost far more employees during the last three decades than the total number of employees, worldwide, of ExxonMobil, Chevron, ConocoPhillips, Valero, and Marathon combined.<\/p>\n

What about R&D?\u00a0 Again, stats speak: For every dollar of revenue, ExxonMobil spent substantially less than one penny on R&D.\u00a0 The figure in 2009 was 0.35 cents\u2014about a third of a penny\u2014spent on R&D, per dollar of sales.<\/p>\n

And that\u2019s total R&D, including all the conventional R&D that oil companies pursue regarding conventional hydrocarbon-based fuels, production and refining processes, additives, chemicals, and so forth.\u00a0 In other words, only a fraction of that fraction of one little penny is spent researching renewable sources of energy.<\/p>\n

So, imagine paying ExxonMobil $3 for a gallon of gas.\u00a0 Of that $3, they spend about one penny on total R&D.\u00a0 Only a fraction of that little penny is spent researching renewables.\u00a0 Meanwhile, when you burn that gallon in your car, it generates about 20 pounds of CO2.\u00a0 (For example, burning just seven gallons of gasoline generates an amount of CO2 that weighs as much as a 140-pound person.)\u00a0 And where does the vast majority of your $3 go?\u00a0 Not into R&D, to be sure.\u00a0 Instead, most of it goes to places and people outside the U.S., where most of ExxonMobil\u2019s capital is employed, most of their expenditures are made, and most of their oil and gas resources happen to be.<\/p>\n

Here\u2019s another way to assess ExxonMobil\u2019s commitment to R&D, all things considered:\u00a0 ExxonMobil distributed more money to its shareholders in the recent five-year period alone\u2014a total of over $150 Billion\u2014than it would spend on R&D, at the current rate, in 142 years.\u00a0 That\u2019s only slightly less than the time since the Civil War.<\/p>\n

Does that sound like a company that\u2019s genuinely \u201ctaking on the world\u2019s toughest energy challenges\u201d and acting responsibly to help address climate change?<\/p>\n

In their 2009 Summary Annual Report, ExxonMobil tells us, \u201cEnergy-related carbon dioxide (CO2) emissions represent close to 60 percent of global GHG emissions attributed to human activities, and are expected to increase about 25 percent from 2005 to 2030.\u201d\u00a0 Then, instead of telling us what we and they should do to make sure this increase doesn\u2019t come to pass\u2014after all, scientists inform us that we should decrease emissions, not increase them\u2014ExxonMobil tells us that we\u2019ll need more and more oil and gas.\u00a0 In essence, their strategy perpetuates the problem.\u00a0 Remember what Chairman Tillerson told The New York Times<\/em>:\u00a0 \u201cI am going to keep doing what we do better than anyone else in the world\u2014finding, developing and delivering oil and gas to the world.\u201d\u00a0 But the problem they perpetuate is the same one they tell us they care about!<\/p>\n

Are you dizzy yet?<\/p>\n

Would Chairman Tillerson suggest that we \u201ccare about the world of our children and grandchildren\u201d by pouring GHGs into the atmosphere, altering and destabilizing the climate, acidifying the oceans, sending boatloads of money overseas, and blindly protecting an industry that employs few people, relatively speaking?\u00a0 Or, would he admit that it would be much better to transition to clean energy sources, preserve the climate, keep our money here, generate brave new worlds of American jobs, and embrace a healthier future?<\/p>\n

And consider this:\u00a0 When the U.S. House Select Committee on Energy Independence and Global Warming held its high-profile hearing back in 2008\u2014on April Fools Day, no less\u2014ExxonMobil sent one of its execs and Board members at the time, J.S. Simon, to deliver a prepared statement.\u00a0 Mr. Simon explained to the Committee that the oil industry depends on very high earnings when times are good in order to sustain a high level of investment in the business over the long-term, including during less-good times.\u00a0 In essence, he argued that enactment of the changes in tax law being considered\u2014i.e., changes intended to encourage investment in clean energy\u2014would unfairly reduce oil company cash flow and would \u201cimpact investment in future energy supplies\u201d.\u00a0 Yet, in their written statement, ExxonMobil didn\u2019t bother to tell the Committee about the many billions of dollars it distributes to shareholders each year as dividends and buybacks.\u00a0 (In their 2009 report, for example, they highlight the fact that they distributed a total of more than $150 Billion to shareholders in the last five years alone, including $26 Billion in 2009.)\u00a0 How is it that the oil industry truly depends on a continuation of favorable tax treatment, supposedly necessary to its ability to sustain investment in oil and gas, when it distributes so many billions of dollars each year instead of reinvesting them?<\/p>\n

Another main point that Mr. Simon (ExxonMobil) wanted to convey to the Committee was that \u201call reliable and economic forms of energy are needed to meet growing needs\u2014but the pursuit of alternative fuels must not detract from the development of oil and gas.\u201d\u00a0 Minutes later, he wanted the Committee to understand a forecast that \u201crenewable energy sources such as biofuels, wind, solar and geothermal will account for only about two percent of global energy supply in 2030\u201d, adding \u201cagain, an indicator of the scale [of continuing investment in oil and gas] required.\u201d<\/p>\n

In essence, it seems that ExxonMobil told the Committee:\u00a0 Don\u2019t dare change our tax treatment.\u00a0 We won\u2019t find it attractive to continue to invest in our own business if you do.\u00a0 Never mind our huge cash distributions.\u00a0 And by the way, renewable energy sources aren\u2019t going to amount to much anyhow.\u00a0 But thanks for asking!<\/p>\n

(As a side note:\u00a0 Very soon after appearing before the Committee on ExxonMobil\u2019s behalf, Mr. Simon announced his retirement.)<\/p>\n

Of course, we haven\u2019t even discussed ExxonMobil\u2019s confusing and often misleading PR campaign, their lobbying efforts, and so forth.<\/p>\n

So what\u2019s up?<\/p>\n

About 83% of ExxonMobil\u2019s substantial \u201cnet proved developed and undeveloped reserves\u201d of liquids is in countries other than the U.S.\u00a0 And about 82% of their \u201cnet proved developed and undeveloped reserves\u201d of natural gas is in countries other than the U.S.\u00a0 In other words, the vast majority of ExxonMobil\u2019s \u201cblack gold\u201d mine is outside the U.S.\u00a0 Most of it isn\u2019t \u201cTexas tea\u201d as we heard on the Beverly Hillbillies.<\/p>\n

ExxonMobil anxiously grasps its gigantic but unsustainable gold mines, pumps cash (much of it from your wallet to places far away), pours GHGs into the atmosphere, pushes its publicity machine, and doesn\u2019t seem to comprehend the relationships between a healthy climate and the lives of our grandchildren.\u00a0 They try to confuse you in the process.\u00a0 Their actions delay the creation of millions of jobs and our ability to author a healthier future.\u00a0 And that\u2019s putting it politely.<\/p>\n

Just think of the shiploads of money we\u2019ll be sending overseas for years and years, the trillions of pounds of GHGs we\u2019ll be pouring into the atmosphere, the lost opportunities to generate clean energy jobs here, and the world-class refineries that ExxonMobil will happily build in China, if we continue to foolishly follow the Exxonian way.<\/p>\n

Then just say no!<\/p>\n

(By the way, did I tell you the one about the new Chairman of General Motors who is also on ExxonMobil\u2019s Board of Directors?)<\/p>\n

Be Well\u2014or at least Get Well Soon,<\/p>\n

– Jeff Huggins<\/p>\n

Related Post:<\/p>\n