Oil industry - May 29
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Exxon to cut funding to climate change denial groups
David Adam, Guardian
The oil giant ExxonMobil has admitted that its support for lobby groups that question the science of climate change may have hindered action to tackle global warming. In its corporate citizenship report, released last week, ExxonMobil says it intends to cut funds to several groups that "divert attention" from the need to find new sources of clean energy.
The move comes ahead of the firm's annual meeting today in Dallas, at which prominent shareholders including the Rockefeller family will urge ExxonMobil to take the problem of climate change more seriously. Green campaigners accuse the company of funding a "climate denial industry" over the last decade, with $23m (£11.5m) handed over to groups that play down the risks of burning fossil fuels.
The ExxonMobil report says: "In 2008 we will discontinue contributions to several public policy research groups whose position on climate change could divert attention from the important discussion on how the world will secure the energy required for economic growth in an environmentally responsible manner."
(28 May 2008)
Exxon’s Texas-Size War Chest
Andrew Ross Sorkin (ed), Deal Book at New York Times
The oil industry is known to be very conservative. And Exxon Mobil, the world’s largest independent oil company, may be the most conservative of the bunch. It refuses to invest in projects that would lower its industry-leading return on capital employed, which is now around 35 percent. Rather than use its phenomenal cash flow for huge, dilutive acquisitions, it prefers to spend billions of dollars to buy back its own stock.
But it isn’t as if Exxon Mobil is taking those shares and setting them on fire. The oil giant appears to be squirreling them away - waiting for just the right time to strike. Or it sure seems that way, given the response that Rex Tillerson, Exxon Mobil’s chairman and chief executive, gave to a shareholder at the company’s annual meeting on Wednesday.
(28 May 2008)
For Big Oil, does the future look too much like the past?
Edward Silver, Money & Co. (blog at Los Angeles Times)
With Big Oil pumping out immense profits, you’d think cash would be available to fund renewable-energy programs. It is, and there's plenty of it, yet the majors' outsize earnings may be leading them back to the oil patch instead.
In February, BP said it would regard its impressive solar and wind operations strictly for their equity value and might spin them off. So much for Beyond Petroleum. More recently, Royal Dutch Shell withdrew from a landmark wind project in Britain and in 2006 sold the lion’s share of its solar interests to a German firm.
Exxon Mobil Corp., the giant among giants, remains outspoken in its belief in the enduring primacy of oil -- an issue that activist shareholders challenged at the company's annual meeting today in Dallas. Energy alternatives have gotten a bit more traction at Chevron Corp. and ConocoPhillips, but they still take a far back seat to other priorities at those premier fossil fuel marketers.
Big Oil commands the expertise, and certainly the resources, to play a transformative role in tackling the planet's energy dilemma. That, however, would entail a measure of self-transformation. At least in the short term, these profit machines have little incentive to bear the costs of a new mission or foster a culture of change.
Contrast their stance with that of U.S. carmakers. General Motors Corp., for one, is scrambling for survival by investing in hybrids, fuel cells and other technologies that limit oil use and carbon emissions.
(28 May 2008)