Permian Basin oil patch near Midland, Texas. Gas and oil extraction as far as the eye can see. Photo: Barbara Briggs

Climate Risk in the Spotlight of Chevron’s Annual Shareholder Meeting

Stephanie Thomas, , UCS | June 23, 2017, 9:50 am EDT
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Midland sits on the West Texas plains, an art deco mid-rise skyline rising over the broad landscape that stretches as far as the eye can see, dotted with pumpjacks, drill sites, and bright green-blue containment ponds.

I journeyed to Midland to attend Chevron’s annual shareholder meeting, held on May 31st, because I wanted to let the company know the importance of planning for a low carbon future. A resolution on the Chevron shareholder ballot requested that the company issue a report to assess how it can respond to climate change and the transition to a low carbon economy by altering the company’s energy mix or by acquiring/merging with companies that feature low carbon or renewable energy assets or technologies.

I set out to Midland along with Barbara Briggs from the Union of Concerned Scientists (UCS) and Dr. Wendy Gordon, a scientist from Austin, to voice our support for proposals that increase corporate transparency with regards to climate change.

Midland

In Midland, petroleum is a way of life. Around the city and even at the airport, the influence of the oil and gas industry is ubiquitous, with many billboards advertising equipment and technology to improve and enhance oil recovery.

On our way into town, we stopped at the Permian Basin Petroleum Museum, which outlines the geology of the Permian Basin, its history from the wildcatters to today, and the role of petroleum in our daily lives.

The 1923 discovery of oil in the Permian Basin shifted what was a small ranching and railroad community into a major hub for the US oil and gas industry. The Permian Basin Petroleum Museum even hosts a Chevron-sponsored exhibit called “Chevron Energy City” that teaches children about various forms of energy.

Dr. Wendy Gordon, Stephanie Thomas and Barbara Briggs at the Permian Basin pump jacks display in the Permian Basin Petroleum Museum, Midland, TX.

The Shareholder Meeting

The shareholder meeting itself was a brief affair. After passing through intense security (no purses, no electronics of any kind, no notebooks!), I made it into the building and took my place in a seat in the hall.

Some have asked me why I decided to go to the meeting. I happen to be a Chevron shareholder and a former Chevron employee. I have a background in Earth Science and have both studied ancient climate change and worked as a petroleum geologist.

I currently work with Public Citizen, a nonprofit organization that focuses on protecting health, safety, and democracy. When I heard that UCS was planning to attend the meeting, I jumped at the opportunity to join them. UCS brings a strong, clear voice for science, and I deeply respect their work on climate and beyond.

The week before the shareholder meeting, UCS organized a panel discussion on climate change and risk that highlighted some of the major risks corporations and communities face with regards to climate change.  That discussion confirmed for me that collectively, we need to act quickly.

Initially, there had been two items on the shareholder ballot dealing with climate change.

The first, a proposal for Chevron to report on company plans to deal with climate change-related risks, was withdrawn after Chevron published a report in March entitled “Managing Climate Risk: A Perspective for Investors.”

The second proposal calling on management to report on the transition to a low carbon economy got 26% of of the shareholder vote—a healthy showing that will have the board’s attention.

Another shareholder resolution called upon Chevron to disclose company spending on lobbying.   CEO John Watson’s commentary as he discussed management’s opposition: “We [Chevron] have the right and responsibility to represent our interests.”

When Barbara Briggs asked about Chevron’s relationship with ALEC (the American Legislative Exchange Commission), an organization that creates shadow legislation and has actively denied climate change, Watson upheld ALEC as a “leader” that played a “constructive role” in climate change policy discussions.

From what I heard at this once a year meeting with its shareholders, it seems as though Chevron’s major plan for handling climate change is to focus more deeply on natural gas and efficiency.  CEO Watson even commented that there will be “plenty of time” to respond to “risks” like production decline and environmental regulations. Physical risks, like the risk of storm surge, would be covered under the corporation’s comprehensive risk management plan.

Interestingly, at least half of the meeting was devoted to discussing climate change. And after the results of the ExxonMobil shareholder meeting, it seems like the movement pressing energy companies to plan seriously for a low carbon future is gaining traction.

As the meeting came to a close and people took to the exits, I overheard another shareholder say to a company employee, “With all this talk about climate change, has Chevron looked into hydrogen?”

Correction, June 26th, 12:22pm: 26% of Chevron shareholders voted for a proposal asking management to report the transition to a low carbon economy, not 27% as previously stated.   

Stephanie Thomas, Ph.D. is an earth scientist, researcher, and organizer with Public Citizen and an advocate for clean energy. She holds a Ph.D., M.S. and B.S. in Earth Sciences from Southern Methodist University, University of Nebraska-Lincoln, and Tulane University, respectively. Follow her on Twitter at @theHouston13.

Science Network Voices gives Equation readers access to the depth of expertise and broad perspective on current issues that our Science Network members bring to UCS. The views expressed in Science Network posts are those of the author alone.

Posted in: Global Warming

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