It was with great anticipation that I attended the ExxonMobil Shareholders Meeting last month at the invitation of the Union of Concerned Scientists (UCS). My attendance was facilitated via proxy from Mercy Investment Services. In doing so, I joined a multitude of interested parties—some of whom had traveled great distances—to engage ExxonMobil’s CEO Darren Woods in discussions concerning a wide array of topics including, but certainly not limited to, climate change. Alas, none of us (representatives of the Union of Concerned Scientists or others who had come prepared with questions about climate change or environmental issues) were called upon. We were, in fact, studiously avoided.
Thus, sadly, I must admit that when it was all said and done: I walked away from the experience with my skepticism of the petro-chemical industry giant’s sincerity in addressing climate change in any meaningful way intact. Simply stated, what I heard from Mr. Woods—though masterfully cloaked in symbolic-laden rhetoric—came down to one very clear point: ExxonMobil is committed to business as usual.
Yes, Mr. Woods did indeed address the company’s efforts in advancing lubricants for expanding wind facilities; yes, he addressed efforts to advance cutting-edge technologies in carbon sequestration; yes, he addressed lowering emissions from natural gas production; and finally yes, he also addressed furthering the company’s commitment to developing algae-based biofuels of the future. Historically, total projected investment capital for these projects amounts to roughly $8 billion.
Nevertheless, all of this spending was offset (and not in the good way) with a promise of low-cost/high-return investment in oil and gas mega-projects: (1) Offshore oil reserves of Guyana and Brazil, (2) Liquefied natural gas reserves in Mozambique and Papua New Guinea, and (3) Unconventional shale reserves in the Permian Basin of Texas. Total projected investment capital for these projects is roughly $30 billion.
This “dilemma of rhetorical disconnect” was further exemplified throughout the course of Mr. Woods’ remarks to company shareholders and other interested parties.
In specific terms, Mr. Woods began his remarks by stating, “We’re… committed to be a part of the solution in addressing the risk of climate change and other pressing societal challenges.” He continued, “Society has aspirations for economic growth, reliable and affordable energy and environmental protection. We see our role as helping close the gap between what people want and what can be responsibly done. This is what I believe sustainability is all about and frankly, is what we’re all about.”
Mr. Woods then expressed confidence in projections of steady markets for oil and gas through 2040, and the belief that “… meeting the world’s energy need will require trillions of dollars in new investments, even in a two-degree scenario.” At the close of his remarks, Mr. Woods restated ExxonMobil’s commitment, “…to help close the gap between what society wants and what is economically available, using advantaged investments and promising technology. As society’s need [sic] continue to evolve, we’ll continue to respond.”
All of which leads me to the question I would’ve asked Mr. Woods had I been given the opportunity:
In a recently published article with my colleague, Dr. Katharine Hayhoe, we note that should the known fossil fuel-based energy reserves within and around the Arctic Circle be developed, the probability of achieving the Paris Climate Agreement’s stated goal of limiting global temperature at or below 2C will be highly unlikely, if not impossible.
As a scientist, and a citizen, I worry that ExxonMobil’s conclusion, as stated in the company’s recent “Energy & Carbon Summary Report,” that its upstream recoverable reserves poses “little risk” is a false conclusion given the scientific-basis for the heightened risks posed to human society, including our health, our natural resources, and even our national security should those reserves in the Arctic be developed and then utilized as a primary source for generating energy.
In order to resolve this problematic finding, Exxon/Mobil should seriously consider shifting the lion’s share of its capital investment resources away from exceedingly difficult and expensive endeavors like that of developing Arctic-based fossil fuel resources and instead toward— what by all free-market indicators suggest is taking hold across the globe—meeting/addressing the public’s increasing demand for alternative and renewable energy resources.
So, given that scenario as well as Exxon/Mobil’s existing investment portfolio my question then, is this:
(1) Why is Exxon/Mobil so risk averse to shifting away from an upstream fossil fuel-based investment paradigm and toward an upstream alternative/renewable-based investment paradigm?
(1a) Why not redirect those monies into the clean energy of the future to better sustain Exxon/Mobil’s business model as a global energy leader for future generations of stockholders?
(1b) Wouldn’t that resolve the problematic finding in your “Energy & Carbon Summary Report” that the emissions trajectory of Exxon/Mobil’s “Outlook for Energy” will far exceed the Paris Climate Agreement goal of keeping global temperature increase well below 2C?
The questions I raised are based on two fundamentally important components that drive any shift in energy policy. First, policy research finds that three conditions are required for energy policy to shift: (1) energy markets, (2) energy technology, and (3) political willpower. Second, that same research also finds that there is an inverse relationship between the advancement of energy production technology used to develop exceedingly difficult upstream fossil fuel resources and the rapid deterioration in the environmental quality of our collective natural resources.
Any closing of Mr. Woods’ so-called “gap(s),” then, requires that energy markets, technology, and political willpower align themselves in such a manner that the well- below two degrees Celsius (2°C) objective of the Paris Climate Agreement is attainable.
If ExxonMobil is serious about addressing climate change, then I would suggest that Mr. Woods abandon the rhetoric of seeking change and provide greater detail to his vision of a sustainable future. (Note to Mr. Woods: your definition of “… what sustainability is all about” is not even close to being correct). I would also suggest to Mr. Woods, or any other member of ExxonMobil’s Board of Directors, that the only condition left unmet for fully realizing a historic shift in how America powers its economy is that of political willpower.
Or perhaps, what’s missing is dynamic leadership from the private sector, from an industry leader in innovation, that’s willing to take the risk to sustain its business model and the environment for future generations. Clearly, while Mr. Woods suggests that ExxonMobil is articulating some notion of what it views as being responsive to the public’s demand for action on climate change, its actions remain cloaked in rhetorical subterfuge.
Taking risk to address the pressing societal problems of climate change requires bold and dynamic leadership. What are you waiting for, Mr. Woods?