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Big oil made $600 billion under Bush, but invested bupkis in clean energy, Part 2: Details on BP, Chevron, Conoco Phillips, Shell and ExxonMobil

By Climate Guest Contributor

"Big oil made $600 billion under Bush, but invested bupkis in clean energy, Part 2: Details on BP, Chevron, Conoco Phillips, Shell and ExxonMobil"

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In Part 1, Center for American Progress’s Dan Weiss and Alexandra Kougentakis pointed out that despite green marketing campaigns, oil companies are investing just four pennies on clean energy for every dollar of profit. This post, first published  gives five short case studies of how the major oil companies have consistently cut investments in clean energy and continued to violate basic environmental quality laws while lining the pockets of executives and shareholders (see also “Shell shocker: Once ‘green’ oil company guts renewables effort).

BP

BP has an entire division devoted to “alternative energy.” Investments include biofuels, solar energy, wind energy, hydrogen power, and carbon capture-and-sequestration. The company’s most recent sustainability report pledges to invest $8 billion over a period of 10 years in alternative and renewable energy technologies. This $800 million annual investment is a paltry sum compared to the $125 billion made since 2001.

bp logo

SOURCE: AP/Charles Dharapak

Recently, employees in BP’s renewable energy division in the United Kingdom were laid off with the cancellation of several clean energy projects, such as two power plants that would have captured and stored their carbon dioxide emissions. It is expected that global operations will be affected as well, and proposed wind farms in the United States may be delayed. Interestingly, the apparent investment caution has not prevented BP from pursuing a tar sands project in Canada, announced at the end of 2007.

Oil from Canada’s tar sands is the most expensive form of crude oil to produce. The extraction and conversion of tar sands to a usable energy source can cause as much as five times the greenhouse gas emissions compared to conventional crude oil. Contamination of waterways by pollution from tar sands development is suspected of causing bizarre mutations of marine organisms. The pollution from these developments is also suspected of causing the high cancer rates and other health problems in the surrounding areas.

BP recently agreed to pay $180 million to settle a lawsuit filed by the federal government for “putting air quality and public health at risk.” BP’s refinery in Texas City, TX, violated federal health safeguards for benzene, asbestos, and ozone-depleting chemicals. The settlement includes the installation of pollution controls to the refinery as well as a civil penalty and for a pollution reduction project.

Chevron

Chevron has made some investments in alternative and renewable energy technologies and energy efficiency, including biofuels, geothermal, hydrogen, and solar energy projects. Ventures in Indonesia and the Philippines make Chevron the largest private geothermal power producer in the world. The alternative energy subsidiary Chevron Energy Solutions develops projects that include technologies that generate electricity from waste heat of industrial processes. In the United States, CES projects are estimated to reduce greenhouse gas emissions by 3 million metric tons.

But Chevron’s investments reflect its commitment to oil and relative disinterest in renewable energy. Its 2007 Corporate Responsibility Report notes “”¦the world’s consumption of energy is expected to grow 55 percent by 2030. The majority of that energy will be provided by fossil fuels.” The company invests a measly 5 percent compared to total annual profits in low-carbon energy programs.

What’s more, Chevron does not plan to reduce its greenhouse gases emissions. In 2007, it reported total net emissions of 60.7 million metric tons, but its 2008 goal was 62.5 million metric tons””an increase of nearly 3 percent.

Conoco Phillips

Conoco’s most recent sustainability review in 2006 emphasized biofuels as a key renewable energy investment. All renewable and alternative energy projects are part of the company’s “Emerging Businesses” segment, which also includes advanced hydrocarbon processes, energy conversion technologies to make liquid fuels from coal and other fossil fuels, and new petroleum-based products. The 2007 annual review mentions partnerships and collaborations on biofuels, but there’s no mention of solar or wind energy investments.

Conoco’s pollution efforts are also questionable. The company provided 2007 figures for performance metrics on air pollution and greenhouse gases. While its emissions of sulfur dioxide, nitrogen oxide, and volatile organic compounds declined between 2006 and 2007, these reductions are required by law. There are no federal restrictions on greenhouse gas pollution, and it rose by 0.5 percent.

ExxonMobil

ExxonMobil’s main area of investment in clean energy has been in the development of vehicle technologies. Advanced engine research aims to improve vehicle fuel economy by 30 percent, and the company conducts battery research for hybrid electric cars.

ExxonMobil is one of four sponsors of the Global Climate and Energy Project, or GCEP, at Stanford University (the other three are General Electric, Toyota, and Schlumberger Limited, which is an oilfield services corporation). This is a controversial university-corporate research program to develop clean-energy technologies.

As evidence of its support for new renewable technologies and fuels, the sponsorship of GCEP was cited by an ExxonMobil representative in a hearing last year before the House Select Committee on Energy Independence and Global Warming. Committee Chairman Edward Markey (D-MA) observed that Exxon’s investment of $100 million over a decade was almost embarrassing compared to its annual profit, which was over 400 times that amount. “Why is ExxonMobil resisting the renewable energy revolution?” Markey asked of ExxonMobil’s Senior Vice President Stephen Simon. Simon quickly cited the $100 million research program at Stanford. Chairman Markey replied, “$100 million? But you made $40 billion last year.”

rex tillerson

SOURCE: AP/LM Otero

ExxonMobil reports a 3-percent reduction in greenhouse gases since 2006, and a 23-percent reduction in emissions of VOCs, nitrogen oxides, and sulfur dioxide since 2004. Yet at the end of 2008, the company agreed to pay nearly $6.1 million for violating the Clean Air Act by failing to monitor sulfur dioxide pollution. A 2008 University of Massachusetts analysis ranked Exxon as the ninth in a ranking of top U.S. air polluters.

Exxon CEO Rex Tillerson: “For the foreseeable future … the world will continue to rely dominantly on hydrocarbons.”

The company’s greenwashing efforts are particularly outrageous given its support for organizations and people that disputed climate change science. The company’s actions and statements by its officers indicate that the ExxonMobil business model will continue to rely on oil dependence. CEO Rex Tillerson said: “For the foreseeable future””and in my horizon that is to the middle of the century””the world will continue to rely dominantly on hydrocarbons to fuel its economy.”

Recently CEO Tillerson announced his support for a carbon tax to address global warming, but some analysts are skeptical of his motives. Susan L. Smith, a law professor at Willamette University, notes that a call for a carbon tax “certainly muddies the waters for quick passage of a climate change bill. And maybe that’s the real point.”

Shell

shell sign

SOURCE: AP

From 2003 to the first half of 2008, the Shell Oil Company invested $1.75 billion in alternative energy and carbon dioxide reduction projects. This is a small sum compared to the company’s profits of $133.5 billion during the same period. It declares itself the world’s largest distributor of conventional biofuels, and it has also made investments in solar and wind energy projects in the United States and abroad.

But in 2007, Shell dumped many of its solar projects. While total profits for the gas and power division, which includes wind and solar projects, was $2.8 billion that year, only one wind energy project was mentioned in the 2007 annual report. Even though Shell made the second-highest profit of the oil companies for 2008 at $26.3 billion, it invested less than 2 percent in renewable energy projects.

Shell recently reiterated its disinterest in renewable energy when the company announced a moratorium on new investment in wind and solar energy. On March 17, Linda Cook, the head of Shell’s gas and power unit, announced that, “We do not expect material amounts of investment in [wind and solar energies] going forward.” In response to the decision, John Sauven, the executive director of Greenpeace UK, noted, “After years of proclaiming their commitment to clean power, [Shell is] now pulling out of the technologies we need to see scaled up if we’re to slash emissions.”

Like BP, Shell is also involved in significant investments in Canada’s tar sands while reducing investment in European wind and solar energy ventures, including the world’s largest planned offshore station, valued at $4 billion to $6 billion. Shell raised a major outcry in Europe in 2007 for an advertisement that was so blatant in its greenwashing that it was actually banned in Britain.

Between 2006 and 2007, Shell reported across-the-board reductions of greenhouse gases, VOCs, sulfur dioxide, and nitrogen oxides. But like its fellow big oil company Exxon, Shell was sued for Clean Air Act violations between 2003 and 2007. If found guilty, Shell could be liable for over $32 million in fines.

Big Oil executives protest President Obama’s proposal to reduce tax breaks

President Obama’s proposed budget would eliminate $32 billion in tax breaks and recover lost royalties over 10 years. Top officials of the big three oil companies oppose this proposal despite their billion dollar profits over the past eight years.

ExxonMobil

Chief Executive Officer Rex Tillerson: “Any steps which cause the industry to be less competitive overseas or cause the cost of development here at home to go up, ultimately, in my view, does not serve the interests of the American people.”

ExxonMobil made $45.2 billion in profits in 2008, and a total of $235 billion from 2001-2008.

Shell

Marvin Odum, the president of Royal Dutch Shell’s U.S. operations: “It’s a concerning area, of course, because as you put more royalty and tax burdens on the industry, particularly a cyclical industry, you just have to be cognizant of the potential impact it has on investments. That’s not something you can put real definition to, but I think it’s a concern.”

Shell made $26.3 billion in profits in 2008, and a total of $158 billion from 2001-2008.

Chevron

David O’Reilly, Chief Executive Officer: “Raising taxes on domestic production is the wrong thing to do.”

Chevron made $23.9 billion in profits in 2008, and a total of $99 billion from 2001-2008.

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9 Responses to Big oil made $600 billion under Bush, but invested bupkis in clean energy, Part 2: Details on BP, Chevron, Conoco Phillips, Shell and ExxonMobil

  1. K L Reddington says:

    Major oil companies.(vertically integrated) Are doing fair in terms of profits as a percent of sales. Losing money is still bad. Profit is what they are in business to attain. People that do not work in industry are supported by profits earned in industry. Major Oil companies are always a source of taxatio. Punitive taxation is not a new concept if the commoners can be stirred up.
    There is a little more comment on BP in the article. 20 years ago, BP acquired Sohio. 10 years ago, they acquired Amoco Production. Since 2000 Atlantic richfield has been known as BP west coast Products. Yes they are cyclical companies and many of the mergers were required to survive low oil profits.
    I was in Mobils office in New Orleans and we discussed an offshore acreage bit. Offshore leases are paid for before drilling starts and production comes in. It may be 7 years before they find out if they paid too much and found no oil or if they will make money. It is common to spend 3 billion which is not yet tax deductible 5-10 years before revenues exceed expenditure. There is very little opportunity in the energy industry to go to a bank and borrow money. Russia for example could remove Exxon from Sakhalin Island tomorrow. Venezuela took a lot of production from oil companies recently. It is high risk.
    It is an old business rule that high investment risks demand high returns. As capitialism still shows, we have many industries losing billions and we see derogatory comments on those that show profits in good years.
    If we want to lower crude prices, we will have less battles against drilling in North America.

  2. SecularAnimist says:

    K L Reddington wrote: “If we want to lower crude prices, we will have less battles against drilling in North America.”

    We don’t want to lower crude prices. We want the price of oil, and coal, and natural gas to go up, to internalize the full cost of the environmental damage that they cause, and force them to compete in the market on a level playing field with clean, renewable sources of energy. We want to burn LESS oil, not drill for more of it. We want offshore wind turbines, not offshore oil drilling rigs.

    Besides which, the oil corporations already have vast leases on public lands where they are already permitted to drill, and they aren’t doing it. Why should they? What incentive do the oil corporations have to lower the price of their product by putting more of it on the market?

  3. OK. That does it.

    It is time for a policy that optimizes survival while respecting the science. Adapt and mitigate.

    The ONLY free use of carbon fuel should be for the direct manufacture and deployment of green energy systems – ALL other carbon fuel uses should be heavily taxed, capped and restricted.

    Anything else is just folly. Oil companies are just moving deck chairs on the Titanic.

  4. FridrihLop says:

    Good article, the advertisment is sold?

  5. Rick Covert says:

    I have a major beef with Chevron with respect to renewables. When GM killed its EV-1 electric car program it also sold its 50% share in the battery company Ovonics to Texaco which was then bought by Chevron. Chevron renamed the company to Cobasys. Ovonics batteries extended the range from 60 miles on its lead-acid batteries to a range of 90 to 120 miles. Chevron then proceeded to restrict the use of its batteries only to those who could purchase in large volume, like GM, but who would not also use the batteries to power the car over 50% of the car’s traveling range. This was a clear shot at electric cars but not to hybrids which still use gasoline albeit more efficiently. Stan Ovshinsky, Ovonics cofounder along with his late wife Iris, stated in an interview in the Economist, “I think we at ECD we made a mistake of having a joint venture with an oil company, frankly speaking. And I think it’s not a good idea to go into business with somebody whose strategies would put you out of business, rather than building the business.”

    Sad but true. When the modern aire of the legacy of Thomas Edison calls the relationship what it is you have to wonder what could the possibilities for those batteries would have been if Ovonics could have been unshackled from this suffocating business alliance.

  6. James Newberry says:

    The financial, and therefore political, power of these anglo/american cartels is astounding. Their crimes, and political capture of world governance, are well documented. If any next billion tons of carbon dioxide could throw the global warming switch of abrupt climate change due to permafrost and methane hydrate feedbacks resulting from melting a trillion tons of frozen carbon, what is the political solution to governance for sustainability and peace?

  7. K L Reddington says:

    GE Completes Enron Wind Acquisition; Launches GE Wind Energy

    Atlanta, Georgia, May 10, 2002 –

    GE Power Systems today officially entered the wind power industry, announcing that its acquisition of certain assets of Enron Wind Corp. has been completed. The new GE business, GE Wind Energy (www.gewindenergy.com), will be headed by Steven Zwolinski, who has been serving as general manager of GE Global Hydro.

    Enron was big oil. Of course they really were the big American player in developing Wind/electric power. Appparently they didn’t make enough profits.

  8. Ronald says:

    K L Reddington,

    Nonrenewable, exhaustible, depletable, polluting fossil fuels.

    We’re not going to agree on a lot of things concerning fossil fuels I’m gathering from your posts. I’ll give you my look on fossil fuels.

    They are nonrenewable, exhaustible and depletable. Getting fossil fuels from the earth is not production, it is extraction. You can’t pull the same oil out of the ground twice. If you pull in out today or tomorrow you can’t pull it out of the ground next week, next year or decade or generations from now.

    Can we overspend on houses? Sure, we’re showing that. Can we overspend on education? Maybe, we’re showing that with many graduates with high debt, not enough of the needed jobs. Can we overspend on stimulus from the government? sure, we can just go deeper in debt and then not have those construction jobs we do now in the future.

    We can also produce and consume to much fossil fuel: oil, natural gas and coal. That is when we are going to run up on problems like Peak Oil, when we’ve created our energy and economic systems around oil and the world runs out of it physically or is cut off from us in a political problem. There will also come a time when we have Peak Coal and Peak Natural Gas. Fossil Fuels are nonrenewable, exhaustible, depletable and polluting. (did I mention that).

    I get where you are coming from, as a businessman worried and concerned about this next quarter and next years business. What happens though with political systems is they should look up from the needs of Business Immediate Gratification needs and consider the next 5, 10, 50 and the future of our planet. Then we come up with some different ideas and requirements of what should be done.

    I think that fossil fuels are way undertaxed. I think that we should reduce property taxes by one half and make that up with fossil fuel taxes. I think we should eliminate the sales tax and instead of taxing sales, tax fossil fuels. Why? Because we are using up large percentages of fossil fuels in only a few short years when fossil fuel use should be spread out over decades or not used at all because of Global Warming. Because our houses, and other buildings and land will be here 50, 100, 500 years from now and our land will still be here a million years from now and fossil fuels will be long gone. It’s madness to extract fossil fuels at the rate we are and not consider what happens after they are depleted.

    Fossil fuels can be said to be much to valuable to use as we are doing, as the bulk of electricity and motor vehicle energy. What we should be doing is if we use fossil fuels at all is use them only as a bridge between using all the renewable, nonexhaustable, nondepletable and less polluting sources of energy from efficiency, wind, solar, geothermal and nuclear.

    We have a choice to build only fossil fuel plants now and use all the fossil fuels up and then build wind, solar, geothermal after the fossil fuels are gone and not have those easily storage fossil fuels to use as bridge energy. Or we can build the renewable energy plants now as the bulk energy and use fossil fuels only when needed as bridge energy like we should because fossil fuels may run out some day.

    It is just not right for anybody to say we haven’t allowed drilling in North America, there has been more than half a million holes drilled for fossil fuels on this continent. What we should be doing is doing it smarter. Instead of a rush to use up all the fossil fuels, we should recognize our limitations, because nature with Global Warming and Peak Oil surely will let us know what they are.

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