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