Oil Companies That Caused Climate Change Now Fear Its Financial Impacts

Libelul, via FLickr

by Ryan Koronowski, via The Climate Reality Project

We all know oil companies make an amazing amount of money ($33.5 billion in 2012 first quarter profits by the Big Five alone) selling gasoline and other petroleum products to the world. The U.S. government gives billions of our tax dollars back to these companies every year. The oil companies spend big to keep the system running this way.

Not a bad system, if you’re a huge fossil fuel corporation. Unfortunately, the oil companies make a product that warms our planet and disrupts our climate, which affects all of us. So what does the fossil fuel industry do? They fund organizations and people that make the case for denial and inaction. So this is an industry that profits from products that science shows will change the climate, then spends money on cover-up.

Actually, though, it gets even stranger. When it comes to protecting their profits, oil companies explicitly acknowledge that climate change poses a threat to their bottom line.

ExxonMobil tells its investors that “rising greenhouse gas emissions pose risks to society and ecosystems that could be significant.” Chevron says on its website: “[T]he use of fossil fuels to meet the world’s energy needs is a contributor to an increase in greenhouse gases … There is a widespread view that this increase is leading to climate change, with adverse effects on the environment.” ConocoPhillips goes further: “ConocoPhillips recognizes that human activity, including the burning of fossil fuels, is contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate.” BP even cites the Intergovernmental Panel on Climate Change on its website. And Shell urges that “CO2 emissions must be reduced to avoid serious climate change.”

But talk is cheap. Are they doing anything concrete to suggest this isn’t just hot air?

They do when it affects their bottom line. IBM’s Carbon Disclosure Project Report said that “ExxonMobil noted that the company’s ‘operations around the world include remote and offshore areas that present challenges from existing climate extremes and storms. These severe weather events may disrupt supplies or interrupt the operations of ExxonMobil facilities.’” So according to Exxon, climate change could disrupt their business model. It’s easy to see through the rhetoric when giant fossil fuel companies financially react to the risk of disruption and damage from climate change.

One example is Louisiana’s Highway 1, which “connects critical oil and gas resources in booming Port Fourchon to the rest of the nation” and may influence the distribution of up to 18% of U.S. oil and gas supply. It’s crucial to the future success of the fossil fuel industry. The only problem is that it’s sinking. And increasing storm surges due to climate change threaten to cut off access to the port. So who’s stepping in to save LA-1? The LA-1 Coalition, which says “If LA 1 were to be rendered inserviceable due to high water, even for just a few days, this nation’s energy supply would be crippled.” Funders of the LA-1 Coalition include: BP, Chevron, Entergy, Halliburton, Anadarko Petroleum, ConocoPhillips, Marathon Oil, Murphy Oil, Shell, and ExxonMobil. All of these companies are putting their money where the science is – science that says climate change increases the risk of storm surges knocking out a road critical to their bottom line.

As Entergy’s director of climate consulting said, “Clearly we are facing risks from sea level rise, more intense storms, flooding and surge damage.” The company is spending $73.5 million moving and strengthening transmission and distribution lines serving Port Fourchon, Louisiana. Climate Central released a map showing that 328 energy facilities in the U.S. are less than 5 feet above local high tide.

BP is also taking projections about climate impacts beyond the rhetoric on its webpage. Last year, ClimateWire reported: “[BP] has altered the design of oil-drilling platforms in the North Sea to accommodate projected sea level rise and it has improved coastal defenses at its Northstar field in Alaska, where receding sea ice has left shores more vulnerable to erosion from crashing waves” (subscription only). In its 2011 Sustainability Review, BP talks specifics on how it’s adapting to climate change impacts: “…we adapt drainage design practices based on the anticipated frequency and severity of storms.” So the product that causes climate change is also causing the seas to rise, ice to melt, and storms to strengthen. You’re not going to see that on their next TV commercial.

What about the Trans-Alaska oil pipeline? The permafrost on which most of it was built is thawing faster than anticipated, so the supports have to be upgraded. The repair work won’t come cheap. Gunter Weller of the Institute for Arctic Research at the University of Alaska, Fairbanks says “[t]hat increases the price of your gasoline.”

A recent Senate hearing discussed the risks sea level rise and storm surge pose to coastal energy facilities. It’s the elephant in the room. The fossil fuel companies aren’t trying to do what they say needs to be done to solve climate change. Instead, they’re preparing for its impacts, with profits gained from our pockets.

So the next time you pass a gas station, ask why climate change is serious enough for oil companies to spend money preparing for it, but not serious enough to call for a rapid transition to renewable, sustainable energy.

Ryan Koronowski is the Research Director and Rapid Response Manager for The Climate Reality Project. This piece was originally published at The Climate Reality Project and was reprinted with permission.

20 Responses to Oil Companies That Caused Climate Change Now Fear Its Financial Impacts

  1. Leif says:

    So where are the billboards that say: “The oil industries believe in Global Warming. Do you?

  2. Dawn says:

    Oh well. They have no one to blame but themselves.

  3. Tami Kennedy says:

    I believe the acceptance of climate change impacts is there; however, some of the industry are using climate change to show why their expansion of natural gas is so valuable.

  4. M Tucker says:

    “So the next time you pass a gas station, ask why climate change is serious enough for oil companies to spend money preparing for it, but not serious enough to call for a rapid transition to renewable, sustainable energy.”

    You don’t honestly believe an oil company would say, “You need to stop using our product. Oil use is destroying a livable climate!” Of course not. That will never happen. Just like the US Navy, many US cities, and some farmers and ranchers, adaptation is the new solution for “sustainability.”

  5. Leif says:

    Tell the acidifying oceans that M Tucker. It is up to humanity to fight for survival!

  6. M Tucker says:

    Don’t expect oil companies to fight for the survival of civilization, expect them to fight for their own narrow self interest. Eventually humanity may set up… I am waiting for the big gasoline boycott.

  7. John Lemons says:

    I hate to be labelled as a conspiracy theory “nut,” but here is my take on things (nothing provable only speculative):

    1. Fossi fuell companies that acknowledge a human attribution to global climate change or that it is a significant problem primarily do so in attempt to create a legal shield against inevitable lawsuits that will arise over internal documents from companies that show that many knew of the risks of use of fossil fuels but nevertheless decided to participate in climate change denial activities, i.e., intentional misrepresentation of the science.

    2. Paying “lip service” to the existence of human attribution to global climate change and its seriousness is one thing but the more substantial political lobbying against mitigation is another.

    3. If the fossil fuel companies are successful in stopping meaningful mitigation of greenhouse gases, and as a consequence the Arctic Ocean becomes essentially ice–free, think of all they will have gained.

    A Reluctant Conspiracy Theorist

  8. Leif says:

    Corporations are “People” now. To me that implies that their old fiduciary responsibility to maximize profits for the share holders is now usurped by the civil fiduciary responsibility to not pollute your neighbors yard for profits or otherwise. Even the President cannot throw a paper cup out the car window without repercussions, how come Corpro/People get to pick and choose? By the same token, how come the GOP tax dollars do not fund abortion but mine, yours and even the Presidents must fund the ecocide of Earth’s Life Support Systems? Very strange…

  9. Chris Winter says:

    And, FWIW, only Shell’s page passes W3C validation:

    ExxonMobil: 53 errors 11 warnings found while checking this document as XHTML 1.0 Transitional! (*** Home page ***)

    Chevron: 26 errors, 13 warnings found while checking this document as XHTML 1.0 Strict!

    ConocoPhillips: 58 errors 2 warnings found while checking this document as XHTML 1.0 Transitional!

    BP: 132 errors, 67 warnings found while checking this document as XHTML 1.0 Transitional!

    Shell: This document was successfully checked as HTML5!

  10. Mark Shapiro says:

    Right. The oil companies say one thing (very softly) on their websites, and then quite another with their contributions to ALEC, Heartland, politicians, lobbyists, and other (not so softly).

  11. M Tucker says:

    I understand your frustration. I too live with it everyday. It seems obvious to me these corporations are much more powerful than the President, they own congress, and no nation in the world can stand up to them…not as long as we have a fossil fuel economy.

  12. Jim Baird says:

    David Hone, Senior Climate Change Advisor, Shell International Petroleum Company published an article on the EnergyCollective site October 28, 2010, titled The real issue, in which he stated, “As CO2 levels in the atmosphere continue to rise (and given the current state of global action they could quite possibly go on rising for much of this century) we hear a great deal about storms and droughts but not a huge amount about the really difficult issue that most countries face, rising sea levels.

    Allianz has estimated as much as $28 trillion worth of coastal infrastructure will be at risk by as early as 2050.

    Only ocean thermal energy conversion provides the energy we need at the same time as it remedies the “real issue” by converting ocean heat that causes thermal expansion and icecap melting to mechanical and electrical energy.

  13. Jim Baird says:

    Addendum, that $28 trillion can and no doubt will be factored into all of our insurance premiums.

  14. Mulga Mumblebrain says:

    Climate Judases and Januses.

  15. Mulga Mumblebrain says:

    I blame the parents, from both the nature and nurture points of view, and peer group pressure. And Beelzebub.

  16. Mulga Mumblebrain says:

    Leif, I’m very much afraid that you are allowing your compassion, human empathy and moral understanding to get in the way of the Dreadful Truth. And that is that those ‘human beings’ who run capitalism are bereft of all those virtues, and operate as single-minded agents of mass destruction in pursuit of profit maximisation. That is their only ‘spiritual’ guiding light.

  17. Mulga Mumblebrain says:

    You left out (4) The fossil fuel and other ruling pathocrats see a global temperature rise as beneficial, because they think that they will not be amongst the billions who will die.

  18. Artful Dodger says:

    Even Jeffrey Dahmer had ‘Beware of the Dog’ signs on his front lawn…

  19. It’s worse than that Mulga…”because they don’t think they will be among those who die” would be bad, very bad – completely immoral.

    But reality is worse – the corporate institutions mean they cannot consider what they think may or may not happen in the long term.

    In the first case, the immoral person, there is a (theoretical) hope they will either realize the immorality or at least realize, “no, I WILL be among the dead, or someone I know/love”

    In the second case, it doesn’t MATTER even if they open their eyes – because only short term profit maximization matters, and if they don’t go along with it, they will be replaced.

    The second situation is much more dangerous.

    We need to replace the machine, the institutions, the corporate global economy, not merely to “get rid of really really bad people at the top” – if you do the second and not the first (even if you succeed) the machine continues the omnicide. See Alternatives to Wall Street project in username link

  20. jcwinnie says:

    Because God is Money