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Exxon’s Dangerous Energy Outlook

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"Exxon’s Dangerous Energy Outlook"

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by Lorne Stockman, via Oil Change International

ExxonMobil recently issued its latest global energy projections in a report called the “2013 Outlook for Energy: a view to 2040.”

The report (pdf) is chock full of figures and graphs showing an inexorable rise in global energy demand and supply, as well as the growing market for Exxon’s products.

As can be expected, the report shows that despite some recent efficiency gains, the world is on course to consume ever growing amounts of energy, a large proportion of which will likely be derived from fossil fuels. Exxon places global growth in energy demand at 35% between 2010 and 2040.

In this regard, the report is in line with recent business-as-usual forecasts from the International Energy Agency (IEA) and the U.S. Department of Energy’s Energy Information Administration (EIA).

But the report differs greatly from the IEA’s report in some vital areas. The IEA is a public agency, funded by the tax dollars of developed countries including the United States, while Exxon is the world’s largest private oil and gas company, with a self-interested agenda behind every public communication it makes.

It’s perhaps no surprise that the Exxon Outlook fails to mention that if energy demand were to rise 35% to 2040, and if 60% of energy demand in 2040 were to be met by oil and gas as Exxon predicts (the IEA has it at 50%), then the planet would be on an unstoppable collision course with a 4 degree Celsius warmer world. While the IEA’s report was very clear about where current energy demand trends will lead it was also clear that this could be avoided if serious action is taken soon.

Our collision course with a 4 degree world was recently highlighted by the World Bank, a relatively recent convert to the urgency of climate change action that still needs to match its actions with its words. On the release of a recent report called Turn Down the Heat, the Bank’s President Jim Yong Kim said:

“A 4 degree warmer world can, and must be, avoided – we need to hold warming below 2 degrees, (…) lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today. Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.”

But while Exxon produced some figures for greenhouse gas emissions and reported that they may peak in the 2030s (which would be catastrophic, as emissions need to peak before 2020) it offered no indication of whether it was concerned or indifferent to the consequences of these emissions. Of course, the purpose of the Exxon Outlook is not to advocate for change that would benefit society but to bolster support for Exxon’s business plan.

The history of the public version of Exxon’s Energy Outlook, documented in Steve Coll’s excellent recent book on the company, Private Empire, shows how the public presentation of the Outlook has always served the company’s public relations and lobbying agenda.

The Outlook was an internal-only document for many years. But according to Coll, in 2004 Exxon’s then CEO Lee Raymond, together with his (still in place) vice president of public and government affairs Ken Cohen, envisaged a greater role for the “tsunami of color-coded pie charts, bar graphs and global maps, read out unemotionally by executives wearing dark suits.”

With global oil prices rising, George W. Bush’s White House was awash in anxiety over dependence on Middle East oil and Bush himself was curious about Exxon’s interest in alternatives like hydrogen fuel cells.  In April 2005, Raymond and his team presented the Outlook to a top Bush adviser at the White House and convinced him to set up a series of briefings with White House staff.

The aim of the Outlook, as it was presented then and is still presented now, is to dispel any notion that there might be a clean energy future lying ahead. As the global population rises — increasing wealth in emerging economies — the energy these would require can only be met by increasing supply of fossil fuels, according to the figures. Exxon does not dismiss renewable energy and efficiency completely, but maintains that they will not challenge the continued dominance of fossil fuels, particularly oil and gas, in the time frame.

Back in 2005, the timeframe stretched to 2030. Today the timeframe stretches to 2040. But the overall conclusions remain the same.

Following the success of the 2005 White House staff briefings, Exxon began to present the Outlook regularly to governments, NGOs, and the media. Slides from the Outlook began to appear in presentations to investors.

One British NGO director, quoted in Coll’s book, noted the change in Lee Raymond’s presentation, but not the substance in what he was saying:

“I note that Raymond is no longer seeking to gainsay the science behind climate change. (…) Instead he simply predicts an endless rise in the demand for the fossil fuels his company sells, and maintains that there is nothing that can be done to alter that.”

Over the next few days you may frequently see the media, particularly the business media, repeat the findings of the Exxon Energy Outlook and discuss it as a forecast for the need to surge oil and gas investments.

You’re probably less likely to see coverage of another report published this week that documents the growing investments by Fortune 100 companies (Exxon aside), in renewable energy and efficiency technologies that are helping to reduce emissions and fossil energy price volatility.

The Exxon Energy Outlook is no forecast. It is an outlook, Exxon’s outlook, and what it envisages is an energy future we cannot afford.

Lorne Stockman is a Research Director at Oil Change International. This piece was originally published at Oil Change International and was reprinted with permission.

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18 Responses to Exxon’s Dangerous Energy Outlook

  1. Merrelyn Emery says:

    You can call it an ‘outlook’ but it is actually a marketing brochure, ME

    • Superman1 says:

      It is actually a reflection of reality. There is no evidence at this point in time that the USA electorate, and probably the electorate in most advanced and developing countries, are willing to do what is necessary to limit climate destruction.

      My reading of Kevin Anderson’s papers, especially if one adds in the positive feedback mechanisms his computations do not include, is that the atmosphere contains enough CO2 to drive us to 2 C, even if we add no more CO2 through fossil fuel combustion. He views anything past 2 C as ‘Extremely Dangerous’, and in fact states that even 2 C is quite Dangerous.

      So, if we wanted to take a shot at limiting temperature to 2 C, we would essentially have to forego fossil fuel use FOR ANY REASON for the next three or four decades, until we start on the downslope of the temperature-time curve. It would mean we would have to live like the Pennsylvania Amish or perhaps even the indiginous Native Americans for decades, at a minimum. It would mean, under the present form of economy, a worldwide Depression of unimaginable proportions.

      We had a recent election where the incumbent almost lost because the ~ two percent GDP growth was half what the challenger promised. How do you think GDP decreases of ~ten percent or more would fare with the electorate?

      I don’t see a plausible way out of this predicament; do you? And, I think Exxon is spot on in their forecast. They are like the Mexican drug cartels; they know their ‘addicted’ customers North of the border will always be coming back for more, no matter what types of Wars on Drugs the government pursues.

      • Merrelyn Emery says:

        Fact: Your election wasn’t even close despite the propaganda.

        And don’t judge others by yourself – N. America sticks out as the tide of concern and action has turned elsewhere. Will it be enough? Nowhere near it but ExMob knows there is a war going on out there in hearts and minds and is fueling it in more ways than one, ME

        • Superman1 says:

          “N. America sticks out as the tide of concern and action has turned elsewhere.”

          Hmmm. From what I read on these pages, Australia, Canada, and UK are not all that different where the ‘rubber meets the road’.

          • Merrelyn Emery says:

            I included Canada in N. America. Don’t know specifically about UK but Aussies pay much higher petrol prices and are increasingly cutting their driving. We have had a majority of small cars for yonks and where I live, charging stations are being installed across the city, plenty of hybrids, bikes etc, nobody has heated their home with oil since mid 1970s and lots of people buy green energy. Then there’s the carbon price etc, ME

  2. Rabid Doomsayer says:

    A recipe for a rate of change that a large proportion of the biosphere will not be able to cope with.

  3. fj says:

    Business as usual in these rapidly changing times is not rational.

  4. Jack Burton says:

    Emissions may peak in 2030? “May” is the key word. I “may” strike a rich vein of gold in my backyard when I dig a drain tile ditch next summer to drain off the increasing extreme rain events we have been having the last five year.

    • Mark E says:

      The more important factor is atmospheric ppm. Right now, around half of emissions is sucked up by the ocean, like a big sponge. By 2030 it may be saturated, leaving ALL of emissions in the atmosphere. Add outgassing from existing sinks due to forest dieback, microbial decay in the circumpolar regions, and releases of trapped geo- and bio-genic methane….. nice to hear Exxon thinks that THEIR emissions might be reduced by 2030, but that entirely misses the point.

  5. John Paily says:

    Human survival now exists in understanding energy and its efficient use. We need to look at life and invent and develop new resources of energy and develop technologies that release less heat into the environment. We need to understand the principle and design on which earth works to sustain the energetic state of the system. The only way humanity can survive and live in harmony with earth is to know the principle and design on which she functions. We need to evolve in our knowledge of Nature and know her Truth. Some organization or media should bring out the principle and design on which earth works so that the world awakens to come to new order and understanding of nature http://www.scribd.com/doc/114273537/Climate-Change-and-Its-Relation-to-Energy

  6. D. R. Tucker says:

    On The Green Front today we’ll meet the man behind a move to get President Obama to hold an emergency climate summit during his first 100 days in office—Bob Doppelt is Coordinator of the National Climate Ethics Campaign. That as Senator Barbara Boxer announces she’ll convene a Climate Caucus in 2013. We’ll hear what climate change is doing to the ski and winter tourism industry from the NRDC’s Laurie Johnson and new technology that makes it possible to assess the solar potential and cost estimates from your computer. David Levine is the CEO of Geostellar, launching today in three regions of the country!

    Read more: http://prn.fm/2012/12/12/green-front-climate-ethics-121212/#ixzz2Et05rMK5
    Under Creative Commons License: Attribution

  7. Ozonator says:

    I don’t believe that it is a coincidence that the only oil company to be caught doing anything wrong in years was British Petroleum. (The British just got one of their banks caught for laundering money still not Wall Street.) And yet the Brits are our best friends in war and on PBS. Still marking his territory with AGW, ExxonMobil CEO Rex Tillerson says people will be able to adapt which can’t be taught in Red States and Michigan’s grass carp Senate.

  8. David Smith says:

    Where does Guy McPherson fit into this discussion. Is he cherry picking all the worst case data or is he telling it like it is, a guy with nothing to loose? I listened to the recent EcoShockRadio program that featured him. What he says is truly frightening.

    • Superman1 says:

      Thank you for the pointer; I just listened to his presentation. I don’t know that he is saying all that much different from e.g. Kevin Anderson or other straight-talking climate experts. The base case that all the recent studies produce excludes feedbacks. In the base case, for business as usual, we can expect about 4 C by mid-century and perhaps 6 C by end of century. I suspect whether those numbers are 3 or 4, or 6 or 7, makes little difference; they are catastrophic beyond imagination.

      But, far less than 4 C will produce feedbacks of one type or another. There are at least three types of feedbacks I can envision: physical feedbacks, economic feedbacks, sociopolitical feedbacks. McPherson identifies six major physical feedbacks (Arctic methane, etc), and Lewis Cleverdon, on this blog, has identified six major feedbacks as well. As the global temperature increases, the likelihood of triggering and accelerating physical feedbacks increases. At some point, depending on the amount of reserves of the feedback material and its rates of release, the feedbacks can spiral out of control, and we could get ‘runaway’ temperature increase. The problem is, without detailed models of these feedback effects, no one really knows where this ‘point of no return’ is located. McPherson has been willing to go out on a limb more than people like Anderson, so his comments sound more apocalyptic. That’s not saying he is wrong, but the evidence is not in that he is correct. What I can’t understand is why the climate modelers cannot include these feedback phenomena in their models, at least for purposes of approximation. I used to do fluid dynamic modeling at higher speed regimes, and we would not think of excluding important real-gas phenomena, such as dissociation, ionization, radiation, etc, even though we didn’t know the exact functional relationships.

      Tim Garrett and others have examined economic feedbacks. They link the cornerstone of the modern economy, consumption, to fossil fuel utilization, and believe that drastic reductions in fossil fuel use will require collapse of the modern economy. That’s probably correct, and may be the main reason that there is almost zero support for the measures required to decrease CO2 emissions to sustainable levels. Who’s going to vote for major global Depression, when in the last USA Presidential election the incumbent almost lost because the few percent GDP growth was viewed as insufficient by the challenger?

      Additionally, one characteristic of climate change is the increased frequency of what were once considered ‘extreme’ events, as Hansen showed in a paper this year. ‘Extreme’ events are significant because they usually are accompanied by a significant price tag, both in human lives and economic losses. If the frequency of these events continues its drastic increase, at some point the economic losses are going to overwhelm any real GDP increase. Obviously, GDP could still increase due to reconstruction of destroyed property, as will happen as a result of e.g. Sandy, but this is not GDP increase that will result in any ‘standard of living’ increase. So, economic feedbacks have the potential to change ‘business as usual’, but how specifically I’m not sure.

      The final feedback, sociopolitical, may be the most significant. As food shortages, stronger storms, increased droughts, overwhelming heat waves, begin to accelerate, it’s not clear how chaos can be avoided and order maintained. It’s almost like the days of the Weimar Republic in Germany. The electorate may turn to ‘strong’ leaders to maintain order, with unforeseen consequences.

      The bottom line is that I find it hard to believe that we will continue along with the temperature increases listed in these recent reports without some massive behavior alterations occurring. But, I don’t see how they will happen by democratic means. To meet Kevin Anderson’s real targets of limiting CO2 emissions to maintain quasi-acceptable temperature increases (~2 C), the global population would have to live like the Pennsylvania Amish or perhaps even the indigenous Native Americans for three or four decades at least. Who is going to vote for that change in standard of living?

      I will end with a metaphor, which really shows the problem. One hundred people are sentenced to jail for twenty years. They are confined to one large room, with relatively close quarters, a low ceiling, and almost no ventilation. Ninety-eight of them are three pack a day smokers, and the other two are non-smokers. Five of the smokers are ‘deniers’, and two of those five own the cigarette concession.

      Ninety-three of the smokers recognize the dangers of smoking, but are too hooked to quit. The two non-smokers recognize the dangers of smoking, and also recognize the dangers of inhaling second-hand smoke. The two non-smokers talk about the dangers of smoking, but no one changes their habits. The two non-smokers take a poll, where sixty smokers say they would like to quit, but none reduces their smoking by even one cigarette. The two non-smokers ask their elected leader to show strong leadership in reducing smoking; the leader replies he is powerless to act without popular support.

      After two years, three of the smokers have died from lung cancer. The ‘deniers’ say people have been smoking for thousands of years, and no one has died prematurely from smoking; they died when their time came. The ‘deniers’ say the three dead smokers died from ‘natural causes’. No matter what the two non-smokers try to change the environment, they run up against a stone wall. That’s where we are with man-made climate change today, and that’s why there is little hope of the problem being solved in the real world.

      • David Smith says:

        Thanks for the detailed response. While many are affraid that an appathetic majority will go from a state of ignoring AGW to one of hoplessness, Maybe the socio-political feedback of panic would provide the “Pearl Harbor” type event necessary for the massive mobilization needed to begin to deal with AGW.

  9. Dredd says:

    It is not likely that anything other than criminal prosecution will deter those bent on destroying civilization.

  10. yt75 says:

    What would be important is to mention that this report is simply a bunch of lies as to what is possible.
    What would be also important especially for the US, is to know that they went through their oil production peak in **1970**, at 10,5 millions barrels day, now around 6,5, and that no single serious petroleum expert believes it will go back up to 70 level.
    Knowing that the US 1970 peak was the basic reason of the first oil shock, and not the little song “arab embargo” would also be a good thing, too bad James Akins died 2 years ago, see his interview in second part below for instance (unfortunately dubbed) :
    http://iiscn.wordpress.com/2011/05/06/bataille-et-lenergie/