Exxon Makes Billion-Dollar Bet Climate Change is Real, Here Now and Going to Get Worse But Keeps Funding Deniers

Hard-core deniers assert that the current warming is just part of a natural cycle.  Joe Bastardi, for instance, in a Climate Progress comment, absurdly predicted that “the earth will cool back … to levels we saw in the late 70s, and the [Arctic sea] ice will increase back to those levels in the N hemisphere.” Not.

The cynical, climate-destroyers at Exxon, however, are placing a massive bet that global warming is real and that the Arctic will keep warming — even as they keep funding deniers to obfuscate the science and block action (after they publicly stated they would stop such funding).

Below is a guest post by Christopher Jones on this subject.  Jones is a Ciriacy-Wantrup fellow at the University of California-Berkeley.

Exxon’s Climate Admission

by Christopher Jones

This just in: Exxon Mobil has made a multi-billion dollar acknowledgement that climate change is real and is happening now.

Don’t hold your breath waiting for them to admit this, though. Exxon would like you to believe that climate change is neither real nor urgent. That is why they have spent millions of dollars over the last several years funding climate skeptics and fighting legislation that would regulate the emissions of greenhouse gases. When you hear climate skeptics speak, there’s a good chance that Exxon money is in their pocket.

Actions, however, speak louder than words. And Exxon’s most recent action was a thunderclap. According to reports, Exxon has just signed an extensive deal with Rosneft, the Russian state oil company, to develop promising offshore oil and gas deposits in the Arctic Ocean. The companies will begin by investing $3.2 billion to explore in the Kara Sea, with the potential of increasing the investment to $500 billion in the future. Exxon is so convinced of the potential of these sites that it is giving Rosneft ownership rights in several of its global properties to complete the deal.

Large deposits of gas and oil have been known to exist in the Arctic Ocean for decades. So why did they make this deal now? One key thing has changed: the arctic ice is melting rapidly. The Kara Sea has typically been covered by ice floes nine months of the year or more, making commercial development of its resources unprofitable. But for the last several years, the extent and duration of the arctic ice has been diminishing, a phenomenon the vast majority of scientists believe to be caused by climate change. Suddenly, oil and gas exploration in the Arctic Ocean is looking far more attractive. Exxon has realized that a warming planet offers some new opportunities for profit and is adjusting its strategic decisions accordingly.

Exxon is not the only big oil company whose actions show it believes climate change to be real. British Petroleum made a major play for developing the same resources several months ago, but the proposed deal was rejected by a coalition of BP’s other Russian business partners. Not only does big oil know climate change is happening, it is planning its future around it.

That does not mean Exxon is likely to publicize this knowledge. Despite issuing a tepid statement acknowledging anthropogenic climate change in 2007 and promising to cease funding anti-climate change groups in 2008, Exxon remains up to its old tricks. Freedom of Information Act requests have revealed a continued pattern of funding for climate skeptics as well as collaborations with the conservative Koch Industries to support legislation that removes any restrictions on carbon emissions.

We should no longer be distracted by these words. Exxon is a smart and savvy company, and even if its actions are reprehensible, they make sense in a political system that allows corporations to pay millions of dollars to avoid costly regulations. Blaming Exxon for these activities is like blaming a raccoon for going through your trash. They’re simply responding to available opportunities.

This is exactly why we should focus on actions, not words. This deal is a multi-billion dollar investment predicated on Exxon’s belief that the planet is warming. It is one of the most powerful admissions of the reality of climate change imaginable. Michele Bachmann and the other Republican presidential candidates cannot blame this on disconnected academic scientists or members of a liberal conspiracy. This is the embodiment of free market American capitalism saying climate change is real.

All this begs the question: If Exxon Mobil believes climate change is worth acting on now, isn’t it time for the rest of us to follow suit?

— Christopher Jones is currently writing a book on the history of energy transitions.




35 Responses to Exxon Makes Billion-Dollar Bet Climate Change is Real, Here Now and Going to Get Worse But Keeps Funding Deniers

  1. prokaryotes says:

    When does the denial from EXXON, KOCH & Co, stops?

    Why is nobody pulling the plug?

  2. Peter Mizla says:

    The Media is just as much to blame. Profits may suffer darling, its that simple. We live in a Plutocracy.

  3. Mark Shapiro says:

    The simple facts that Professor Jones outlines here are important and valuable because:

    1) Investments are long-lasting and they will literally become visible as Exxon builds their Arctic facilities, and

    2) Everyone knows that actions speak louder than words.

    Thanks for this post. It provides permanent rhetorical ammunition.

  4. Interesting Times says:

    Also see this: They Know But Won’t Admit: How Oil and Gas Companies are Adapting to Climate Change

    In one of most ironic flip-flops in environmental history, the oil and gas industry is beginning to adapt to climate change. And it’s no wonder. The majority of industry’s infrastructure is located in some of the most climate vulnerable regions on the planet…Now the very industry that publicly denies the very reality of climate change, is looking to climate experts for help. They cooperated with consultants who analyzed oil and gas industry’s ability to absorb impacts from a changing climate. The resulting report was a terse assessment showing that the oil and gas industry was far behind the climate action curve…Finally, the consultants recommend the industry incorporate climate change science into operations. It is this last point that I find most ironic. Like the snake eating its own tail, will oil and gas realize they’re their own worst enemy?

    Perhaps, deep down, they do, which could help explain this:

    Exxon Mobil Corporation and Synthetic Genomics Inc. (SGI) announced the opening of a greenhouse facility today enabling the next level of research and testing in their algae biofuels program…ExxonMobil researchers are using the facility to test whether large-scale quantities of affordable fuel can be produced from algae.

    Synthetic Genomics, by the way, is a company founded by genetics expert Craig Venter, best known for “being one of the first to sequence the human genome and for his role in creating the first cell with a synthetic genome in 2010.”

    So could this whole thing really be the ultimate case of trying to have your cake and eat it too?

    “Mwahahaha, we will continue funding climate-change denialists in order to keep the Arctic melting so we can plunder its resources on the cheap, and then, when we can’t do that anymore and climate change is so bad no one can ignore it, we’ll swoop in and save the day with our miracle CO2-sucking-O2-shitting biofuel algae!”

  5. prokaryotes says:

    Maybe Exxon bets they could geoengineer the climate? Fossil fuel companies are on path to create a major blow to the climate system.

    They have also taken a position which can only be described as total out of control. They act ignorant, they conspire to deceive the public opinion, they act irresponsible with our all and future generation well being and reveal the minds of the sociopath, oil companies are totalitarian risk takers.

    Which can no longer work. Oil companies must change their portfolio.

    The arctic adventure will not work, because of the turbulence, created from melting polar regions.

  6. Edith Wiethorn says:

    “Exxon is a smart and savvy company, and even if its actions are reprehensible, they make sense in a political system that allows corporations to pay millions of dollars to avoid costly regulations. Blaming Exxon for these activities is like blaming a raccoon for going through your trash. They’re simply responding to available opportunities.”

    Professor Jones sounds resigned to a Machiavellian end-game for the planet. Machiavelli simply reported on what he saw, not on what he advocated. I want CP to advocate for precise language, in support of precise thinking. I like the racoon metaphor a lot as amusing, but whereas a racoon is foraging for food, corporations are people, as “Mushy Mitt” has noted, to scoffing that has surprised me. The history of human civilization is about people looking out for the common & higher good. The people behind some public corporations do look out for the common & higher good.

  7. A J says:

    Because it’s in the interest of many to keep XOM’S far-reaching tentacles healthy. As the API is fond of reminding us, many people have oil companies in their 401Ks and mutual funds, and at the same time they want their cheap gas. Barring a complete political turnaround and actual international cooperation on pricing carbon, we’re just going to keep digging.

  8. Jay Alt says:

    Many major oil companies now pour hundreds of millions into biofuel research and pilots. I know of a research assistant on a project who can’t bring himself to acknowledge any connection between his work and climate change. In his mind he works to get the U.S. off oil, assure supply, bring down the price. All suggestions that ecologic, human or justice issues could also play a role is mushy thinking and promptly mocked. BP pays for his education; they’ve accepted AGW as a challenge since before Kyoto. His thought processes are very well compartmentalized.

  9. Interesting Times says:

    To say nothing of the inevitable methane outgassing. But yes, as I said above, Exxon must be betting they can geoengineer the climate – why else would they be funding Venter’s ventures?

  10. prokaryotes says:

    Sensitivity of temperature and precipitation to frequency of climate forcing: Doug MacMynowski

  11. prokaryotes says:

    Giant Bubbles Could Sink Ships

    Methane bubbles from the sea floor could be responsible for the mysterious sinking of ships in areas like the Bermuda Triangle and the North Sea, new Australian research confirmed.

    Computational mathematics honors student David May and supervisor, Professor Joseph Monaghan of Monash University in Melbourne, Australia, reported their research in the American Journal of Physics.

    Their modeling suggests that giant bubbles are much more likely to sink ships than previously thought, adding new weight to warnings about ships traveling in areas where bubbles are likely to be.

    And now think where bubbles are likely “first” to occur – in the perimeter of the borehole.

  12. Belgrave says:

    Does anyone else know anything about this item from RIA Novosti news agency? (sorry, I’m new and haven’t figured out how to put in hyperlinks yet).

    Briefly, Semiletov et al set off about a week ago from Vladivostok on a seemingly hastily arranged expedition “following the discovery of a dramatic increase in the leakage of methane gas from the seabed in the eastern part of the Arctic”.

    The expedition is to last 45 days so we should get a preliminary report in a couple of months. I’ll be looking out for it.

    Interesting times indeed!

  13. prokaryotes says:

    Linking arc volcanic fluxes and growth rates with Pleistocene climate change: Marine tephrostratigraphy of the Aleutian‐Alaska volcanic arc

    ..glacially induced volcanism, triggered by the depressurization of the upper mantle increased the frequency of volcanic eruptions worldwide.

    On a more immediate scale, Tuffen (2010) concluded that ongoing glacier recession likely will result in intensification of eruptions worldwide, with a corresponding increase in associated hazards.

  14. Sasparilla says:

    Mark, so well said.

    I am PDF’ing it and saving a direct link for future use as well.

    A great article by Mr. Jones.

    As to the question by some other commenters of how long Exxon can do this, the answer is easy, for as long as they can. If humanity is going to hang itself, its going to be a US fossil fuel CEO that is selling the rope…as we’re literally seeing.

  15. Steve O says:

    Taking the devil’s advocate view.
    Just because Exxon is investing based on Arctic melting does not mean they accept the concept of anthropogenic warming. It still could just be a “natural” (read “magic”) cycle.

  16. Mulga Mumblebrain says:

    Exxon is simply a symptom, like Enron, or Goldman Sachs, or Monsatan or News Corpse, of the underlying disease-capitalism. If these organisations did not commit their life destroying activities, some other capitalists would. The thing about capitalism that we must fear is it insatiability. No matter what the cost in ‘externalities’ like dead people, extinct species, rapid climate destabilisation or biosphere destruction, if life can be converted into the dead stuff of money, and the amount garnered constantly increased, then there will always be a conscienceless capitalist to push on and do it. A cult where the only value is gain, where all other human impulses are derided and denigrated and their advocates vilified or worse, is exactly akin, I would say, to the neoplasm, that goes on growing and converting living tissue into malignancy and necrosis, until its host, and it, die. And we are at the end-stage of global cachexia, right now, as the human metastases infiltrate every cell of the planet’s being.

  17. bratisla says:

    Oil companies also invest in CCS. Same scheme : deny climate change, then when the situation will become dire come like a saviour with a “magic solution”. Of course, since the situation will be dramatic, they will ask for lots of money and little regulation so that they can pump hastily (and dirtily) CO2 into the ground and rake huge profits.
    They already push for industrial projects even though the experimental pilots did not give their conclusions yet. And they also lobbied (and still lobby) European Union and countries to reduce the probation time.

    Only a denier can deny oil companies are toying with them. On Desmogblog a denier compared himself to Joan of Arc – never a comparison was so unintentionnaly true …

  18. Joan Savage says:

    Although I can usually handle inference, your link on vulcanism is more than a leap from the report of increased Arctic methane increase. Thawing of the Arctic is the more probable cause for methane release, so what is the connection that you want to make here to vulcanism?

  19. Joan Savage says:

    I’m inclined to agree. Large corporations habitually spread their risks and move early on windows of opportunity. There doesn’t have to be a conceptual world view or ideological commitment behind it. Hedge funds and futures show that business can be utterly cynical about how to make money, even to “betting against itself.”

  20. Joe Romm says:

    But then the ice could cycle back as Bastardi says.

  21. Joan Savage says:

    More on the Exxon- Rosneft deal:
    “Under the agreement, the two companies will together invest $3.2bn in exploring the Arctic Kara and Black seas. They also plan to invest $450m in a St Petersburg-based research centre. The three offshore blocks in the Russian Kara Sea are the same ones that Rosneft planned to explore with BP.”
    -Financial Times August 30, 2011

  22. geekwrench says:

    This is not a bet on global warming. someone needs to do their research, or at least watch an episode of Ice Road Truckers. New technology is being used to pull oil from under ice. It wont matter if its melted or not. So sad that neither side ever shows the math.

  23. John McCormick says:

    Mulga, if James Lovelock were to incorporate your thinking in his writing he would be even more valuable. His Gaia is dying because, as you say, the capitalist disease is killing it.

  24. I don’t see this as inconsistent for Exxon. It has funded a campaign of denial mostly targeting claims of anthropogenic global warming. To invest in these northern projects, and in turn acknowledging global warming is happening, isn’t an admission that this is being caused by humanity. In Exxon’s view, it is merely looking to profit on a climate trend that, despite the misery it will bring to humanity, is out of humanity’s control.

    For that reason, Exxon in still firmly entrenched in the denial camp.

  25. prokaryotes says:

    Joa Savage the connection is the ice melt and hazardous implications. Which could affect oil exploration too.

    “..glacially induced volcanism, triggered by the depressurization of the upper mantle increased the frequency of volcanic eruptions worldwide.

    On a more immediate scale, Tuffen (2010) concluded that ongoing glacier recession likely will result in intensification of eruptions worldwide, with a corresponding increase in associated hazards.”

  26. Joe Romm says:

    Try again.

  27. Christopher Jones says:

    Machiavellian? Perhaps. But it is critical to look at the structural forces operating in the world. While I wouldn’t deny that many Exxon employees are good people with good intentions, they live in a economic context in which maximizing shareholder value is not necessarily aligned with protecting the ecosystems that sustain human life on Earth. If you create a political/economic structure in which the two are aligned, then maybe you’re getting somewhere. But intentions on their own will not be enough to solve this problem.

  28. Christopher Jones says:

    It’s not just drilling through ice that’s the problem–you need to get people and materials to these platforms, you need to repair and maintain them, and you need them to avoid getting crushed by ice flows. While there may be a few recent technological advances that help a bit, melting sea ice is a far more significant factor in making these deposits commercially viable.

  29. Lollipop says:

    Yes, I think, based on conversations with many friends, that that might be the most alarming news story in long time. I think many are waiting with baited breath for that report.

  30. steve says:

    Talk about subsidies!

    If it weren’t for global warming development of those fields would cost a fortune to develope due to the ice cover. But Exxon etc have figured out that they can simply have GOVERNMENT PROJECTS FUNDED BY TAXPAYER DOLLARS deal with the worst aspects of their product, and – voila! – the ice will cease to be an impediment to even still more record profits.

  31. Joan Savage says:

    An article on Arctic oil development’s threat to wildlife preserves in Russia mentions that the three Arctic Kara Sea blocks have an estimated 60 billion barrels.

    Doesn’t that volume alone suggest that Exxon and Rosneft plan a long term presence in the Kara Sea?

    I’ve yet to see a Bastardi or other ‘natural cycle’ forecast that pins down a time period when global cooling is supposed to occur.

    I would not be surprised if the ‘natural cycle’ forecast (if there is one) accommodates oil companies staying in the Arctic for decades.

  32. Greg says:

    Not to mention that Exxon, by playing its fellow deniers for fools, cuts out a lot of the competition for these investment oopportunities.

  33. Dan Borroff says:

    Professor Jones: You’ve pegged the situation we’re in. Publishing a book is wonderful.

    We’re still doomed, until a significant someone or a significant number of influential people embrace Professor Chip Heath’s simple methods for propagating the message and the core values of your message.

    Chip Heath’s at Stanford. He knows how your message can be propagated widely. He probably knows how to accomplish this better than almost anyone else on the planet.

    He’s just across the Bay from you. If you need an introduction (not likely) let me know. I’ve got the “two degrees of separation” link to him.

  34. Sid Plait says:

    Oh my! The evil empire sees an opportunity they created to make things worse through their own greed. It’s too bad they, the individuals making these decisions, won’t live to see the Earth choke and humanity die a horrible death, since that’s really what they deserve.

    Well written, Chris!