Watching the same pack of oil executives troop to the House of Representatives today and the Senate yesterday was mostly a deja vu experience. The execs’ canned testimony was from the same outline they used earlier this year and in 2005 and 2006
hearings–high prices aren’t our fault; everything will be better if
you let us drill in the Arctic and off the California coast; don’t you
dare touch our tax breaks. Only the numbers change, continuously for
the worse. Today brought the added nonentertainment of a House hearing
to question federal Energy Secretary Samuel Bodman, arguably
the most boring and inactive member of President Bush’s cabinet. He
hewed straight to the oil company line: prices are just supply and
demand; there’s no speculation driving the price of oil; there’s no
reason to sell oil from the federal reserve, even though Bill Clinton
did it in 2000 and prices fell. Bodman’s statement about the
"globalization of energy" sounded straight from a Chevron ad.
most unexpected statement in the two days of hearings came from Shell
President John Hofmeister, who allowed that his company could turn a
profit on oil at $35 to $65 a barrel. Here’s the Senate exchange:
With light, sweet crude for July delivery soaring $4.19 a barrel
Wednesday to close at a breathtaking $133.17 on the New York Mercantile
Exchange, and gas prices — according to AAA — averaging nearly $3.81 a
gallon nationwide for regular, lawmakers wanted to know where the oil
executives thought oil prices should be.
Shell’s Hofmeister said a price range of $35 to $65 a barrel would be consistent with "our ability to run a successful company."
But Chevron Vice Chairman Peter Robertson argued a company can’t
produce oil from the kind of areas now available to them for that kind
of price. And ConocoPhillips’ Lowe argued that price would be north of
$90 a barrel.
Hofmeister, the first to answer, spoke an insiders’ truth. After
all, the same companies made record profits in 2005 and 2006, when oil
was exactly within that range.
The shareholder revolt against Exxon is going global. Four big institutional investors in Britain have joined a shareholder resolution demanding that Exxon have an independent chairman of the board, and the new support should bring the chance of passage to about 50-50. Currently, the chairman title is just another perk for CEO Rex Tillerson, whose attitude is from aloof to hostile about renewable energy and climate change. Exxon faces numerous shareholder rebellions at its annual meeting May 28 in Dallas. Another significant one by pension funds and other large investors seeks to fire board member Michael Boskin for ignoring the investors’ multiple requests for a meeting on climate issues.]]>
Oh, man, I wish I had a share of Exxon. The shareholder meeting May
30 is going to be a show. A group of big institutional investors,
mostly public pension funds, has filed notice that it will formally campaign to oust board member Michael Boskin. The investors say he refused repetedly to
even meet with them about developing a corporate climate change policy.
How dumb can a company get, refusing to sit and talk with its biggest
These trillion-dollar investors have been pushing the company
for a couple of years to develop a climate change policy and make it
part of Exxon’s business plan. No luck. Now they’ve stepped up the
action. An SEC filing disclosed today
by Exxon consists of a letter the investor coalition is sending to
shareholders, listing the reasons Boskin should be ousted.
group last year announced it would withhold support for the reelection
of Boskin, who was reelected despite the nonvoters. A resolution
demanding that Exxon do more on climate change, however, garnered a surprising 31% shareholder vote.
This year’s communication by the big investors to other shareholders appears to be turning up the heat a substantial notch.
shareholder letter is in the name of Connecticut state Treasurer Denise
Nappier, on behalf of other big investors. In the past, the climate
change group has included California State Teachers Retirement System
(CalSTRS), the California state employee benefit fund (CalPERS),
Management Ltd., Illinois State Board of Investment, New York City
Employees Retirement System, New York State Common Retirement Fund, the
California, Connecticut, Maine, Maryland, North Carolina and Vermont
State Treasurers, labor funds such as SEIU and AFSCME, and a dozen
This year, the effort to demand a climate change policy at Exxon has been joined by the Rockefeller family,
descendants of Standard Oil/ExxonMobil founder John D. Rockefeller. It
is not clear from the letter whether they are joining the effort to
04-30-08 by simpson
What’s known as America’s First Family of Oil, the Rockefellers, wants Exxon Mobil, the oil giant descended from John D. Rockefeller’s Standard Oil, to change it is ways. They’re worried the company doesn’t care enough about the environment or developing alternative energy.
Forbes quoted Neva Rockefeller Goodwin, a great-granddaughter of John D. Rockefeller: "The truth is that Exxon Mobil is profiting in the short term from investments and decisions made many years ago, and by focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations."
The Rockefellers are backing four shareholder resolutions that will be voted on at the company’s annual meeting May 28. They held a news conference in New York Today to support the resoultions that would require Exxon to:
According to Reuters, Goodwin, a Tufts University economist, called on Exxon to reconnect with the forward-looking vision of her great grandfather.
"Kerosene was the alternative energy of its day," Goodwin said. "Part of John D. Rockefeller’s genius was in recognizing early the need and opportunity for a transition to a better, cheaper and cleaner fuel."
It’s certainly true that under Tillerson, Exxon has focused almost single-mindedly on oil. An outside chairman just might bring a new perspective.
And unlike many good shareholder resolutions this one may have a shot at passing. Last year it received 40 percent of the vote and that was without the public endorsement by the Rockefellers. Sadly if it does win shareholder approval, nothing may change. The resolution is advisory and the board can do whatever it wants.
The headlne today seemed promising: "Bush Voices Concern About Record Oil Price." It’d be a step forward from a president who recently said he’d never heard a thing about $4.00-a-gallon gasoline. Then I read the whole story, twice. Bush’s only idea for fixing things was to open the Alaskan National Wildlife Refuge for oil drilling. The presidential candidates ought to be leaping forward to set Bush straight on the complete uselessness of his answer. Here’s an EZ kit of useful responses, even aside from the obvious environmental damage:
So Bush is suggesting something that not only won’t do a thing about oil prices, it is yesterday’s impossible oil company demand, not today’s.
Sen. McCain, Sen. Clinton and Sen. Obama have all laid out some sort of energy policy, but they are low on detail. None of them, for example, calls for regulation of gasoline supplies on hand, to stop refiners from cutting back production and gaming supplies to keep prices rising (as they’re doing right now). Candidates should be yelling like crazy about speculation in oil markets. But at least they’re not saying "drill ANWR" as the solution to today’s oil and gasoline crisis.
When I look at oil company profit reports–which will soon reveal truly rabid profit increases in the 1st quarter of 2008–I just ignore the line on "alternative energy" spending. That’s because it is often the opposite of renewable energy. Mother Jones magazine’s latest issue has the perfect description of why:
"Across the board, the companies that control fossil fuels have begun
to respond to rising concern about global warming with what amounts to
a three-point strategy: First, make small overtures toward developing
renewable energy, and milk them for maximum PR value. Second, invest
more generously in carbon-based "alternative energy" that gets passed
off as green. Third, invoke the goal of energy independence to pump,
mine, transport, and sell more and more of the same old fuels to an
"One of the slipperiest tactics involves redefining what constitutes
clean energy. In a 2006 report, the oil-industry-friendly Institute for
Energy Research said that U.S. oil and gas companies had invested $98
billion in "emerging energy technologies" in North America from 2000 to
2005. But the vast majority of this funding went to develop "frontier
hydrocarbons"—new, often filthy methods of producing more oil and gas.
In fact, a report from the Center for American Progress found that
between 2001 and 2007, a period of unprecedented profits, the top five
private oil companies spent an average of just one-half of one percent
of total profits on renewable fuels. (BP and Shell topped the list at
1.2 percent; ExxonMobil occupied the bottom at 0."
The piece is largely about why the coal industry’s new greenwashing project, "carbon sequestration" (injecting coal’s CO2 emissions back into the ground) is both largely mythical and, if achieved, may be deadly dangerous. To wit:
"In addition to being difficult and expensive, [carbon sequestration] is potentially dangerous: In 1986, an eruption of CO2
from a naturally occurring pocket under a Cameroon lake bed instantly
suffocated nearly 1,800 people; leaks from an underground storage site
could be likewise deadly. "That stuff is crazy," says Tyson Slocum, who
heads Public Citizen’s energy project. "Totally unproven. Stuffing
hundreds of millions of tons of carbon dioxide into the ground—there
are huge liabilities."
"For this reason, Slocum says, energy companies are pushing to
transfer as much legal and financial responsibility as possible to the
federal government. Last April industry lawyer Kipp Coddington of
Alston & Bird testified before a Senate committee that if the
industry was going to invest billions of dollars in carbon
sequestration, the related risks had to be "identified, quantified, and
minimized." As Slocum puts it, "Once underground, [the CO2] becomes the responsibility of the American people."
That’s like government handing doctors and hospitals a free pass to commit malpractice. Oops, I forgot–that’s what legislation curbing medical lawsuits already amounts to.
So, did the White House "influence" the Environmental Protection Agency’s decision last December to kill states’ plans to regulate greenhouse emissions from tailpipes? Some of us don’t doubt it for a second. But Rep. Henry Waxman today gave up on negotiating for the documents that would decide the issue, issuing a Congressional subpoena for communications between EPA chief Stephen Johnson and White House on the ruling. It’s a pretty rare step, but Waxman says he’s got good reason.
Waxman, chair of the House Oversight and Government Reform Committee, told the AP that "he has found evidence that
officials from the White House and the agency met before the EPA
decided to block the state law. He did not disclose the evidence."
Do we smell whistleblower?
The EPA staff that reportedly recommended approval of California’s clean-air plan (later taken up by the other states) was obviously angry. So are California Gov. Arnold Schwarzenegger and Atty. Gen. Jerry Brown, who’s filing suit against the refusal. It’s hard to count the places where a juicy info leak could have come from.
[Johnson] has said it was his decision alone in December to turn down
California’s request for a waiver that would have allowed the emissions
law to take effect. Johnson has refused to tell lawmakers whether the
White House sought to influence the decision. Democrats have alleged it
was based on politics, not science.
At a recent Senate hearing, Johnson was confronted with records
showing he had a "principals meeting" at the White House last May after
a briefing on the waiver issue. Johnson said he could not remember what
the meeting was about. …
Waxman last month accused the
EPA of withholding hundreds of communications with the White House and
Justice Department over the matter despite his requests. He has issued
subpoenas for other documents from the EPA, including internal agency
papers showing career employees recommended against denying the waiver.
He had been negotiating for the White House papers until Wednesday.
Ah, the "can’t remember" defense, so beloved by the White House, former U.S. Atty. Gen. Alberto Gonzales, and now the EPA. Cheers to Waxman.]]>
I didn’t get time yesterday to post on a House select committee’s grilling of executives from the major oil companies, but as the chairman, Rep. Ed Markey of Massachusetts, pointedly said, "there will be many more." (If you’ve got a question you’d like to have posed to Big Oil, please post it here as a comment or send it along to email@example.com ).
The oil guys didn’t give an inch, defending their record profits and even threatening to reduce "investments needed to continue safeguarding safeguarding U.S. energy security" if Congress dares reduce their tax subsidies to fund renewable energy development. (Exxon V.P. J.S. Simon, in his opening remarks).
The committee members’ attitudes split right along party lines, which isn’t surprising. But not even the harsher critics did much follow-up on the many evasions and exaggerations. BP’s top U.S. executive, Robert Malone, made a big deal of his company’s investments in solar and wind power, for instance. Yet BP, which once greenly branded itself as "Beyond Petroleum" appears likely to sell off its whole renewable energy division, to boost shareholder value.
Exxon did take flak for spending only $100 million on renewables, and that only on research, compared to last year’s $40.6 billion profit. But most of the committee members seemed to think $100 million was Exxon’s yearly expenditure. Nope, it’s only $10 million a year, on a 10-year project at Stanford. And even that comes with tight, controlling strings attached.
Chevron, Shell and Conoco made lots of green noises about their small renewable-energy projects, but weren’t really pressed as to exactly why their retail gas stations don’t sell renewable fuels, particularly E85. (Here’s the reason: Chevron and friends make it forbiddingly hard and expensive to do so.)
Of course, since the oil execs weren’t sworn to the truth, why bother to tell the whole of it?
Here’s hoping that future hearings will feature sworn testimony, that members will use this first session to hone their follow-up skills, and that one of these days the Senate will get around to voting for the House-passed bill to take back some of those oil subsidies. One thing this hearing did prove beyond a shadow of a doubt is that Big Oil isn’t going to turn renewable energy into a competitor to oil.]]>
Leave it to the Canadians to stay calm. Consider Frank Dottori, founder and former CEO of a multibillion-dollar forest products company. Nowadays he’s heading a project to turn forest and urban waste into ethanol. He grasps all the faults of corn ethanol and sees cellulosic ethanol as the future. But he’s suspicious of the hysteria-mongers, as he told the Toronto Star:
"I think there’s a lot of disinformation out there. Corn is being blamed for the
price of tortillas in Mexico, or driving up the price of food
generally. But if you look at the price of oil, it’s gone from $20 to
$100, and everybody uses oil to do farming. I think that’s a
bigger part of the problem than ethanol."
He points to the fact
the past year, wheat prices have jumped 180 per cent, much higher than
the 31-percent hike seen with corn.
no wheat goes into making fuel," says Dottori. "So I think there are
people who rain on anything, and I don’t think they’ve got their facts."
(Here’s a story right from the farmers’ mouth about the squeeze of oil prices on the farm.)
If, as appears likely, ethanol producers reach industrial capacity in the next few years, and can actually make the fuel for $1 or so a gallon (as some claim), drivers will be trampling the doomsayers to get at it.
The Oakland-adjacent and working class city of Richmond, Calif., is on the verge of allowing Chevron to
proceed with a huge, contentious "upgrade" of its refinery there so it
can process dirtier, heavier grades of crude oil. Chevron says the
plant will just become “more efficient.” Critics, including state Atty. Gen. Jerry Brown,
see a stealth attempt to allow more, and more dangerous, pollution in
an already stressed environment.
Brown, however, also said there was no
state law that would let him do more than urge the small and badly
overmatched city of Richmond to do a better job. That seems like a refinery-sized loophole in the law.
project could set a dangerous precedent for more refinery “upgrades,”
especially those that could handle filthy Canadian oil tars.
Canada’s tar sands producers aren’t yet shipping their sticky, dirty, environmentally disastrous product to California, but they’re planning on it. Chevron and other refiners are certainly planning on using it.
originally touted the project at Richmond as a significant expansion of
refining capacity at the plant, which would trigger requirements for
clean-air upgrades of both new and old equipment. Then, by shifting to
“upgrades”, Chevron evaded federal air quality requirements and got to
deal with Richmond’s overmatched city planners instead of the federal
Now, those upgrades are looking a lot
like both an expansion of capacity and an increase in the release of
air garbage from sulfur to selenium, according to an in-depth analysis
by Greg Karras, senior scientist at a state pollution watchdog group,
Communities for a Better Environment. (The short version of his
conclusions is in this letter.)
The letter concludes:
[Chevron] Project as proposed would switch to extremely contaminated,
price-discounted feedstock that could include extra-heavy oil and oil
sands when better quality oil is available. By describing it as an
equipment replacement that only shifts to similar oils with one-percent
more sulfur … the [Final Environmental Impact Review] provides a
false description of the Project. The FEIR is fundamentally deficient
and must be revised and recirculated for public review.”
Gen. Brown earlier called for better review by Richmond of both a new
hydrogen-production plant on the refinery premises and the main
refinery overhaul. (The hydrogen is not for a clean-fuels project, but
because Chevron needs hydrogen to process the dirtier oils.) But Brown
has acknowledged that "there is no [state] rule or regulation in place
that binds the City’s actions", which is a shock when such a huge
project could impact air quality statewide. in a recent letter, Brown
seemed to accept the specious claims of the city’s final environmental impact report.
He merely urged the Richmond City Council to ask for more environmental
assurances from Chevron. The city council might also demand a
"mitigation payment" (see "bribe") by Chevron to the city.
If Gov. Arnold Schwarzenegger wants to
prevent a deeper tarnish of his Green Giant image, he’d better have
something to say about this Chevron project, including an invitation
for state laws that would even up a relationship like that between
needy Richmond and filthy-rich Chevron.