April 20, 2006
CONTACT: Jamie Court (310) 392-0522 ext 327, Judy Dugan ext 305
$400 million for retiring chief, $10 million for alternative energy research
Santa Monica, CA — ExxonMobil invested less than three-hundredths of one percent of last year’s record $36 billion in profits on direct research on alternative energy, according to recent Senate testimony and company documents analyzed by the Foundation for Taxpayer and Consumer Rights (FTCR). The $10 million a year that Exxon puts into a 10-year project at Stanford University also pales next to the more than $400 million granted in his final year to recently retired CEO Lee R. Raymond.
By contrast, BP (formerly British Petroleum) last year announced an $8 billion investment in a new business, BP Alternative Energy, aiming to "lead the market in low-carbon alternative power."
Exxon’s penny-pinching on the research needed to ease U.S. petroleum dependence and lead oil companies into a less petroleum-dependent future comes on top of the FTCR’s finding on April 17 that less than one-fourth of the recent spike in gasoline prices to $3 and above can be attributed to crude oil prices and ethanol costs, despite the claims of oil producers and refiners. (Read the study at: http://www.consumerwatchdog.org/energy/pr/?postId=6133 )
"This Earth Day we need to remember that Exxon will not spend its resources developing cleaner, cheaper and more reliable energy without the government forcing it to do so," said FTCR president Jamie Court.
"Californians at least will have a chance to vote on a November ballot measure that takes back oil companies’ windfall profits for a state fund that will provide practical incentives to make alternative fuel vehicles more available and affordable. We cannot rely on oil companies to create cheaper and cleaner fuels. American oil companies like Exxon will never want us to use less oil."
Raymond, while defending his compensation in a speech Tuesday, scorned the idea that oil companies should invest in alternative energy sources. His final-year compensation was reported last week in the New York Times, which added up his salary, stock options, $98 million pension grant and $199 million in longer-term restricted stock grants.
In recently available transcripts of March 14th US Senate Judiciary Committee testimony on soaring energy prices, Sen. Charles Schumer (D-N.Y.) pressed current Exxon CEO Rex Tillerson to state Exxon’s spending on alternatives to petroleum. (Read the transcript at: http://www.consumerwatchdog.org/energy/rp/6137.pdf )
The only direct investment Tillerson could name was to the Stanford Global Climate and Energy Project, which is not solely focused on alternative energy sources. Pressed by Schumer about the meager $10 millon a year, Tillerson responded: "We are investing in technology, and we are investing heavily in oil and natural gas, which is the business we are in." Even President Bush, a former Texas oilman, stated flatly in his January State of the Union Speech, "America is addicted to oil," and pledged support (if meager) of solar, wind and other technology development.
A 2004 Exxon "Report on Energy Trends, Greenhouse Gas Emissions and Alternative Energy" also cites no other direct dollar investment, and dismisses alternative energies including solar, wind, biofuel and hydrogen as too inefficient and unprofitable in the near term to be of interest to Exxon. Solar is an "unattractive investment." Wind? "Politically unstable," because government subsidies are uncertain. Hydropower? "[No] competitive advantage for ExxonMobil." Even hydrogen fuels, the current darling of the U.S. automotive industry and the Bush administration, are dismissed because "significant commercialization… [is] not likely for some time."
"Exxon’s explicit rejection of alternative energy research, much less production, is a highhanded slap at both consumers and the environment," said Judy Dugan, research director of the foundation.
"As long as Exxon can get away with $3 a gallon prices at the pump and blame it on crude oil prices, their executives’ attitude seems to be ‘Why bother?’ Companies like BP know otherwise and are investing significantly in the alternatives that will not only reduce greenhouse warming but provide a long-term business model independent of petroleum.
"The current pricing of oil products is unsustainable by either developed or developing economies, and the health of the Earth depends on reducing carbon emissions. Exxon, however, can’t see beyond its next world-record profit report."
A study by FTCR released this week found corporate markups and profiteering are responsible for spring price spikes, not rising crude costs or the national switchover to higher-cost ethanol, as the oil industry claims.
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The Foundation for Taxpayer and Consumer Rights is a non-profit, non-partisan consumer group. More at: http://www.consumerwatchdog.org