4-25-07 by Court
Chevron shareholders meeting today in San Ramon will hear from Amazon villagers about the company’s failure to settle up for the worst oil related disaster in the world. Subsidiary Texaco dumped 18 billion gallons of oily waste water in the Amazon, thirty times more volume than the Exxon Valdez spill. The Ecuadorian lawyer on the case, featured in this month’s Vanity Fair, will confront CEO David O’Reilly in front of the shareholders. Associated Press previewed the issue in a story already out on the wires.
As I outline in a commentary in today’s San Francisco Chronicle, "How Green Is Chevron?" the sludge in Ecuador isn’t the only problem for the West’s largest refiner as it tries to convince Congress and the world it’s really going green. Here are a few other items Chevron has to address:
Get serious about making and delivering non-petroleum fuel: "We’re a big player in alternatives … and we’re doing a lot of work in the biofuels area," CEO O’Reilly said in Texas in February. "The dollars that are being invested in alternative energies today — that’s going to generate new products, new ideas and it’s going to be the marketplace that dictates this, no matter where policy is." What Chevron’s O’Reilly isn’t saying is that a lot of the money the company spends on "alternative energy" isn’t paying for research or development of new substitutes for petroleum. For example, as the largest generator of geothermal power on the globe, Chevron counts those dollars as part of its alternative fuel development investment, when it isn’t tapping or developing a new energy source. If you want to judge whether Chevron is truly interested in alternative fuel development, just look at the $40 million it spent to defeat Proposition 87, which would have funded state-based renewable fuel development.
In March 2006, O’Reilly told a U.S. Senate hearing, "[O]f our 9,300 [gasoline] stations, 8,900 are independently operated and they are free to deploy E85 [high-ethanol fuel]." In fact, Chevron’s contracts with retailers make it impractical, and in most cases impossible, for them to sell alternative and renewable fuels. Among the contractual obstacles to distribution is Chevron’s insistence that its dealers sell all three grades of fuel, rather than being allowed to replace mid-grade with E85. So dealers have big capital expenditures for new pumps and storage tanks if they want to sell alternative products. Chevron says dealers are not banging its doors down to amend their contracts to sell E85 and biodiesel, but if the company actively sought to produce and distribute such products perhaps there would not be 6 million flex-fuel vehicles on the road and only 2,000 gas stations (and only one in California) for them to fuel up at. As for Chevron’s touted investment in a biodiesel plant on Galveston Bay, Texas, the plant is not even intended to make automobile fuel, according to analysts. Chevron needs real plans for alternatives to petroleum and real disclosure about what it’s truly spending on them.
Pay California taxpayers what is owed over MTBE contamination: MTBE, produced and blended into gasoline by Chevron, leaked from gas station tanks and spread widely before it was banned in 2004. Taxpayers, represented by a few water districts, have sued Chevron and won. The company is still refusing to settle many cases and pay the billions it owes many water districts for cleanup. It’s time for Chevron to come clean and give some of its billion in profits back to the communities it contaminated.
Cap greenhouse-gas emissions: Conoco Phillips recently took the plunge and called for regulation of greenhouse-gas emissions. Chevron’s board, however, has urged rejection of shareholder resolutions being heard today that ask the company to comply with greenhouse-gas emission standards. Shareholders should buck the board.
This is an agenda that Chevron will have to pay attention to over time if it wants to claim it cares about the environment.
Update from the AP story, a big shocker: Governor Arnold Schwarzenegger, after raking in more than a half million dollars in campaign contributions from Chevron, refused the invitation to join the Amazon villagers at the shareholder meeting due to "scheduling conflicts." I suppose it’s easier to find courage in the movies.