Exxon Blasts Movement to Divest From Fossil Fuels

The oil giant seeks to counter the campaign that urges investors to dump stock in petroleum and coal companies.

BURBANK, CA - FEBRUARY 01: An Exxon gas station advertises its gas prices on February 1, 2008 in Burbank, California. Exxon Mobil Corp. has posted an annual profit of $40.6 billion, the largest ever by a US company, and set a new US record for the highest quarterly profit, $11.7 billion for the last three months of 2007. The previous annual profit record, $39.5 billion, was set by Exxon in 2006. The company's revenue also rose 30 percent in the fourth quarter, from $90 billion a year ago to $116.6 billion. Yearly sales were up from $377.64 billion in 2006 to a new company record of $404.5 billion. Exxon was particularly benefited by historic crude prices at the end of the year. Exxon Mobil is the world?s largest publicly traded oil company. (Photo by David McNew/Getty Images)
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Ben Geman
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Ben Geman
Oct. 13, 2014, 1:38 p.m.

Ex­xon Mo­bil is wield­ing its pub­lic re­la­tions might against the fossil-fuel di­vest­ment move­ment, sig­nal­ing that cli­mate-change act­iv­ists have struck a nerve at the world’s biggest pub­licly traded oil and gas com­pany.

Ex­xon Mo­bil’s blog, titled “Per­spect­ives,” pos­ted a lengthy at­tack Fri­day about the di­vest­ment move­ment, which urges uni­versit­ies, churches, pen­sion funds, and oth­er big in­sti­tu­tion­al in­vestors to dump their shares of oil and coal com­pan­ies as part of the fight against glob­al warm­ing.

But the blog post calls the move­ment “out of step with real­ity,” say­ing it’s at odds with the need for poor na­tions to gain bet­ter ac­cess to en­ergy, as well as the need for fossil fuels to meet glob­al en­ergy de­mand for dec­ades to come.

So far, the cli­mate ad­voc­ates’ pro­gress at get­ting a grow­ing num­ber of in­sti­tu­tions to shed hold­ings in fossil fuel com­pan­ies re­mains pretty small com­pared with the scale of the in­dustry they’re bat­tling.

Con­sider that the roughly 1,700 oil-and-gas and coal com­pan­ies lis­ted on stock ex­changes are worth nearly $5 tril­lion, notes the re­search com­pany Bloomberg New En­ergy Fin­ance.

But the di­vest­ment move­ment has been grow­ing— just last week the Uni­versity of Glas­gow be­came the first European uni­versity to an­nounce di­vest­ment plans. And the move­ment also has a num­ber of high-pro­file ad­her­ents, in­clud­ing Arch­bish­op Des­mond Tutu, the South Afric­an No­bel Prize-win­ning anti-apartheid lead­er. (The fossil fuel di­vest­ment move­ment takes its cues from the 1970s and 1980s move­ment ur­ging di­vest­ment from apartheid South Africa.)

An­oth­er sup­port­er is Chris­ti­ana Figueres, the United Na­tions of­fi­cial shep­herd­ing in­ter­na­tion­al ne­go­ti­ations aimed at reach­ing a new glob­al cli­mate pact in late 2015.

But Ex­xon calls di­vest­ment a mis­placed solu­tion to cli­mate change.

“Di­vest­ment rep­res­ents a di­ver­sion from the real search for tech­no­lo­gic­al solu­tions to man­aging cli­mate risks that en­ergy com­pan­ies like ours are pur­su­ing,” writes Ken Co­hen, Ex­xon’s VP for pub­lic and gov­ern­ment af­fairs.

Co­hen’s post ar­gues that the move­ment ig­nores the scale of glob­al en­ergy de­mand for power, trans­port­a­tion, and oth­er needs, as well as “the in­ab­il­ity of cur­rent re­new­able tech­no­lo­gies to meet it.”

“Al­most every place on the plan­et where there is grind­ing poverty, there is also en­ergy poverty. Wherever there is sub­sist­ence liv­ing, it is usu­ally be­cause there is little or no ac­cess to mod­ern, re­li­able forms of en­ergy,” Co­hen writes.

Di­vest­ment ad­voc­ates will find plenty of ma­ter­i­al to ar­gue about in Ex­xon’s post. In one case, Ex­xon cites es­tim­ates that re­new­able en­ergy’s share of the total glob­al mix will be about 15 per­cent in 2040.

But the act­iv­ists push­ing for di­vest­ment, such as Bill McK­ib­ben’s 350.org, ad­voc­ate for more ag­gress­ive policies that pro­mote low-car­bon en­ergy, and ana­lysts say that would change the glob­al mix a lot more and a lot faster.

While the In­ter­na­tion­al En­ergy Agency has fore­cast that without policy changes, re­new­ables will meet about 15 per­cent of total en­ergy needs in 2035, IEA and oth­er agen­cies have also modeled vari­ous oth­er scen­ari­os in which low-car­bon en­ergy takes a far lar­ger share.

For in­stance, in late Septem­ber, IEA re­leased a “roadmap” of policies ex­plain­ing how sol­ar power alone could be­come the world’s biggest source of elec­tri­city by 2050 or even earli­er.

Di­vest­ment ad­voc­ates have already cri­ti­cized Ex­xon’s post.

“This is the oil in­dustry say­ing ‘please don’t be mean to me’ after bul­ly­ing vul­ner­able com­munit­ies around the globe for dec­ades,” said Ana­stas­ia Schemkes, a cam­paign rep­res­ent­at­ive with the Si­erra Stu­dent Co­ali­tion.

Rev­er­end Fletch­er Harp­er, ex­ec­ut­ive dir­ect­or of the pro-di­vest­ment group Green­Faith, took is­sue with Ex­xon’s as­ser­tions that the di­vest­ment move­ment is out of touch. “Di­vest­ment ad­voc­ates have been clear from the start that the di­vest­ment cam­paign is about call­ing in­to ques­tion the in­dustry’s ‘so­cial li­cense’ to op­er­ate. In this re­gard, di­vest­ment is a highly ap­pro­pri­ate de­bate, and highly real­ity-based,” he said in an email.

Harp­er also said that ad­voc­ates agree with the im­per­at­ive of bring­ing en­ergy to na­tions where ac­cess is now lack­ing. “I be­lieve that these en­ergy needs must be met, to the greatest de­gree pos­sible, with clean, re­new­able en­ergy. The [Ex­xon] blog post does not reck­on with the fact that coal, oil, and gas com­bus­tion are re­spons­ible for a large num­ber of deaths an­nu­ally world­wide,” Harp­er said.

It’s not the first time Ex­xon has tussled with di­vest­ment ad­voc­ates.

In re­sponse to share­hold­er act­iv­ists, Ex­xon re­leased a re­port in late March that re­buts ad­voc­ates’ claims that its fossil fuel re­serves are at risk of be­com­ing “stran­ded as­sets” in a car­bon-con­strained world.

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