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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