Big Oil’s Tough Clean-Energy Transition Early Movers in Decarbonization Shift Offer a Glimpse of the Hard Times ahead for Exxon and Chevron

May 28, 2021

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by Rochelle Toplensky (Wall Street Journal) ... Pressure on the petroleum industry to decarbonize is building on multiple fronts. U.S. oil giants that look at their more forward-thinking peers across the Atlantic for inspiration will find some lessons, but not easy ones.

The major European oil companies have refocused their attention on extending existing high-return sites rather than exploring new ones. Oil and gas expenditures were slashed during the coronavirus pandemic and remain down. Billions of dollars will still be spent on the traditional business, but likely with a higher hurdle rate because of more uncertain future demand, higher capital costs and rising carbon prices.

Green investment will increase, but that doesn’t mean Chevron and Exxon should start building solar or wind farms. Renewable projects could be tough without relevant experience. Competition is fierce for new sites and it is a low-margin business—more installation than exploration. There is a risk of overpaying. BP , the last of the European supermajors to pivot toward green energy, paid a healthy premium to buy into offshore wind projects. READ MORE

Chevron shareholders back emissions cut proposal (The Hill)

Climate advocates win seats on Exxon’s board (The Hill)

ExxonMobil Loses At Least Two Board Seats In Shareholder Election (Our Daily Planet)

Engine No. 1’s Exxon Win Provides Boost for ESG Advocates (Bloomberg)

Dutch court orders Shell to slash its emissions by 45 percent by 2030 (The Hill)

Big oil’s climate reckoning … OIL MAJORS’ ROUGH DAY: (Politico’s Morning Energy)

Investors and Courts Send Powerful Wake-Up Call to Oil Giants Exxon, Chevron, and Shell (Sierra Club)

Three Exxon refineries top the list of U.S. polluters (Reuters)

Big Oil’s Green-Spending Boost Isn’t Enough, IEA Says (Bloomberg/Yahoo)

Why has Andy Karsner frightened the mighty ExxonMobil? The oil giant spent millions of dollars to keep Karsner, a Republican who favors renewable energy, off the company’s board of directors. It failed. (Washington Post)

Revealed: ExxonMobil’s lobbying war on climate change legislation: A senior ExxonMobil lobbyist has been captured on camera revealing how the oil giant is using its power and influence to water down US climate legislation. (Channel 4 News)

As Biden Weighs “Bailouts” for Big Oil, Ernst Holds President Accountable for His Campaign Promises -- Ernst leads letter to Biden: “While we are aware of the power of the oil lobby, and its efforts to influence your administration, I urge you not to bend to their demands to undercut the RFS…” (Office of Senator Joni Ernst (R-IA))

Drivers used to pay for roads. Washington is killing that idea. (Politico)

SHOCKED, SHOCKED BY OUR LOBBYIST: (Politico's Morning Energy)

Excerpt from (Channel 4 News): Keith McCoy is a senior ExxonMobil lobbyist on Capitol Hill and has represented the company in its liaison with the US Congress for the last eight years.

Greenpeace UK’s Unearthed platform posed as head-hunters looking to hire a Washington D.C. lobbyist for a major client. They approached Mr McCoy, who agreed to speak over Zoom.

During the covert recordings, which have been passed to Channel 4 News, Mr McCoy claims:

the company secretly fought against legislative action on climate change using third-party organisations
he lobbied key senators to remove and/or diminish climate change measures from President Biden’s US $2 trillion infrastructure and jobs bill as it proceeds through the legislative process
he regards trade bodies like the American Petroleum Institute as “whipping boys” in order to avoid public scrutiny on Capitol Hill

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Mr McCoy claims that ExxonMobil has aggressively fought science to deny climate change in order to maximise profit and shareholder return. He alleges that ExxonMobil joined “shadow groups” to pursue climate change denial.

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Mr McCoy names 11 senators who he says are “crucial” to ExxonMobil: Senator Shelley Moore Capito, Senator Joe Manchin, Senator Kyrsten Sinema, Senator Jon Tester, Senator Maggie Hassan, Senator John Barrasso, Senator John Cornyn, Senator Steve Daines, Senator Chris Coons, Senator Mark Kelly and Senator Marco Rubio

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Channel 4 News has established, through Federal Election Commission (FEC) data, that all except two of these senators (Senators Maggie Hassan and Mark Kelly) have received financial contributions from ExxonMobil.

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The FEC data shows Senator Manchin has received at least $12,500 from the ExxonMobil Political Action Committee in declared disbursements since the beginning of the 2011-12 election cycle.

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Mr McCoy described a lobbying strategy in which he claims ExxonMobil uses third parties to mask its interests from public view and accountability.

He said: “We don’t want it to be us, to have these conversations, especially in a hearing. It’s getting our associations to step in and have those conversations and answer those tough questions and be for, the lack of a better term, the whipping boy for some of these members of congress.”

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Mr McCoy appears to suggest that ExxonMobil’s public support for a carbon tax is underpinned by the conviction it will never happen, allowing the company to “support” it in order to appear green.

He said: “I will tell you there is not an appetite for a carbon tax. It is a non-starter. Nobody is going to propose a tax on all Americans. And the cynical side of me says yeah we kind of know that. But it gives us a talking point. We can say well what is ExxonMobil for? Well we’re for a carbon tax.

“Carbon tax is not gonna happen. I have always said, and I’ve worked on climate change issues for twenty years. There’s a lot of talk around it and the bottom line is it’s going to take political courage, political will in order to get something done. And that just doesn’t exist in politics. It just doesn’t. ... " READ MORE

Excerpt from Politico's Morning Energy:Exxon Mobil lobbyist Keith McCoy admitting that the company funded “shadow groups” to undermine climate policy initiatives, even as the company publicly said it was committed to fighting climate change.

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But the video confirms what climate activists have always suspected. “Did we aggressively fight against some of the science? Yes,” McCoy told the Greenpeace operative who was surreptitiously filming the encounter. “Did we join some of these shadow groups to work against some of the early efforts? Yes, that’s true.”

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As for Exxon’s public promotion of a carbon tax, McCoy said he doesn’t think it’s going to happen: “Nobody is going to propose a tax on all Americans. The cynical side of me says we know that, but it gives us a talking point.” McCoy, who could not be reached for comment, wrote on his LinkedIn page that despite his work lobbying for Exxon since 2014, “My statements clearly do not represent ExxonMobil’s positions on important public policy issues.”

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Expect this to add ammunition to shareholder groups who have been pushing for rules forcing public companies to disclose more information on their lobbying disclosures. “If this is even half true, there is a considerable disconnect” between Exxon’s public policy statements and its actions, Tim Smith, director of ESG shareowner engagement Boston Trust Walden, told ME. Smith pointed to the shareholder resolution that passed at Exxon itself earlier this year that requires the company to start disclosing how much money it spends on trade associations and other third parties. READ MORE