Exxon’s Latest Business Plan — Drill, Baby, Drill
While many of the world’s largest oil companies are rushing ahead with plans to slash carbon emissions and transition to renewable energy, ExxonMobil is charting its own course, one that will help heat the Earth’s environment to the point where human beings will no longer be able to survive. One would think a business corporation would want to keep its customers alive but Exxon sees things differently.
Scientific American, citing a report by E&E News, says Exxon’s latest business plan calls for a massive increase in drilling operations, all in the name of profits. Bloomberg did some digging and found the company’s internal projections suggest the new strategy will increase Exxon’s carbon emissions from 122 million metric tons in 2017 to 143 million metric tons by 2025. To put that in perspective, that’s the equivalent of 5 new coal powered generating facilities every year for the next 5 years. But that’s not the half of it. Those projections are for the company’s operations, not for the carbon released when all that lovely new oil is burned or turned into plastics, known in the industry as Scope 3 emissions.
But wait, Exxon says. The emissions would be much higher if the company was not taking bold and decisive action to reduce methane leaks and lower emissions from its extraction technologies. Casey Norton, an Exxon spokesperson, challenged Bloomberg’s description of the numbers, saying they represented a projection of future greenhouse gas levels rather than a plan to increase emissions.
“The emissions projection you cite is an early assessment that does not include additional mitigation and abatement measures that would have been considered as the next step in the process,” he said. “The same planning document illustrates how we have been successful in mitigating emissions in the past. As demand returns and capital investments resume, our growth plans will continue to include meaningful emission mitigation efforts.”
Rob Jackson, a professor of Earth system science at Stanford University, sees things differently. “By focusing on the emissions of extraction, we are nibbling around the edges of plans to produce more and burn more oil. A company can improve carbon intensity but have emission go up if they produce more oil and gas. That is what we’re seeing here. Clearly, Exxon understands what they’re doing is not enough to reduce emissions, and that’s not even including Scope 3 emissions.”
Exxon is actually begging political leaders to impose a carbon tax. That may sound really progressive but it’s not. As Bloomberg points out in an e-mail, even with a carbon price of $40 a ton, average global temperatures will soar by 3º C or more, making the Earth inhospitable to most human life. But there’s a kicker. In exchange for accepting a carbon tax, it wants all regulations governing its industry dismantled. “For more than a decade, ExxonMobil has supported an economy-wide price on CO₂ emissions as an efficient policy mechanism to address greenhouse gas emissions,” Exxon said in a statement. “An effective carbon policy should replace the patchwork of literally thousands of regulations, laws and mandates today that have the effect of putting a price on carbon in a costly, inefficient way.”
One of the regulations that would probably have to disappear under Exxon’s carbon tax proposal would be California’s plan to ban gasoline and diesel powered cars by 2035. The drumbeat against government regulations has been growing louder for decades, pushed by the multitude of paid professional pressure groups funded by Charles Koch. While the allure of a simple economic policy that replaces a welter of regulations is attractive, many economists suggest the actual social cost of carbon is closer to $200 a ton.
It is fatuous to suggest a carbon price that is substantially lower than it should be is a magic bullet that will allow oil companies to keep operating in business as usual mode while preventing a climate catastrophe. In order for the vaunted “free market” to work, all the factors in the economic equation must be priced correctly, otherwise it is just a sham transaction designed to convince the populace that something is being done when what is really happening is that some people and corporations are stuffing their pockets full of cash while sticking society as a whole with the bill for cleaning up the mess left behind.
Bloomberg concludes its analysis of Exxon’s carbon tax proposal this way. ” Would a carbon tax alone be good for the climate? Yes, of course. But trading away an ambitious green investment and broader climate plan in favor of a “simple” carbon tax isn’t a trade worth taking. Exxon’s support for such a plan should tell us as much.”
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