As the 5th largest public traded company in the U.S. and 9th largest publicly traded company in the world, ExxonMobil—a supermajor oil & gas giant—plays an important role in the modern economy. Yet increasingly it finds itself in the intersection of the climate change movement with new investigations and potential liabilities over knowledge and potential suppressing of global warming research. How can a carbon based business survive and even thrive in the presence of global warming, especially with its legacy of climate change denial in light of overwhelming evidence? It is important to pause here to reflect that the consensus in the scientific community is that global warming is undeniably happening and is being accelerated by human-driven emissions, a fact that unfortunately is muddled in the media. Take a look below for a quick summary of the science on climate change:
What are companies doing to address the problem? Despite making improvements through cogen and operational improvements (some ~20 Million Tons CO2 reduced over the past decade compare at 122 Million in 2015 ), Exxon has essentially maintained a stance of wait-and-see while warning about the high costs of climate change countermeasures—a strategy that even some investors are calling unsustainable.
There is a worldwide trend emerging in energy that the corporation is aware of: ExxonMobil in their shareholder report and energy projections admit the decline in energy demand in OECD countries due to energy improvements (Figure 1). Yet there is still a huge increase in the energy demand in non-developing countries, which creates an enormous problem. The demand exists, but the methods must change and I implore the soon-to-be new ExxonMobil head Darren Woods to consider the repositioning of Exxon as a truly Energy company that seriously considers alternatives to Oil and Gas in order to solve the energy problem in front us—a clarion call to others in the industry to diversify.
Yes, the world needs energy to maintain its standard of living, but the means of acquiring that energy is critical to our environment. The company’s answer has been to point out its adoption of natural gas as a much cleaner life-cycle emissions alternative to coal. While this is true (Figure 2) and is a step in the right direction, natural gas does have controversy surrounding the leakage of methane from wells, which could seriously undermine the emissions positive impact; hopefully companies that claim natural gas superiority are serious about technologies that minimize well leakage.
The current CEO, Rex Tillerson, said in 2012 that climate change is a problem that humanity will adapt to and is ultimately an engineering problem. This is true as humans are resourceful—however, I caution that part of that adaptation may involve the demise of industries that contribute to the problem rather than adaptation around them. I consider the current environment as a test for companies to see if they instead can adapt and diversify to substantially lower emissions alternatives.
Hence, the author would like to see a more aggressive step toward technologies like nuclear that are far more environmentally friendly. As a former employee of ExxonMobil, I know that the company and other large firms have the capital, operational capability, and outstanding safety record to enter into the nuclear sector across the globe. While Exxon is not one to make radical changes, it may have to rethink its strategy over the next 20 years if it wants to remain viable as a business model. It will be necessary, for Exxon’s 70,000+ employees, consumers, business partners, pension and retirement fund investors, and shareholders, that the company take more aggressive steps to diversify for the corporation’s survival. And it will be necessary for everyone that companies like ExxonMobil, which are so intertwined in our modern civilization, lead the charge in emissions reduction so that we can all have a bright future.
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- “2015 Summary Annual Report.” (2012): 27-37. Publications and Reports. ExxonMobil, 2015. Web. 4 Nov. 2016. <http://cdn.exxonmobil.com/~/media/global/files/summary-annual-report/2015_Summary_Annual_Report.pdf>.
- Barrett, Paul, and Matthew Philips. “Can ExxonMobil Be Found Liable for Misleading Public on Climate Change?” Bloomberg.com. Bloomberg, 7 Sept. 2016. Web. 04 Nov. 2016.
- Breslow, Jason. “FRONTLINE.” PBS. PBS, 15 Sept. 2015. Web. 04 Nov. 2016.
- “Climate Change 2014 Synthesis Report Summary.” (n.d.): n. pag. Intergovernmental Panel on Climate Change, 2014. Web. 4 Nov. 2016. <http://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf>.
- “Comparison of Lifecycle Emissions of Energy Technologies.” Life-Cycle Emissions Analyses. Nuclear Energy Insitute, 2014. Web. 04 Nov. 2016. <http://www.nei.org/Issues-Policy/Protecting-the-Environment/Life-Cycle-Emissions-Analyses/Comparison-of-Lifecycle-Emissions-of-Selected-Ener>.
- “Forbes Global 2000.” Forbes. Forbes Magazine, n.d. Web. 04 Nov. 2016.
- “Greenhouse Gas Emissions (net).” Corporate Citizenship Report. ExxonMobil, 2015. Web. 04 Nov. 2016. <http://corporate.exxonmobil.com/en/community/corporate-citizenship-report/charts/greenhouse-gas-emissions-net-chart>.
- Itsokaytobesmart. “Climate Science: What You Need To Know.” YouTube. YouTube, 08 Dec. 2014. Web. 04 Nov. 2016. <https://www.youtube.com/watch?v=ffjIyms1BX4>.
- Lamb, Natasha, and Bob Litterman. “Tell the Truth, ExxonMobil: A Low-carbon Future Is Affordable – and Necessary.” The Guardian. Guardian News and Media, 31 Jan. 2016. Web. 04 Nov. 2016.
- Neela Banerjee, Lisa Song, David Hasemyer. “Exxon Believed Deep Dive Into Climate Research Would Protect Its Business | InsideClimate News.” Exxon Believed Deep Dive Into Climate Research Would Protect Its Business | InsideClimate News. InsideClimate News, 17 Sept. 2015. Web. 04 Nov. 2016.
- Randall, Eric. “What Exxon’s CEO Proposes We Do About Global Warming: ‘We’ll Adapt'” The Wire. The Wire, 28 June 2012. Web. 04 Nov. 2016. <http://www.thewire.com/business/2012/06/what-exxons-ceo-proposes-we-do-about-global-warming-well-adapt/54024/>.