Climate change denial by oil industry to minimize cost of future regulations

Since at least the 1980’s the Oil Industry, ExxonMobil in particular, has colluded to fund climate change denial while behind closed doors they clearly knew about the problem and the potential for government policy to negatively impact their business. That’s the line which should have led my post the other day discussing the Climate Deception Dossiers report published by the Union of Concerned Scientists. The real story is that, as we’ve all expected all along, that climate change denial has been funded by the fossil fuel companies, and they’ve followed a number of shady tactics to obscure not only the truth about climate change but their role in fueling the denial.

Since the publishing of the UCS report, more reporting has emerged including a denial by ExxonMobil that they’ve funded climate change denial.

That denial came through a Guardian article focusing mostly on an email written by Lenny Bernstein, the Exxon scientist who focused on climate change research, and who wrote the “Predicting Future Climate Change: A Primer” demonstrating that oil companies were very aware of the climate change threat. (NY Times published a final draft of that report)

Richard Keil, an Exxon spokesman, told the Guardian that “The science in 1981 on this subject was in the very, very early days and there was considerable division of opinion. There was nobody you could have gone to in 1981 or 1984 who would have said whether it was real or not. Nobody could provide a definitive answer. I am here to talk to you about the present. We have been factoring the likelihood of some kind of carbon tax into our business planning since 2007. We do not fund or support those who deny the reality of climate change.”

That statement prompted the Union of Concerned Scientists to send an email alert saying ” We know that’s not true. ExxonMobil is a member and supporter of the American Legislative Exchange Council (ALEC), a group known for spreading climate disinformation.”

The UCS Climate Deception Dossier report documents how ALEC is one of the groups funded by ExxonMobil, and a slew of other fossil fuel companies. Part of ALEC’s work is to push climate misinformation and deception, while writing anti-climate-change-anti-clean-energy legislation for legislators and congress members to promote.

Getting back to the Guardian article, Bernstein’s letter is very relevant to another part of Keil’s statement: “We have been factoring the likelihood of some kind of carbon tax into our business planning since 2007.”

Bernstein wrote “Natural resource companies – oil, coal, minerals – have to make investments that have lifetimes of 50-100 years. Whatever their public stance, internally they make very careful assessments of the potential for regulation, including the scientific basis for those regulations,” and elsewhere talked about how Exxon in particular had a problem on its hands in the 1980’s. A problem unrelated to the Exxon Valdez disaster, but instead related to the Natuna natural gas field off Indonesia.

That field is a huge source of natural gas, but it contains a lot of CO2. “Natural gas often contains CO2 and the technology for removing CO2 is well known. In 1981 (and now) the usual practice was to vent the CO2 to the atmosphere,” Bernstein wrote. The Natuna had so much CO2 it would have been like setting off a CO2 bomb. It’s also possible, at a cost, to inject the CO2 underground so it doesn’t affect the environment.

The issue is the relative cost of paying whatever carbon tax or penalty, versus the cost of reinjecting the CO2 underground. Bernstein’s email describes the corporate calculus – they don’t do the right thing because it’s the right thing, but because it’s cheaper to do so. “Having spent twenty years working for Exxon and ten working for Mobil, I know that much of that ethical behavior comes from a business calculation that it is cheaper in the long run to be ethical than unethical.”

Another Guardian report, from March 2015, discusses efforts by members of the Rockefeller family to get Exxon to change its tune on climate change, and invest in renewable energy. John D. Rockefeller is, of course, the founder of the oil empire that led to Exxon’s existence. The family met with the head of investor relations, and several times launched shareholder resolutions.

In October 2014, Ken Cohen (ExxonMobil’s head of Public and Governmental Affairs, wrote a blog post describing “divestment” as being out of step with reality. There are wide ranging calls for various institutions to divest (sell off) their holdings in fossil fuel industry stocks. Such a move might make those stocks less valuable, and therefore cause financing problems for those companies. So of course someone in Cohen’s position is going to push for continued investment in oil companies.

The crux of his long blog post is that “That’s because there are no scalable alternative fuels or technologies available today capable of taking the place of fossil fuels and offering society what those energy sources provide.” And, “Wind, solar, and geothermal energy provided just 1.3 percent of global energy. Renewable energy has a contribution to make, but it looks to be a relatively small one.” And, “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.”

That is, the only way (according to ExxonMobil) to keep modern society alive is with fossil fuels.

The comments at the bottom are interesting – including several pointing out that renewable energy technology is improving rapidly, in cost, capability and quantity, and that in a few years the situation will be very different.

For a closing thought, I want to reiterate something Bernstein said in his e-mail.

There’s a tendency to overly focus on individual people or organizations rather than to look at the complete picture. The Koch Brothers get a lot of ire tossed at them because of this tendency. However, the problem isn’t the Koch’s in particular but the whole picture.

It’s this belief that fossil fuels are the only way to fuel our modern society, and therefore society has to do whatever it takes to keep the fossil fuel bandwagon rolling. The impact of that belief is widespread and not limited to the Koch Brothers. The belief is held plenty of other individuals and organizations, ExxonMobil being just one.

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About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.