ExxonMobil continues to maintain that deep decarbonisation would degrade living standards

ExxonMobil’s flagrant attempts to undermine climate policies deserve more widespread opprobrium, writes Andrew Warren, chair of the British Energy Efficiency Federation (BEEF) and a friend of EiD on the Business Green website. With ExxonMobil acting this way, the global climate conference (COP28) later this year in Dubai is going to be quite a showdown with the fossil fuel lobbyists becoming bolder and bolder. Andrew has a simple message to start with: boycott Esso. You’ll understand why.

The case for boycotting Esso

Achieving net zero emissions would require a “degradation in global standards of living” – an outcome which would be “highly unlikely” for society to accept. As such, altering business activities to deliver on overarching global climate goals does not meet “the level of likelihood required to be considered” in company financial statements.

These are not chance remarks, surreptitiously recorded at a drinking session of good old boys in the plush country clubs of Texas oilmen. No, these are quotes pulled from a formal document that oil giant ExxonMobil Corp submitted last month to the US Securities and Exchange Commission (SEC).

The statements in the document – the US oil giant’s formal response to recommendations to shareholders set out by proxy advisory firm Glass Lewis – pithily encapsulate the underlying business philosophy of Exxon, the parent company of Esso.

Exxon’s turnover last year was a stupendous $409.7bn, a 29 per cent increase on its total revenues in 2021. The Esso brand is so ubiquitous in Britain that 70 per cent of people live within three miles of one of its petrol or diesel outlets.

In the statements submitted to the SEC, Exxon is effectively stating – very publicly – that it intends to continue with business-as-usual and get richer and richer by selling more and more oil. It indicates a refusal to believe that democratic governments will be courageous enough to drive the change required to dramatically alter energy systems. And previous experience suggests that any administrations that try to do so could find their political opponents being lobbied and financed to adopt diametrically different polices.

The International Energy Agency (IEA) was founded in 1974 to provide an international governmental forum to deal with contentious issues emanating from the world of ‘Big Oil’. It is now two years since the agency published its landmark Net Zero Pathway, a roadmap for how global temperature increases could be limited to 1.5C by 2050 in a cost-effective and socially acceptable way.

The report identified seven “key pillars of decarbonisation”: energy efficiency; behavioural changes; electrification; renewables; hydrogen and hydrogen‐based fuels; bioenergy; and carbon capture and storage (CCS). These pillars were set out in order of precedence with the IEA emphasising that energy efficiency measures need to be “front-loaded”, while some mitigation measures like CCS were likely to take decades to be delivered at scale.

However, the most headline grabbing aspect of the report – one subsequently picked up by everyone from the UN Secretary-General Antonio Guterres to Labour Leader Keir Starmer – was the unequivocal warning that for the Paris Agreement’s overarching net zero objective to be met, all new oil exploration would have to have halt from 2021 onwards. The world has enough fossil fuels from existing projects to burn through what remains of the carbon budget for limiting warming to 1.5C goal.

And yet, the oil industry continues to invest in new projects and Exxon remains among the largest of the companies still pursuing new exploration that would generate additional oil and gas supplies for decades to come. Oil and gas that, as the IEA analysis makes crystal clear, is highly likely to lead to a breaching of the goals of the Paris Agreement.

And unlike its European counterparts – such as BP, Total, and Shell – the Exxon line on Scope 3 targets, which cover when and how their products are burnt or consumed, remains obdurate. Just last weekend, the company told the Financial Times that “we believe setting Scope 3 targets can have significant unintended consequences for society”.

Among the consequences for society of companies like Esso being required to count and then reduce their Scope 3 emissions would be customers transitioning faster towards clean energy sources and prioritising energy efficiency in their business or daily lives. Exxon continues to maintain that such deep decarbonisation would degrade living standards. Others, including some of its peers, counter that energy efficiency and clean technologies can reduce energy costs and enhance living standards.

The latest pronouncements from Exxon remain of a piece with its long and ignominious track record on climate-related issues. For a long time, Exxon was a prominent member of the American Petroleum Institute, one of the main US organisations working to challenge scientific findings on climate change. This was despite Exxon scientists having established the damage rising global temperatures would inflict more than half a century ago – a fact laid bare in 2019 hearings at the US Congress.

For all its occasional and modest investments in clean technologies, Exxon’s defence of its polluting business model and its controversial lobbying tactics have been going on for decades. Back in 2001 I wrote a column for the New Statesman detailing just some of the examples of the company’s scurrilous lobbying activities, including the tale of its former European lobbyist Basil Ziminis who sought to encourage the academic behind the macroeconomic model that informed the European Commission’s plans for a $10 per barrel tax on oil consumption to revisit his calculations and incorporate certain variables that were more to oil producers’ liking. The academic in question, Professor Pantelis Capros of the Technical University of Athens, promptly contacted his original paymasters at the European Commission, who quickly publicised this curious request. Exxon was publicly embarrassed and the macroeconomic model making the case for a tax on oil remained intact, but even so the proposed levy was still eventually shelved.

The column – like a more recent sting exposing an Exxon lobbyist bragging about the tactics they deployed to help water down US climate legislation – caused something of a stir. In its response to the editor, Exxon stressed what good taxpayers and employers the company directors were – and unsurprisingly – rejected the headline that accompanied my article: ‘Boycott Esso’.

Given that 22 years later the company is still out there publicly lobbying against policies designed to increase the chances of net zero goals actually being met, my recommendation remains the same: Boycott Esso.