Category — Exxon Mobil
At the May 29, 2013, annual meeting of Exxon Mobil in Dallas, CEO Rex Tillerson adroitly responded to questions concerning the human influence on climate and energy choices in light of climate science. His points? The science is uncertain as to the magnitude of change; there has not been warming in the last decade; and fossil fuels are necessary for the masses, particularly the energy poor. As he asked a questioner:
How do you want to deal with that great social challenge to what good is it to save the planet if humanity suffers in the process of those efforts when you don’t know exactly what your impacts are going to be?
Friendly Floor Comments
Some statements from the floor were friendly. “It’s funny,” said one. “You have helped to find enough oil and gas in this country so that the protestors here [could] leave their heated and air conditioned homes and fly and drive here so they can protest the way Exxon runs their business.” Said another:
We wish to commend the company’s management in this regard for not surrendering and for standing up for what not only is good for this company but quite literally to the United States itself. We urge our fellow shareholders to stand up for liberty lower taxes, government accountability and free markets….
In this regard, Tillerson did not state any need or preference for a unilateral U.S. carbon dioxide emissions tax (carbon tax) as a way to address emissions. Resting his case on climate realism, he defused a controversy and made his opponents look like a fringe, religious group in the court of public opinion.
June 4, 2013 5 Comments
A death announcement last week in the Houston Chronicle caught my eye. I never met the late Stephen Simon, but what I read made me realize that the quiet heroes and heroines of free-market capitalism need to be saluted now and then. For they are the wealth creators and real philanthropists versus the political system’s wealth redistributionists and wealth destroyers.
Here is the essence of this man. An engineer. More than 40 years with a major energy company in a variety of advancing positions at home and abroad. Successful. Private sector philanthropist with his time and money.
And through it all, a ”heroic capitalist” in the Smith-Smiles-Rand tradition (see Part I of my Capitalism at Work). A practitioner of Principled Entrepreneurship ™.
Think of what Julian Simon would have said about Stephen Simon (no relation): He created more than he consumed to leave us resource richer. And he used that wealth to create still more wealth and advance civil society.
Finally, think of Mr. Simon and his company when you think about the names that made the news at the once rival of ExxonMobil, the late Enron. (Enron’s Ken Lay, in fact, joined Exxon two years before Simon as a corporate economist before going to Washington for various assignments and never really getting politics out of his blood.)
The obituary follows: [Read more →]
July 18, 2009 No Comments
I have previously described Exxon Mobil as the anti-Enron. In an opinion-page editorial in yesterday’s Houston Chronicle, I contrasted the two companies in terms of both energy strategy and public policy.
More could be said than is in the editorial (reprinted below). Enron’s first fraud, engineered by Andrew Fastow, came with the purchase of Zond Corporation, which was renamed Enron Wind Corporation and is now part of GE Energy. (This complicated story about a “qualifying facility” under federal energy law is told in McLean and Elkind’s The Smartest Guys in the Room, pp. 166–67 and Kurt Eichenwald’s Conspiracy of Fools, pp. 142–44.)
So Enron’s “green” strategy was at the core of its business problems and legal problems, a theme that I will detail in a forthcoming book.
Also, some of the points made below have been the subject of MasterResource posts, such as: [Read more →]
June 15, 2009 5 Comments
Energy Reality Wins at Exxon Mobil Annual Meeting (Atlas is not shrugging at this substance-over-form company)
If only the United States economy were as strong as ExxonMobil. If only energy realism and free-market consumer service were guiding lights in Austin, Texas; Washington, D.C.; and other seats of political power.
The good news from Exxon Mobil’s annual stockholders meeting in Dallas earlier this week is that the company is focused on its core competencies amid the energy politicization around it. No Enron political machinations here!
In fact, Exxon Mobil is the anti-Enron of corporate America, a rebuff to Ken Lay, who once worked at Exxon, and Jeff Skilling, who declared in 2000: “You will see the collapse and demise of the integrated energy companies around the world. They are going to break up into thousands and thousands of pieces.” (1)
The key messages of Exxon Mobil CEO Rex Tillerson were:
- Petroleum as a primary energy source is the future, not only the recent past. (Comment: renewable energies once had a 100% market share, corresponding to mankind’s energy poverty era.)
- Developing politically dependent renewable energies such as wind and solar are not the company’s forte. (Comment: Exxon Mobil is implicitly practicing Principled Entrepreneurship ™, a socially responsible business model.)
- If carbon dioxide is to be priced, a tax is preferable to cap-and-trade. (Comment: Tillerson has not come out in favor of pricing CO2 per se, to my knowledge, and most economists would pick the same of the two options.)
- Win-win emission reduction technologies and strategies are better than politically correct/economically incorrect ones. (Comment: the jury is still out on this, of course, but it will be interesting to see how Exxon Mobil’s R&D bets turn out relative to those of the other energy majors.) [Read more →]
May 30, 2009 6 Comments
Getting Real: The Oil Majors Move Away from Political Energy (Government-dependent wind, solar are not ready for prime time)
A recent article in the New York Times, “Not So Green After All: Alternative Fuel Still a Dalliance for Oil Giants,” chronicled the move away from politically correct (but economically incorrect) wind and solar energy by the oil majors.
Royal Dutch Shell and BP, in particular, recognize wind and solar as what they are: dilute, intermittent energies that are not consumer friendly or economic. And their investment returns in the same have been lackluster. Shell and BP have found out what Exxon Mobil learned in the 1970s.
“Oil giants worldwide are skeptical that President Barack Obama’s plans to move the economy away from petroleum will be successful,” Jad Mouawad wrote in the Times. “Many of the oil companies are sticking to their hydrocarbon business model and some are backing away from commitments to renewable power.”
Mouawad summarizes the thinking from these three majors: [Read more →]
April 9, 2009 5 Comments
As reported by Russell Gold at Environmental Capital, ExxonMobil CEO Rex Tillerson has made an incisive new argument against his company’s investing in government-dependent renewable energy.
“If I wanted to kill [tax subsidies], the thing to do is for Exxon Mobil to go and invest heavily in them and then Congress would immediately cancel the tax subsidy. Actually what they would do is they would just cancel it for us,” said Mr.Tillerson, during the annual analyst meeting at the New York Stock Exchange.
He added: “In reality, that is what I fear would happen. So we are not going to go into investments that are dependent on a government providing a tax system to make them viable.”
This is very interesting. Former ExxonMobil CEO Lee Raymond and now Tillerson have argued against investing in politically dependent renewables because they have been-there-done-that, with investor losses in the 1970s. And looking at the present and future technology of wind and solar relative to what ExxonMobil can realistically add, they are not sanguine about going forward in the same area.
But Tillerson is now saying something new: [Read more →]
March 7, 2009 11 Comments
This summer, we had the entertaining spectacle of scions of the Rockefeller family joining with environmental activists such as Greenpeace to urge a change in ExxonMobil’s corporate governance, including redirecting their investment towards green technologies. Part of their argument was that research ‘proved’ that the world would need these new techologies and that they would be economically viable soon.
January 20, 2009 2 Comments
Last week I blogged about the news accounts of ExxonMobil’s coming out in favor of a carbon tax. I was too hasty. I should have read Rex Tillerson’s speech first–and very carefully. Mr. Tillerson did not call for a carbon tax as reported in the Wall Street Journal. Deep in his speech, Tillerson argued that carbon taxation is better than cap-and-trade as a regulatory program.
January 15, 2009 2 Comments
[Note: This post has been superceded by Under Further Review ...]
ExxonMobil’s new corporate position in favor of carbon taxes, reported today by the Wall Street Journal, is not entirely unexpected. It is the result of a policy drift of recent years toward compromise and appeasement with the company’s political critics.
But I doubt that ExxonMobil has bought into alarmism. Back at Enron, where I was director of public policy analysis, we didn’t necessarily buy into climate alarmism but we welcomed the public’s concern because we had seven profit centers (see pp. 3–4) that stood to benefit. ExxonMobil, the anti-Enron, has not set itself up as a rent-seeker, but it apparently wants a seat at the policy table given the perceived choice between a carbon tax and a carbon cap-and-trade scheme.
It is ironic that ExxonMobil’s shift has come at a time when the case for climate alarmism is in growing trouble. Global temperatures are flat, not accelerating, as Chip Knapperberger recently blogged on this site. Climate mini-alarms, as I argue in “Climate-Change Alarmism Runs Into a Reality Check” in today’s Houston Chronicle, have not held up well.
I wish that Rex Tillerson, ExxonMobil’s chairman, would oppose carbon taxes on the grounds that 1) it would hurt motorists and other energy users by raising prices; 2) it is a “solution” for an ill-defined problem; and 3) it could spark an international trade war via border tax-adjustments on countries that do not have such a tax.
But perhaps Mr. Tillerson (or his eventual successor) will change his mind and not support carbon dioxide pricing/regulation per se. Back in 1981, Exxon Chairman C. C. Garvin told a group of environmentalists what they wanted to hear: “Indeed, we believe that in the United States oil use reached its peak several years ago and is on the way down.” That was also when Mobil head Rawleigh Warner predicted that the “brief interlude” of the oil age was coming to a close, and the head of the American Gas Association, George Lawrence, predicted that natural gas would soon be too scarce for industry use (for cites, see pp. 264–65 of Capitalism at Work). They were all wrong by a long shot during this alarmist era.
Government intervention in the name of “sustainability,” not the interaction between man and nature, is the threat to energy sustainability. This may be exactly what Obama’s energy/climate team does not want to hear, but it is good news for mankind nonetheless.
January 9, 2009 4 Comments
There is way too much money being spent on advertising by the major energy companies–at least from the viewpoint of a nonpolitical energy world.
The December 8, 2008, Wall Street Journal, for example, contains a phenomenal 4 1/12 pages of industry ads. For the 20-page front section A, that comes out to about 20%–surely an all-time record. There was a lot of industry advertising back during the energy crises of the highly regulated 1970s, but nothing like this! [Read more →]
December 27, 2008 5 Comments