Protestors hoping to give ExxonMobil Corporation a public relations black eye for not backing their anti-energy agenda found themselves being shamed at the company’s annual shareholder meeting May 29 in Dallas.
The Dallas protest was to be the high point of a series of events that took place around the country organized by a group calling itself “Campaign ExxonMobil.” The group claimed to represent “concerned shareholders” calling on ExxonMobil’s management to embrace higher mandatory fuel economy restrictions and other restrictions on consumer energy use.
Protestors embarrassed outside …
The protest march on May 29, meant to be the focal point of “Campaign ExxonMobil”, drew an assortment of advocates of Marxism, anti-capitalism, and alternative lifestyles now a familiar sight at such carefully orchestrated media events. While the trained marchers surprised no one with their anti-SUV slogans, many reporters were more intrigued by a contingent of free-market environment advocates who were also present. Their pro-energy chants and signs emphasized the benefits of ample and affordable energy and the dubious science behind “global warming” and other controversial environmental issues.
One anti-energy protestor, who would identify himself to the gathered media only as “Luigi,” called for Americans to “burn” all SUVs.”They are horrible! They are useless! Most people should be able to get by with a two-door car for the same thing they use SUVs for.”
However, the anti-SUV protestors had some explaining to do when they climbed into a Ford Econoline full-sized van after their day of demonstrating.
“SUV alert!” chanted free-market counter-demonstrators as the protestors climbed into their van. “Gas guzzler! Gas guzzler!” began another chant.
Carol Jones, one of the counter-demonstrators and a member of Citizens for a Sound Economy, pointed out the hypocrisy of anti-corporate protestors. “They always bring all their blow-up [props] in SUVs, which they are [allegedly] totally against,” she observed.
Jones added, “[The protestors] don’t want us to have SUVs, but they just got to have their SUVs.”
Sales figures and surveys show SUVs, vans, and trucks are extremely popular with American consumers. According to Environmental Protection Agency figures for the 2001 model year, the Ford Econoline achieves roughly 13 miles per gallon in the city and 21 miles per gallon on the highway.
… and rebuffed inside
Inside the shareholder meeting, anti-energy protestors fared no better. Although their spokespersons were allowed to speak uninterrupted, their resolutions were repeatedly defeated by wide margins. A resolution requesting that ExxonMobil’s board of directors outline plans to promote renewable energy sources, the centerpiece of “Campaign ExxonMobil”, was voted down by a lopsided 80-to-20 margin.
Lee Raymond, chief executive officer of ExxonMobil, told the Wall Street Journal “if our main competition wants to invest in solar, God bless ’em.”
In a report on “corporate citizenship” released by ExxonMobil in May, the company emphasized its success in dramatically reducing air pollutant emissions from its operations, minimizing oil spills, and expanding cogeneration capacity to reduce energy consumption. According to the report, the company improved energy efficiency in refineries and chemical plants by more than 35 percent between 1973 and 1998.
In the same report, ExxonMobil said the risk of “global warming” should be addressed by scientific research to improve understanding of climate change and its potential risks, implementing economic steps to reduce greenhouse gas emissions now, and research on innovative, advanced technologies with the potential to dramatically reduce emissions in the future.
“We are actively engaged in this type of research to meet consumer demand for new, affordable and environmentally improved products,” the report says.
“Campaign ExxonMobil” makes its case for why the company must cease being an oil company and embrace alternative energies in a paper titled “Report: ExxonMobil Stance on Climate Change Jeopardizes Billions of Dollars in Shareholder Value.” According to the report:
- ExxonMobil risks its reputation among alternative fuel activists by continuing to produce and sell oil.
- The trial lawyers who are suing the tobacco and fast food industries may soon turn their attention to ExxonMobil.
- ExxonMobil risks being caught “flat-footed” if some undiscovered technology suddenly transforms biomass and wind energy into cost-effective products.
- ExxonMobil is missing an opportunity to corner the energy market by transforming itself into a natural gas company and then pushing for legislation banning or severely restricting all other forms of economically viable energy, such as oil and coal.
Few experts of energy or marketing would agree with any of these points. For example, while many consumers voice support for “green” products when asked, few are willing to pay more for them. Alternative fuel activists are too few in number, and their energy use too small, for oil companies to worry about losing.
While lawsuit abuse is rampant, it is difficult to imagine successful legal action against oil companies for contributing to poor air quality or to “global warming.” ExxonMobil has, however, felt the sting of litigation over the Exxon Valdez oil spill of 1989.
While every company faces the risk of a new discovery that renders its products obsolete, there is no plausible scenario in which the world’s reliance on fossil fuels would abruptly end. More likely, other energy sources will gradually gain market share over the next one hundred years as fossil fuel supplies grow more expensive, giving companies such as ExxonMobil ample opportunity to diversify.
Curiously, while the report urges shareholders to learn a lesson in corporate responsibility from “the Enron debacle,” it fails to mention Enron’s troubles stemmed from its strategy of attempting to corner the market on natural gas and then lobbying the federal government to ban or severely restrict the oil and gas produced by its competitors. This, of course, is exactly the misguided advice “Campaign ExxonMobil” is giving the company today.
A threat to shareholder value
Mark Mansley, author of the “Campaign ExxonMobil” report, offered up the same dire warnings and made the same recommendations seven years ago in a paper titled “Long Term Financial Risks to the Carbon Fuel Industry from Climate Change.” Had ExxonMobil heeded in 1995 Mansley’s advice to divest itself from the oil business and transform itself into a biomass and alternative-fuel company, there wouldn’t be “Billions of Dollars in Shareholder Value” left to endanger. Biomass and other “renewable energy sources” are just as expensive, unprofitable, and unpopular with consumers today as they were in 1995.
All of which was not lost on ExxonMobil shareholders, who realized their best course of action was to give the market what the market wants: proven sources of cost-efficient energy. In the end, “Campaign ExxonMobil” protestors were as successful in advancing their agenda inside the shareholder meeting as they were at avoiding hypocrisy and embarrassment outside the meeting.