Rex Tillerson, CEO of Exxon Mobil speaks in Houston, Texas, on April 21, 2015. Bloomberg/Bloomberg via Getty Images
ExxonMobil rejected several environmental proposals at its annual shareholder meeting on Wednesday, when its CEO Rex Tillerson spoke out strongly against the validity of climate change. Motions to add a board member who specializes in climate change, to issue a report on the company’s fracking practices, and to reduce greenhouse gas emissions from its products were all rejected with less than 25% of shareholders in favor.
According to A.P., Tillerson said that models predicting the effects of global warming “just aren’t that good,” and that it would be very difficult for the world to meet aggressive emission-reduction targets. He further noted that technology can help deal with rising sea levels or changing weather patterns “that may or may not be induced by climate change.” Tillerson added, “Mankind has this enormous capacity to deal with adversity. I know that is an unsatisfactory answer to a lot of people, but it’s an answer that a scientist and an engineer would give you.”
Tillerson reiterated his long-held view that renewable energy is not economically viable yet, saying “We choose not to lose money on purpose”- which led shareholders in the hall to applaud. (By contrast, Royal Dutch Shell agreed in January to back a shareholder resolution requiring the company to commit to reduce emissions and invest in renewable energy.)
Furthermore, Exxon and Chevron have declined to join European oil firms in a common strategy ahead of the U.N.’s climate talks in Paris this December. “No thank you, that would not be us,” Tillerson said. “We’re not going to be disingenuous about it. We’re not going to fake it…We’re going to express solutions and policy ideas that we think have merit.” Exxon would support a carbon tax if a consensus emerges in the U.S. for climate action, not hurriedly adopting carbon limits based on current modeling technology, which Tillerson warned could have costly long-term consequences for shareholders.
And there is no shortage of opportunities for Exxon’s business-as-usual track. On May 20, the firm announced a “significant oil discovery” in the waters off of Guyana. “I am encouraged by the results of the first well on the Stabroek Block. Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block,” reported Stephen M. Greenlee, president of ExxonMobil Exploration Company.
Additionally, on May 25 Mexico announced one of ExxonMobil’s subsidiaries had been pre-qualified, along with 18 other foreign companies and consortia, to bid in a July 15 tender for exploring offshore oil blocks in the Gulf of Mexico. It will be the country’s first tender open to foreign investment in the hydrocarbon sector, following the momentous legislation passed by Mexico’s Congress last year that broke Pemex’s absolute monopoly over the entire Mexican energy sector.
Low oil prices have taken a lot of incentive out of major new investments, and ExxonMobil is indeed reducing its capital expenditures - from $38.5 billion last year to $34 billion this year and unspecified lower amounts in 2016 and 2017. With tighter finances, the firm can be pickier about which projects to invest in, but political pressure over climate change is by no means putting it out of business.
