In a New York Times interview published in November 2006, Paolo Scaroni , the chief executive of Eni of Italy (one of the world's largest oil companies) spoke candidly (rare for a Big Oil executive) about the industry and spoke openly about his opinion on oil prices and the American consumer. In Scaroni's opinion, American consumer's have the strongest effect on the rising oil prices and the increasing consumption. A statement I believe that most of us wouldn't dare disagree with due to the fact that we (American's in general) seem accustomed to a certain way of life and often appear unwilling to reduce our consumption. Two of Eni's chief executives comments I couldn't so quickly accept, were his denial that prices are too high and denial that the Big Oil companies are making as much profit as the general public assumes them to be.
http://www.nytimes.com/2006/10/07/business/07interview.html?_r=1&oref=slogin
If the oil giants aren't making as much profit as we think, why are profits significantly rising with each passing year? According to CNN Money, in 2007 "ExxonMobil, the world's largest publicly traded oil company, is within striking distance of setting an all-time profit record - again." The previous record was from 2006. CNN reported expected annual earnings for ExxonMobil for 2007 are a whopping $39 billion - or about $106 million a day, $4.4 million an hour and $73,000 a second.
http://money.cnn.com/2008/01/23/news/companies/exxon_profits/index.htm?cnn=yes
The February 27, 2008 publication of International Herald Tribune countered what Paolo Scaroni had stated a year earlier. Based on numbers released by the Energy Department, and analyzed by industry experts, US consumption (more than any other country relying on petroleum as a main means for energy) has considerably slowed. The spike in oil prices "could not come at a worse time for the economy. The effect of high oil prices today could be the difference between having a recession and not having a recession," said Kenneth Rogoff, a Harvard University economist.
http://www.iht.com/articles/2008/02/27/business/26gasweb.php?page=1
Where are all these profits going? To research renewable energy resources in preparation for the foreseen oil crisis? To mitigate the effects of oil pollution on the environment? To find solutions to Global Warming?
Probably not.
According to a press release found on ExxonMobil's official website, Global Warming, termed Climate Change, is a "complex area of scientific study" and however important the subject was, the release reminded consumers to keep "in mind the central importance of energy to the economies of the world." What are they saying? That energy and it's convenience should be valued over the health of the planet? The press release went on to state that in the future ExxonMobil would continue to do it's part in the research to reduce the effect of CO2 and other greenhouse gases on the Climate, but only when the efforts fit into the organizations policy options. Some of the factors for analyzing options were listed in the statment including:
- consider priorities of developing world
- minimize complexity and administrative costs
Does it really sound like they intend to sacrifice some of their enormous profits on Climate Change research? Why do Big Oil companies use the term Climate Change? The term sounds less menacing to me. Sounds "greener", don't you think?
3 comments:
I would argue that "Global Warming" is just as loaded as "Climate Change." Framing is what it is all about. Thirty years ago we were told that another ice age was certain, now it is global warming. Our limited historical mapping of the earth and its cycle makes it very dificult to make predictions of causation. Our impact is hard to measure. "Global Warming" would probably occur in our absence. The rate at which it occurs is another question. Eat, drink, and be merry for tomorrow we die. As Keynes once said, "in the long run we're all dead." so...enjoy today at the expense of tomorrow!
Unfortunately I'm not a scientist and I can't speak for the scientific world. What I can say is that based on my knowledge I would tend to agree with those scientists that are raising the awareness on global warming and its close connection to greenhouse gases. I don't think that Big Oil has to use its profits to develop solutions to the heavy oil dependence in the world economy. That reasoning sounds like a goverment helping its citizens find loopholes in the tax code. It just doesn't make sense. Big Oil would research fuel alternatives only if there are better profits to be made in renewable energy.
I agree that Big Oil would invest more money on alternative energy research if there was more of an immediate profit. But, wouldn't they worry about the "Peak Oil" problem just as much as the rest of us, if not more? It is getting harder and harder for the Big Oil companies to find oil and each organization has reported financial loss when new oil wells don’t end up producing like they had expected. I would think that at least one of the Big Oil Execs would realize that it is only a matter of time before their profits start to slip and an investment in an alternative now could possibly save them in the future.
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