The Writing on the Climate Wall: businesses can read it but are they heeding it.
In November 2021 we published an ieBLOG on “The Writing on the Climate Wall: Businesses and industries can read it.” We argued that in light of recent developments, including uncontested scientific studies and the shift in public awareness, partly resulting from spreading and intensifying extreme weather events, a certain consensus had been reached.
… businesses and industries increasingly understand what is happening with the climate. Like it or not the world has changed and will change even more and faster, and there is no going back. If they want to survive and prosper, they have to build and operate for a world run by renewable energy and sustainable practices. It is in their own best interest. And ours.
We also noted that:
But we’re not delusional about any fundamental transformation of how business is conducted across the globe. While we argue that certain changes are inevitable, that only means they are “certain to happen; unavoidable.” But it is not clear just when they will happen. And with climate breakdown things can turn deadly quickly.
Things are indeed turning deadly quickly. Is business heeding what they see clearly written on the wall?
Clearly not some. Take for instance Exxon Mobil, always the prime suspect in any anti-social behavior that undermines the public good. While a number of the biggest players in the fossil fuel arena are investing in renewable energy, Exxon is buying one of the largest shale companies in the US, Pioneer Natural Resources, a major player in fracking. It is Exxon’s largest deal since its merger with Mobil Oil in1998 and represents a bet that fossil fuel production in the US has a bright future, if you consider more CO2 in the atmosphere illuminating.
ExxonMobil was not alone in its embrace of more oil, as Chevron has agreed to buy the American oil and gas producer Hess Corporation. Both Exxon and Chevron are investing, in part, the huge profits they have enjoyed from the public as result of the recent energy crisis.
In contrast, some of the larger European energy majors, including BP and TotalEnergies, are expanding investment in renewable energy at a faster pace than the US competitors.
At the same time Exxon and Mobil were doubling down on their commitment to more oil and gas, the International Energy Agency (IEA) was projecting a peaking of demand for fossil fuels by 2030. As the Executive Director, Faith Birol, has stated: “The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us’.”
While the IEA and fossil fuel companies differ, only one has a vested financial interest in the continuing expansion of fossil fuel usage. So who do you believe?
It might be a bit paranoid but we cannot exclude the possibility that Exxon could be using its $60 billion in the purchase of Pioneer simply to try to persuade the public and policy makers that fossil fuel is here to stay so there’s no use trying to curtail its usage.
Or perhaps Exxon is doing only what it knows best: acquiring assets in order to generate cash flow, and profits. But here’s the rub to that approach. The world is changing and there are some cheap widely-adopted alternatives for energy beyond fossil fuels. Perhaps these recent acquisitions are the last gasp from an aging and outdated business model. Maybe Exxon and others are having their own deadly Kodak Moment: refusing to acknowledge that their product (film camera) is outdated and being replaced by a new technology (digital camera).
Kodak, formerly one of the country’s largest companies, declared bankruptcy in 2012.
“The Writing on the Climate Wall: Businesses and industries can read it,” ieBLOG in irish environment (1 Nov 2021) at https://www.irishenvironment.com/blog/the-writing-on-the-climate-wall/
Callum Jones and Dharna Noor, “Exxon reinforces support for fossil fuels with deal to buy shale giant for $60bn: Deal to buy Pioneer Natural Resources shows Exxon’s confidence that fossil fuel output will not be hampered in years to come,” The Guardian (11 Oct 2023). bit.ly/46xjSR4
David Sheppard and Ian Johnston, “Chevron betting on lasting fossil fuel demand with $53bn purchase of US oil producer Hess: All-stock deal comes after ExxonMobil acquired Pioneer Natural Resources earlier this month,” The Irish Times (23 Oct 2023). bit.ly/3MpSiNP
Clifford Krauss, “Chasing Big Mergers, Oil Executives Dismiss Peak Oil Concerns,” New York Times (26 Oct 2023). bit.ly/47aw1vl
International Energy Agency, World Energy Outlook (WEO) (Oct 2023). See IEA,” The energy world is set to change significantly by 2030, based on today’s policy settings alone” (with link to full WEO-2023 report). bit.ly/3tZPQaw
Brad Plumer, “Fossil Fuel Use Will Peak by 2030, Energy Agency Says,” The New York Times (25 Oct 2023). bit.ly/3QGWpaR
See “Kodak Moment” in iePEDIA section of current issue of www.irishenvironment.com (Nov 2023)