Big Oil

Moving away from oil could affect investment in oil, warns oil

"While the push for alternatives is important, we must also be mindful that efforts to rapidly promote alternatives could have a chilling effect on investment in the oil sector."

-- Saudi Arabian oil minister Ali Ibrahim Al-Naimi

Revealing skeptics as sock puppets in a few quick clicks

Want to play a fun Friday game? It's called Six Degrees of ExxonMobil. The object: To see how quickly you can get from a denier to ExxonMobil's coffers.

All you need to start is an opinion piece by a global warming denier. Let's take this column by Deroy Murdock for Scripps Howard News Service (he's also a contributing editor for the National Review Online).

OK, let's start. Deroy Murdock is a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. The Hoover Institution has received at least $295,000 from ExxonMobil since 1998.

Wow, wasn't that easy and fun? OK, so it's not quite "Bruce Campbell was in The Majestic with Susan Willis, who was in Mystic River with Kevin Bacon," but the connection is just as reliable.

Half of oil and gas CFOs say we are peaking

It's amazing enough that the normally staid International Energy Agency recently said we've run out of time. Now Business Wire reports:

According to a new survey by BDO Seidman, LLP, one of the nation's leading accounting and consulting organizations, 48 percent of chief financial officers (CFOs) at U.S. oil and gas exploration and production companies agree that the world has reached its peak petroleum (liquid hydrocarbon) production rate or will reach it within the next few years, while another 52 percent disagree with that statement.

I think the headline is wrong, though:

Energy CFOs Are Split on World's Peak Petroleum Production Rate, According to BDO Seidman, LLP.

Chief Financial Officers at exploration and production companies are arguably the most cautious "show me the money" people in the entire energy business. The news is not that they are split. The news is that half think we are peaking or soon will.

Question of the day

Why does Rex Tillerson, CEO of Exxon-Mobil, want a carbon tax?

Raise your hand if your answer is: because he sincerely thinks that is a more effective way to achieve the substantial emission reductions required to forestall catastrophic climate change.

Oil giant forecasts continued rise in emissions through 2050

Exxon-Mobil believes the world is doomed to drought, floods, massive refugee crises, disease, and rising sea levels. According to its "outlook for energy: a view to 2030," global CO2 emissions will rise 30 percent by 2030. That will effectively make holding global average temperatures to 2 degrees over pre-industrial levels -- what the IPCC says is necessary to avoid catastrophe -- impossible. To hit that target, global emissions must peak by 2015.

Of course Exxon doesn't put it that way. They just cheerfully chatter on about all the great energy they're going to sell to meet all that demand -- that is, the role they're going to play in rendering the earth hostile to their grandchildren.

Cheap oil: Be careful what you wish for

This guest essay was originally published on TomDispatch and is republished here with Tom's kind permission.

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Only yesterday, it seems, we were bemoaning the high price of oil. Under the headline "Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year," the July 7 issue of the Wall Street Journal warned that prices that high would put "extreme strains on large sectors of the U.S. economy." Today, oil, at over $40 a barrel, costs less than one-third what it did in July, and some economists have predicted that it could fall as low as $25 a barrel in 2009.

Prices that low -- and their equivalents at the gas pump -- will no doubt be viewed as a godsend by many hard-hit American consumers, even if they ensure severe economic hardship in oil-producing countries like Nigeria, Russia, Iran, Kuwait, and Venezuela that depend on energy exports for a large share of their national income. Here, however, is a simple but crucial reality to keep in mind: No matter how much it costs, whether it's rising or falling, oil has a profound impact on the world we inhabit -- and this will be no less true in 2009 than in 2008.

The main reason? In good times and bad, oil will continue to supply the largest share of the world's energy supply. For all the talk of alternatives, petroleum will remain the number one source of energy for at least the next several decades. According to December 2008 projections from the U.S. Department of Energy (DoE), petroleum products will still make up 38 percent of America's total energy supply in 2015; natural gas and coal only 23 percent each. Oil's overall share is expected to decline slightly as biofuels (and other alternatives) take on a larger percentage of the total, but even in 2030 -- the furthest the DoE is currently willing to project -- it will still remain the dominant fuel.

A similar pattern holds for the planet as a whole: Although biofuels and other renewable sources of energy are expected to play a growing role in the global energy equation, don't expect oil to be anything but the world's leading source of fuel for decades to come.

Keep your eye on the politics of oil and you'll always know a lot about what's actually happening on this planet. Low prices, as at present, are bad for producers, and so will hurt a number of countries that the U.S. government considers hostile, including Venezuela, Iran, and even that natural-gas-and-oil giant Russia. All of them have, in recent years, used their soaring oil income to finance political endeavors considered inimical to U.S. interests. However, dwindling prices could also shake the very foundations of oil allies like Mexico, Nigeria, and Saudi Arabia, which could experience internal unrest as oil revenues, and so state expenditures, decline.

No less important, diminished oil prices discourage investment in complex oil ventures like deep-offshore drilling, as well as investment in the development of alternatives to oil like advanced (non-food) biofuels. Perhaps most disastrously, in a cheap oil moment, investment in non-polluting, non-climate-altering alternatives like solar, wind, and tidal energy is also likely to dwindle. In the longer term, what this means is that, once a global economic recovery begins, we can expect a fresh oil price shock as future energy options prove painfully limited.

Clearly, there is no escaping oil's influence. Yet it's hard to know just what forms this influence will take in the year. Nevertheless, here are three provisional observations on oil's fate -- and so ours -- in the year ahead.

Tim DeChristopher and Utah stand up to Big Oil

I've never been big on rules.

Neither, apparently, is Tim DeChristopher. He's the young activist who just completely derailed the Bush administration's plans to sell more of our public lands to the oil companies.

He sat in the lease sale in Salt Lake City on Dec. 19 and "bought" 22,500 acres of public lands right out from under the suits from Chevron and Exxon.

One small problem -- Tim doesn't actually have the money. It almost doesn't matter, though, because he's monkeywrenched the process so thoroughly that they won't be able to conduct another sale until after the Obama administration takes over -- and thus hopefully never.

Tim needs to raise $45,000 by this Friday, Jan. 9, in order to avoid fraud charges and put the sale out of reach to the Bush administration and their oily friends. He's already raised almost half.

I, for one, will be supporting Tim DeChristoper, Bidder 70, with a tax-deductible contribution via the Center for Water Advocacy in Moab, Utah.

He deserves thanks for reminding all of us that direct action still gets the goods!

Chevron's history of denial, delay, and defamation in the Ecuadorian Amazon

It has been 15 years since a group of Ecuadorian indigenous people filed a lawsuit against Texaco for oil contamination, resulting from 26 years of substandard oil extraction efforts. In those years, Texaco -- acquired by Chevron in 2001 -- consistently has denied responsibility, delayed justice, and defamed the Ecuadorian people who need help the most. In other words, the oil giant has acted like most people expect Big Oil companies to act -- like bullies -- instead of the good corporate citizens that Chevron's advertising campaigns like to portray.

Meanwhile, the Ecuadorians living in Texaco's former dumping ground suffer every day. Texaco released over 18 billion gallons of oil and toxic water into the rainforest from 1964 to 1990. Experts indicate that over 1,000 people have died from cancer. Spontaneous abortions are two to three times more likely to occur in the concession area than in other parts of Ecuador. It's almost impossible to find a family not touched by the illnesses.

Until you see the extent of the contamination, it is hard to believe. Almost 1,000 pits the size of large swimming pools scar an area the size of Rhode Island. Texaco built the pits to dump the remaining oil and toxic water after drilling. To reduce costs, Texaco violated standard industry practice and never lined the pits. As a result, the toxins have flowed directly into the streams and underground water supply. Texaco eventually covered the pits with dirt -- as if hiding the pollution would make it go away -- but never took any real steps to clean up the area. Some people even built their houses on top of the covered pits, thinking that the pits were safe.

Shell greenwashes with a full-page WaPo ad

Shell’s Mad Men win the 2008 award for the most unintentionally ironic greenwashing ad. On Monday (and again today), Shell ran a full-page ad in the Washington Post on carbon capture with this image: Yes, Shell is apparently trying to catch CO2 with a net! Let’s hope they have better luck than either the Bush […]