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Is ExxonMobil Starting to Take the Fossil Fuel Divestment Movement Seriously?

Posted By Lowell F. on October 14th, 2014

Is ExxonMobil starting to worry about the fossil fuel divestment movement?  Based on this article, it certainly looks that way.

Exxon Mobil is wielding its public relations might against the fossil-fuel divestment movement, signaling that climate-change activists have struck a nerve at the world’s biggest publicly traded oil and gas company.

Exxon Mobil’s blog, titled “Perspectives,” posted a lengthy attack Friday about the divestment movement, which urges universities, churches, pension funds, and other big institutional investors to dump their shares of oil and coal companies as part of the fight against global warming.

But the blog post calls the movement “out of step with reality,” saying it’s at odds with the need for poor nations to gain better access to energy, as well as the need for fossil fuels to meet global energy demand for decades to come.

So far, the climate advocates’ progress at getting a growing number of institutions to shed holdings in fossil fuel companies remains pretty small compared with the scale of the industry they’re battling.

But, the article adds, while the fossil fuel divestment movement may be small now, it’s growing fast. As a result, the fossil fuel divestment movement clearly has ExxonMobil nervous, and there’s one clear piece of evidence to prove that’s the case: ExxonMobil’s attacking it. Because, let’s face it, that’s what the fossil fuel industry does when it sees a threat – relentlessly attacks, just as it’s done with clean energy and climate science in recent years. The problem for the fossil fuel industry, though, is that no matter how much money they spend attacking their demons, the reality – plummeting costs and rapidly improving technology for solar and wind, mountains of scientific evidence on climate change driven by fossil fuel combustion – isn’t going away.

All of which means the harsh reality for ExxonMobil and other fossil fuel companies is that, while they certainly are big and powerful today, that situation could change in a hurry. And if the fossil fuel folks don’t believe that, all they have to do is look at the land line telephone companies of the 1970s in the era of cell phones and Skype, or the traditional journalism business model in the internet age, then figure out if that could be them.  While they’re pondering this question, they might also consider whether in 10-20 years, will they be: a) kicking themselves for fighting the inexorable shift towards clean energy; or b) patting themselves on the back for joining it? At least at the moment, it looks like they’re foolishly, stubbornly sticking with option “a”.

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“Koch could not compete if it actually had to pay for the damage it did to the environment”

Posted By Lowell F. on September 27th, 2014

We’ve written a great deal about how the powerful, entrenched fossil fuel industry leverages its incumbent advantage to game the U.S. political system. Among other things, all those profits from extracting and processing dirty energy help ensure that the government, which is theoretically supposed to look out for the public’s health and well-being, allows the fossil fuel companies to treat the air and water as a common sewer they can use for free. As if it’s not bad enough that the true health and environmental costs of fossil fuels are not “internalized” into the price of oil, coal and natural gas, these companies also have the chutzpah to continue accepting millions of dollars a year in taxpayer-funded corporate welfare. All the while, they fund a network of “think tanks” who spend their days denying climate science and falsely smearing clean energy. In short, it’s quite a racket they’ve got going.

Now, Rolling Stone has an amazing expose of perhaps the epitome of everything mentioned above – the Koch brothers and their “toxic empire.” We strongly recommend the entire article, even though it’s long.  For now, here are a few “highlights”:

  • This company is huge: Koch Industries brings in $115 billion in annual revenue, making it “America’s second-largest private company after agribusiness colossus Cargill.”
  • It makes this money essentially by trashing the planet. As the Rolling Stone article puts it: “Koch Industries’ toxic output is staggering…only three companies rank among the top 30 polluters of America’s air, water and climate: ExxonMobil, American Electric Power and Koch Industries” and “13th in the nation for toxic air pollution.”
  • The de facto “license to pollute” granted to the Koch brothers “amounts to a perverse, hidden subsidy” whose “cost is borne by communities.”
  • Koch Industries “has woven itself into every nook of the vast industrial web that transforms raw fossil fuels into usable goods…controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline.”
  • The company is also “a key player in the fracking boom.”  As part of that fracking boom, “Thanks to the Bush administration’s anti-regulatory­ agenda – which Koch Industries helped craft – [Koch subsidiary] Frac-Chem’s chemical cocktails, injected deep under the nation’s aquifers, are almost entirely exempt from the Safe Drinking Water Act.”
  • “Koch is also long on the richest – but also the dirtiest and most carbon-polluting – oil deposits in North America: the tar sands of Alberta.”
  • “According to sworn testimony from former Koch employees, the company operated its pipelines with almost complete disregard for maintenance.”  It also covered up “small spills” and “falsif[ied] pipeline-maintenance records filed with federal authorities.”
  • Koch Industries was slapped with multiple, major fines for violations of federal environmental laws — but they didn’t particularly care. Instead, the company’s attitude was that “regulatory fines ‘usually didn’t amount to much’ and, besides, the company had ‘a stable full of lawyers in Wichita that handled those situations.’”
  • The Koch’s bottom-line business model is to “exploit breakdowns in the free market…profit[ing] precisely by dumping billions of pounds of pollutants into our waters and skies – essentially for free,” and “get[ting] richer as the costs of what Koch destroys are foisted on the rest of us – in the form of ill health, foul water and a climate crisis that threatens life as we know it on this planet. “
  • And finally, the best line of the entire article: “Richard Fink, head of Koch Company’s Public Sector and the longtime mastermind of the Koch brothers’ political empire, confessed to The Wichita Eagle in 1994 that Koch could not compete if it actually had to pay for the damage it did to the environment.” That pretty much sums it all up.
Posted in Fossil Fuels, Oil
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Sen. Lamar Alexander: Taxpayer-Funded Corporate Welfare Bad, Except When It’s For Fossil Fuels

Posted By Lowell F. on August 27th, 2014

See below for the latest example of Sen. Lamar Alexander’s relentless push for continued, even increased, taxpayer-funded corporate welfare to the fossil fuel industry.

Sen. Lamar Alexander (R-Tenn.) called on the administration to expand oil and gas drilling in the Outer Continental Shelf.

“There is no reason we shouldn’t be using all the resources we have available to increase our energy security, create more jobs at home and reduce our reliance on oil from countries that want to do us harm,” Alexander said Tuesday.

He made the comments after he and 20 other Republicans sent a letter to Interior Secretary Sally Jewell. Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) led the letter. The lawmakers asked that the department make all offshore oil and gas resources in the Outer Continental Shelf available for development.

Now, contrast that with Alexander’s opposition to popular, effective pro-wind policies, which he calls a…yes, you guessed it, “wasteful taxpayer subsidy.” Even more internally inconsistent and illogical, Sen. Alexander claims that we shouldn’t be subsidizing a “mature technology,” which he argues “should stand on its own in the marketplace.”  Yet here he is again, pushing to do exactly that: subsidize one of the most mature technologies known to man — drilling holes in the ground and pumping out oil, something we’ve been doing for well over a century now, and something that certainly doesn’t require government tilting the playing field in its favor at this point.

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New Study: Large Oil and Gas Companies Pay Miniscule Tax Rate

Posted By Lowell F. on August 3rd, 2014

Recently, we noted an analysis on The Great Energy Challenge blog by Bill Chameides, Dean of Duke’s Nicholas School of the Environment, which found an incredible 30 to 1 ratio in favor of fossil fuels when it comes to political contributions in the 2011-2012 campaign cycle, as well as a 7:1 ratio for lobbying expenditures in favor of fossil fuels. At the time, we asked what all that money bought. Our theory: all those campaign contributions and lobbying expenditures purchased a great deal of policy influence in Congress for the fossil fuel industry. In turn, that influence helped ensure that the taxpayer-funded corporate welfare gravy train to the fossil fuel industry continued, while simultaneously slowing down momentum towards a clean energy transition, heading off a price on carbon; etc.

Now, a new study by Taxpayers for Common Sense confirms our theory — in spades.

From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.

According to their financial statements, 20 of the largest oil and gas companies reported a total of $133.3 billion in U.S. pre-tax income from 2009 through 2013. These companies reported total federal income taxes during this period of $32.1 billion, giving them a federal effective tax rate (ETR) of 24.0 percent. Special provisions in the U.S. tax code allowed these companies to defer payment of more than half of this tax bill. This group of companies actually paid $15.6 billion in income taxes to the federal government during the last five years, equal to 11.7 percent of their U.S. pre-tax income. This measure, the amount of U.S. income tax paid regularly every tax period (i.e. not deferred), is known as the “current” tax rate.

Four of the companies in this study – ExxonMobil, ConocoPhillips, Occidental, and Chevron – account for 84 percent of all the income and paid 85 percent of all the taxes for the entire group. These four had an ETR of 24.4 percent and a current ETR of only 13.3 percent. The smaller firms paid an even smaller share of their tax liability on a current basis. When the top four companies and those with losses are excluded from the analysis, the remaining companies reported a 28.9 percent ETR on U.S. income, but only a 3.7 percent current rate. They deferred over 87 percent of their tax liability.

The bottom line is that the fossil fuel industry invests a lot of money into our political system, and receives a healthy return on that investment. How healthy?  According to Oil Change International, during the 111th Congress (2009-2010), fossil fuel lobbying expenses amounted to a whopping $347 million, but the reward was $20.5 billion in taxpayer dollars, for a 5,800% “return on political investment.” And that’s not even counting the low tax rate paid by fossil fuels, just the subsidies doled out to this super-wealthy industry every year.  Also, see this report by the Center for American Progress, which found that despite the five big oil companies “earn[ing] a combined total of $93 billion” in 2013, they still fought to maintain – and even expand – “their $2.4 billion-per-year tax breaks.”

So, next time you hear the fossil fuel folks claiming that it’s actually clean energy which is heavily subsidized, and which supposedly can’t survive without government support, point them to this article and tell them to…well, have a nice day.

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InsideClimate News: Koch Brothers Built Their Fortune on Super-Dirty Tar Sands Oil

Posted By Lowell F. on July 22nd, 2014

In light of the attacks on Tom Steyer from sources linked to the Koch Brothers, InsideClimate News posted a story the other day providing a detailed account of how the Koch brothers made their money. To put it mildly, it’s not a pretty picture.

Steyer’s turnaround took moral courage, they argued, and asked: What about the Koch brothers? What is their history with global warming emissions?

It turns out the Koch brothers built their first fortune on the particularly dirty form of oil mined in Alberta’s tar sands, where they have been major players for 50 years, and remain deeply invested.

The key moment came in 1969, when Charles Koch secured full ownership of a heavy oil refinery in Minnesota that his father had a stake in.

In his 2007 book Charles Koch called that acquisition “one of the most significant events in the evolution of our company.” The refinery was a doorway that permitted Koch Industries “to enter chemicals and, more recently, fibers and polymers,” he said.

If you want to know more about the Koch brothers and how they built their fortune, InsideClimate News has a helpful timeline with detailed information. It’s well worth checking out, just so we all know exactly what we’re up against with these folks.

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