Big Oil, Their Managements, Shareholder/Owners, and Climate Risk.

ExxonMobil Management are trying to take the Company away from shareholders under the excuse only They understand Climate Risk. Is this right or is it only a simple power grab?

When it comes to how to deal with potential other energy source than oil and gas, all the Big Oil Companies have acted in the same way this time around. And it is a very strange path to take. One they have never used before. New sources for oil and gas have always been looked after by the existing knowledge within. When they started looking at coal, they used their own expertise and only took in new as was needed. All of them have been dealing with electricity for a long time and have lots of people, resources, and knowledge of the field. When they came across renewable energy sources they were also dealt with in the same ways. They have for instance all been dealing with hydro for years.  

But when the politicized windmills and solar panels came, they change, all of them. They all hired fresh staff, with no overlapping at all. Why? Risk or as their management sees it, political risk. Modern renewables have nothing to do with energy, only politics. In their view: NO ONE is insane enough to think that oil, gas, or coal can be replaced with solar panels and windmills. Therefore, the risk is not energy fundamental, just political.  

It is not that they do not believe or agree with climate science.  It is just that the politically chosen alternatives to fossil energy are no option.   They think that they can deal with the emission problems which they accept, they have, via carbon capture.  And this will be paid for by the taxpayer, other polluters, or someone else, just not them.  There are no alternatives to oil and gas as they see it.

And looking at the data, it looks like they are right. The shit is already hitting the fan over politically motivated solutions. Emissions are going up, demand for oil, gas and coal has never been better and soon the politicians will come running to them. In some countries the run has started.  

Some of their owners see things differently. They are concerned that the rise in CO2 cost will lead to other energy sources becoming far more competitive. And they are already proven right. Our Top End Australian operations can produce negative emission diesel, jet fuel and gasoline for nothing at a CO2 price of 15 USD/ton, currently it is 50 USD/ton. It can be done in volume, and then we mean crude oil replacement volume.  

Both shareholders and management are right in their own ways. The problem is that the top management right is very weak and should totally fail as their solution is many, many times more expensive than other ways. Especially ours.  

Why did not management see this coming? It is all because they do not have any overlapping with their own new renewables unprofitable and therefore noninfluential departments.  

Some shareholders at least saw the risk. And that is due to them being on the outside.

The old oil market saying: We never make money due to our organizations, but despite them. Still stands.  

Seeing risk from different standpoints adds to total knowledge, not subtracts.  

Therefore, the conclusion must be that the management in ExxonMobil’s position is one of pure power. They should see what their owners are telling them and change their approach. Start developing biofuels instead of gambling everything on a political bailout by carbon capture. Top management in ExxonMobil will have to go.