We Can’t Trust Oil Companies to Regulate Themselves

Newly leaked documents show that ExxonMobil is planning a major increase in oil production, despite warnings from scientists about calamitous climate effects and the company’s own promises. We can’t keep relying on oil companies to regulate themselves — they need to be brought under democratic control.

ExxonMobil plans to make an egregious contribution to global warming over the next few years. (Marvin Scheuring / Flickr)

Eight years ago, twenty governments around the world commissioned a report on the potential death toll of climate change if it proceeds unmitigated. The study examined all of the ways that climate change can result in mass fatalities, from hunger to heat and disaster to disease. It projected that by 2030, seven hundred thousand people around the world would die annually from causes directly linked to climate change.

And death is just one outcome. Hundreds of millions more lives are at risk of being upended by sea-level rise, extreme weather, and desertification. These pressures will cause new migration patterns, especially among the nation’s 1.3 billion people living in poverty, many of them in high climate-change risk zones. This is in turn likely to spur new geopolitical conflicts, which could easily set off chain reactions around the globe. No country is invincible. No way of life is indestructible.

And yet the United States, the world’s largest producer of petroleum and natural gas, is actually rolling back regulations against all urgent advice from climate scientists. Major American fossil fuel producers are operating on the honor system, more or less. And they’re forthcoming with promises.

Last year at the Business Roundtable, for example, several US oil companies promised to “respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.” Also last year, executives from BP, ExxonMobil, and other fossil fuel companies issued a joint promise to take climate change seriously.

They have given us their word. But we would be fools to trust them.

Corporations exist for one purpose alone: to generate profit. They will only budge voluntarily on matters of ethics for a single reason, which is to improve public relations and restore confidence in their company, thus removing various (usually political) obstacles to profit maximization. If capitalists feel that their corporate promises are accomplishing this task well enough, they will not hesitate to break them. For corporations, profit is the highest goal and the ultimate source of all discipline — not the planet or the people on it.

Take the story of ExxonMobil. In 2015, ExxonMobil became the subject of major controversy when journalists and researchers revealed that the company had known about the threat of climate change since the 1970s, had lied about it, and had continued its devastating operations for decades despite what it knew.

This revelation resulted in public outrage, leading 350,000 people to demand that the Department of Justice investigate ExxonMobil. Because politicians need to be seen as responsive to popular sentiment, especially during election campaigns, both candidates for the Democratic presidential party nomination that cycle, Hillary Clinton and Bernie Sanders, also called for a federal investigation of the company.

For ExxonMobil, it was a public relations fiasco. In order to avoid expensive consequences, the company began making insincere climate promises, where before it had been engaged in outright climate denial. ExxonMobil’s website now reads, “We believe that climate change risks warrant action and it’s going to take all of us — business, governments and consumers — to make meaningful progress.”

In a clever spin, the company has even begun touting its decades-old internal research as a positive. The website claims, “ExxonMobil scientists have been involved in the forefront of climate research for four decades, understanding and working with the world’s leading experts on climate.”

It would be naive to think ExxonMobil really turned over a new leaf after this controversy. Indeed, an explosive new leak from Bloomberg shows us just how hollow the company’s promises were. The leaked internal documents reveal that ExxonMobil “has been planning to increase annual carbon-dioxide emissions by as much as the output of the entire nation of Greece” and that “Exxon’s own assessment of its $210 billion investment strategy shows yearly emissions rising 17 percent by 2025.” That 17 percent only accounts for the company’s own oil production operations, not what happens when its product is burned after sale.

The company will focus on production in five key markets: “shale oil in the Permian Basin, offshore oil in waters belonging to Guyana and Brazil, and liquefied natural gas in Mozambique and Papua New Guinea.” As Bloomberg’s Kevin Crowley and Akshat Rath note, “The additional 21 million metric tons of carbon dioxide per year that would result from ramping up production dwarfs Exxon’s projections for its own efforts to reduce pollution, such as deploying renewable energy and burying some carbon dioxide.”

In other words, ExxonMobil plans to make an egregious contribution to global warming over the next few years. Why would the company do this, despite its promises? Because the plan is projected to double the company’s earnings, and earnings are its north star.

ExxonMobil does not exist to meet our society’s energy needs. Like all corporations under capitalism, ExxonMobil exists to turn a profit for its owners and investors. Its true purpose is to make money, and acquiring and supplying sources of energy on a mass scale — however damaging the acquisition, production, and use of those energy sources — is simply its means of fulfilling that higher purpose.

That society’s energy firms do not fundamentally exist to supply energy safely, sensibly, and in the public interest is a contradiction bound to result in the continued destruction of our planet. It is for this reason that energy sector firms must ultimately be nationalized, so that they are democratically governed by the same group that is meant to benefit from them: the public.

There is no reason for companies like ExxonMobil to exist at all. Instead we should have public entities responsible for supplying energy, driven by the logic not of profit maximization but human and environmental flourishing, which will require swiftly transitioning from fossil fuels to renewable energy sources.

Realistically, the Left does not have the power right now to nationalize the energy sector in the United States. At the very least, as we set about building political power for that necessary project, we must demand the urgent imposition strict of state regulations to drastically cut carbon emissions in line with prevailing wisdom about how to forestall climate disaster. The United States must end the honor system — and furthermore cease the massive subsidies that reward oil companies’ broken promises, amounting to public support without public control.

Because they are driven by profit alone, and because the central product that generates that profit destroys the environment, fossil fuel and natural gas companies can’t help but be untrustworthy on climate issues. It’s time we stopped trusting them.