ExxonMobil has released its report into the financial risks of its fossil fuel assets. In March, activist shareholders forced the company to take a look at its exposure to the carbon bubble and its risk of stranded assets.
Its findings? There’s no risk because ExxonMobil believes there will be no meaningful action on climate change.
“We are confident that none of our hydrocarbon reserves are now or will become ’stranded,' ” the report reads. “We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves become stranded in the global pursuit of higher living standards and economic opportunity.”
ExxonMobil believes the world will require 35 per cent more energy in 2040 than in 2010. Therefore, the company will produce fossil fuels far into the future. In essence, the demand for energy will outweigh any serious effort at mitigating climate change. Governments won’t dare to reduce carbon emissions.
It’s not surprising. A company admitting to its shareholders that its own business model is fundamentally flawed is unlikely. But Exxon’s utter refusal to take this issue seriously is telling. Rather than deliver a frank analysis of its own risk, it offered the only thing it could. Business as usual will continue, nothing will change, everything’s fine. Of course this week’s IPCC impacts report makes it clear that that can not be allowed to happen. If Exxon is right and the governments of the world do nothing, Earth is in for a world of hurt.
Climate campaigners should take note. Oil companies have no interest in preparing for a low-carbon future. If left to their own devices, these multinational corporations will gladly torch the climate, unleashing devastation in every corner of the globe. Exxon has just acknowledged that it can not imagine a future without fossil fuels. It should then be blatantly obvious to people and their governments that these companies must be reigned in. They will need to completely write off a huge chunk of their assets if we are to prevent runaway climate change. When the time comes and governments decide to take action, our leaders must ignore the inevitable whining and threatening of this industry. Rather than prepare for a low-carbon future Big Oil is forging ahead without care. Nobody can say we didn’t warn them when the carbon bubble bursts.
