Exxon’s Dangerous Outlook

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ExxonMobil presented its latest Energy Outlook report recently, the 2013 Outlook for Energy: a view to 2040 (pdf).

The report is chock full of figures and graphs showing an inexorable rise in global energy demand and supply and the growing market for Exxon’s products.

As can be expected, the report shows that despite some recent efficiency gains, the world is on course to consume ever growing amounts of energy, a large proportion of which will likely be derived from fossil fuels. Exxon’s places global growth in energy demand at 35% between 2010 and 2040.

In this regard, the report is more or less in line with recent business as usual forecasts from the International Energy Agency (IEA) and the U.S. Department of Energy’s Energy Information Administration (EIA).

But the report differs greatly from the IEA’s report in some vital areas. The IEA is a public agency, funded by the tax dollars of developed countries including the United States, while Exxon is the world’s largest private oil and gas company, with a self-interested agenda behind every public communication it makes.

It’s perhaps no surprise then that the Exxon Outlook fails to mention that if energy demand were to rise 35% to 2040, and if 60% of energy demand in 2040 were to be met by oil and gas as Exxon predicts (the IEA has it at 50%), then the planet would be on an unstoppable collision course with a 4 degree (C) warmer world. While the IEA’s report was very clear about where current energy demand trends will lead it was also clear that this could be avoided if serious action is taken soon.

The fact that we are on course for a 4 degree world was recently highlighted by the World Bank, a relatively recent convert to the urgency of climate change action that still needs to match its actions with its words. On the release of a recent report called Turn Down the Heat, the Bank’s President Jim Yong Kim said:

A 4 degree warmer world can, and must be, avoided – we need to hold warming below 2 degrees, (…) lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today. Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.”

But while Exxon produced some figures for greenhouse gas emissions and reported that they may peak in the 2030s (which would be catastrophic, emissions need to peak before 2020) it offered no indication of whether it was concerned or indifferent to the consequences of these emissions. Of course the purpose of the Exxon Outlook is not to advocate for change that would benefit society but to bolster support for Exxon’s business plan.

The history of the public version of Exxon’s Energy Outlook, documented in Steve Coll’s excellent recent book on the company, Private Empire, shows how the public presentation of the Outlook has always served the company’s public relations and lobbying agenda.

The Outlook was an internal only document for many years but according to Coll, in 2004 Exxon’s then CEO Lee Raymond, together with his (still in place) vice president of public and government affairs Ken Cohen, envisaged a greater role for the “tsunami of color-coded pie charts, bar graphs and global maps, read out unemotionally by executives wearing dark suits.”

With global oil prices rising, George Bush’s White House was awash in anxiety over dependence on Middle East oil and Bush himself was too curious for Exxon’s liking on alternatives such as hydrogen fuel cells.  In April 2005, Raymond and his team presented the Outlook to a top Bush adviser at the White House and convinced him to set up a series of briefings with White House staff.

The aim of the Outlook, as it was presented then and is still presented now, is to dispel any notion that there might be a clean energy future lying ahead. Population rise, increasing wealth in emerging economies and the energy these would require can only be met by increasing supply of fossil fuels, according to the figures. Exxon does not dismiss renewable energy and efficiency out of hand but maintains that they will not challenge the continued dominance of fossil fuels, particularly oil and gas, in the time frame.

Back in 2005, the timeframe stretched to 2030. Today the timeframe stretches to 2040, but global energy demand is to grow 35% just as it was between 2005 and 2030, and the overall conclusions remain the same.

Following the success of the 2005 White House staff briefings Exxon began to present the Outlook regularly to governments, NGOs, and the media. Slides from the Outlook began to appear in presentations to investors.

One British NGO director, quoted in Coll’s book, noted the change in Lee Raymond’s presentation but not the substance in what he was saying. “I note that Raymond is no longer seeking to gainsay the science behind climate change. (…) Instead he simply predicts an endless rise in the demand for the fossil fuels his company sells, and maintains that there is nothing that can be done to alter that.”

Over the next few days you may frequently see the media, particularly the business media, repeat parrot-like the findings of the Exxon Energy Outlook discussing it as if it is a forecast of things to come that can be relied upon as a basis upon which to maintain investments in oil and gas.

You’re probably less likely to see coverage of another report published this week that documents the growing investments by Fortune 100 companies (Exxon aside), in renewable energy and efficiency technologies that are helping to reduce the price volatility that these companies face in their energy costs.

The Exxon Energy Outlook is no forecast. It is an outlook, Exxon’s outlook, and what it envisages is an energy future we cannot afford.

Also see: Exxon Hates Your Children. Satire with a serious message.