Exxon executive is murdered

Exxon executive is murdered


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Exxon executive Sidney Reso dies in a storage vault in New Jersey. Four days earlier, he was abducted from the driveway of his Morris Township, New Jersey, home. Reso was shot in the arm, bound and gagged, and then placed in a wooden box that was hidden in a virtually airless storage space. Despite his death, the kidnappers continued with their ransom plans.

The kidnappers’ notably complex ransom notes demanding $18.5 million in used $100 bills were sometimes signed, “Rainbow Warriors.” Detectives were able to get DNA samples from both the ransom notes and the pay phones at Exxon stations where the kidnappers made their calls, leading them to Arthur and Irene Seale. The couple was arrested on June 19, 1992, after a protracted chase involving more than 100 FBI agents.

Arthur Seale was a former police officer and Exxon security consultant who was fired in 1987. Apparently, choosing Reso as his victim was partially fueled by his hatred of Exxon. Seale tried to throw the FBI offtrack by pretending that the kidnapping was the work of environmental radicals. However, the Seales were mainly motivated by their desire to fund a lavish lifestyle. After running up a mountain of debt living in a couple of resort towns, they were forced to move in with Arthur’s parents.

Irene Seale was eventually persuaded to testify against her husband, and she led officers to Reso’s body, which had been dumped in a remote area of the southern New Jersey Pine Barrens. Since New Jersey law prevented a person from testifying against his or her spouse in court, a federal court, which permits spousal testimony, tried Arthur Seale instead. He was convicted and sentenced to 95 years in prison and fined $1.75 million. Irene Seale received a 20-year sentence.

In an interesting parallel that occurred later that year, Sol Wachtler, the chief judge of New York’s highest court, copied some of Seale’s tactics to terrorize his former lover, Joy Silverman. Investigators examining the letters that Wachtler sent anonymously to Silverman were so similar to those written by Seale that at first they thought Seale was somehow connected. In fact, it turned out that Wachtler was so fascinated by the Reso kidnapping that he purposefully mimicked the style of Seale’s ransom notes. In this bizarre case, Justice Wachtler was convicted of stalking Silverman and her teenage daughter and was sent to prison after resigning from his position.


Exxon Knew about Climate Change almost 40 years ago

Exxon was aware of climate change, as early as 1977, 11 years before it became a public issue, according to a recent investigation from InsideClimate News. This knowledge did not prevent the company (now ExxonMobil and the world&rsquos largest oil and gas company) from spending decades refusing to publicly acknowledge climate change and even promoting climate misinformation&mdashan approach many have likened to the lies spread by the tobacco industry regarding the health risks of smoking. Both industries were conscious that their products wouldn&rsquot stay profitable once the world understood the risks, so much so that they used the same consultants to develop strategies on how to communicate with the public.

Experts, however, aren&rsquot terribly surprised. &ldquoIt&rsquos never been remotely plausible that they did not understand the science,&rdquo says Naomi Oreskes, a history of science professor at Harvard University. But as it turns out, Exxon didn&rsquot just understand the science, the company actively engaged with it. In the 1970s and 1980s it employed top scientists to look into the issue and launched its own ambitious research program that empirically sampled carbon dioxide and built rigorous climate models. Exxon even spent more than $1 million on a tanker project that would tackle how much CO2 is absorbed by the oceans. It was one of the biggest scientific questions of the time, meaning that Exxon was truly conducting unprecedented research.

In their eight-month-long investigation, reporters at InsideClimate News interviewed former Exxon employees, scientists and federal officials and analyzed hundreds of pages of internal documents. They found that the company&rsquos knowledge of climate change dates back to July 1977, when its senior scientist James Black delivered a sobering message on the topic. &ldquoIn the first place, there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels," Black told Exxon&rsquos management committee. A year later he warned Exxon that doubling CO2 gases in the atmosphere would increase average global temperatures by two or three degrees&mdasha number that is consistent with the scientific consensus today. He continued to warn that &ldquopresent thinking holds that man has a time window of five to 10 years before the need for hard decisions regarding changes in energy strategies might become critical." In other words, Exxon needed to act.

But ExxonMobil disagrees that any of its early statements were so stark, let alone conclusive at all. &ldquoWe didn&rsquot reach those conclusions, nor did we try to bury it like they suggest,&rdquo ExxonMobil spokesperson Allan Jeffers tells Scientific American. &ldquoThe thing that shocks me the most is that we&rsquove been saying this for years, that we have been involved in climate research. These guys go down and pull some documents that we made available publicly in the archives and portray them as some kind of bombshell whistle-blower exposé because of the loaded language and the selective use of materials.&rdquo

One thing is certain: in June 1988, when NASA scientist James Hansen told a congressional hearing that the planet was already warming, Exxon remained publicly convinced that the science was still controversial. Furthermore, experts agree that Exxon became a leader in campaigns of confusion. By 1989 the company had helped create the Global Climate Coalition (disbanded in 2002) to question the scientific basis for concern about climate change. It also helped to prevent the U.S. from signing the international treaty on climate known as the Kyoto Protocol in 1998 to control greenhouse gases. Exxon&rsquos tactic not only worked on the U.S. but also stopped other countries, such as China and India, from signing the treaty. At that point, &ldquoa lot of things unraveled,&rdquo Oreskes says.

But experts are still piecing together Exxon&rsquos misconception puzzle. Last summer the Union of Concerned Scientists released a complementary investigation to the one by InsideClimate News, known as the Climate Deception Dossiers (pdf). &ldquoWe included a memo of a coalition of fossil-fuel companies where they pledge basically to launch a big communications effort to sow doubt,&rdquo says union president Kenneth Kimmel. &ldquoThere&rsquos even a quote in it that says something like &lsquoVictory will be achieved when the average person is uncertain about climate science.&rsquo So it&rsquos pretty stark.&rdquo

Since then, Exxon has spent more than $30 million on think tanks that promote climate denial, according to Greenpeace. Although experts will never be able to quantify the damage Exxon&rsquos misinformation has caused, &ldquoone thing for certain is we&rsquove lost a lot of ground,&rdquo Kimmell says. Half of the greenhouse gas emissions in our atmosphere were released after 1988. &ldquoI have to think if the fossil-fuel companies had been upfront about this and had been part of the solution instead of the problem, we would have made a lot of progress [today] instead of doubling our greenhouse gas emissions.&rdquo

Experts agree that the damage is huge, which is why they are likening Exxon&rsquos deception to the lies spread by the tobacco industry. &ldquoI think there are a lot of parallels,&rdquo Kimmell says. Both sowed doubt about the science for their own means, and both worked with the same consultants to help develop a communications strategy. He notes, however, that the two diverge in the type of harm done. Tobacco companies threatened human health, but the oil companies threatened the planet&rsquos health. &ldquoIt&rsquos a harm that is global in its reach,&rdquo Kimmel says.

To prove this, Bob Ward&mdashwho on behalf of the U.K.&rsquos Royal Academy sent a letter to Exxon in 2006 claiming its science was &ldquoinaccurate and misleading&rdquo&mdashthinks a thorough investigation is necessary. &ldquoBecause frankly the episode with tobacco was probably the most disgraceful episode one could ever imagine,&rdquo Ward says. Kimmell agrees. These reasons &ldquoreally highlight the responsibility that these companies have to come clean, acknowledge this, and work with everyone else to cut out emissions and pay for some of the cost we're going to bear as soon as possible,&rdquo Kimmell says.

It doesn&rsquot appear, however, that Kimmell will get his retribution. Jeffers claims the investigation&rsquos finds are &ldquojust patently untrue, misleading, and we reject them completely&rdquo&mdashwords that match Ward&rsquos claims against them nearly a decade ago.


Monroe J. Rathbone Dies at 76 Former Exxon. Chief Executive

Monroe Jackson Rathbone, retired board chairman and chief executive officer of the Exxon Corporation and one of the most important figures in the history of the oil industry, died yesterday at General Hospital in Baton Rouge, La. He was 76 years old.

Mr. Rathbone was a resident of Baton Rouge, where he began his 44‐year career with the company in 1921 as a chemical engineer. He returned there from Summit, N. J., even though he kept an office at Exxon's Rockefeller Center headquarters after his retirement in 1965 as head of what was then still the Standard Oil Company (New Jersey).

As a young plant manager in Baton Rouge, Mr. Rathbone became instrumental in the development of innovations of great importance to the industry. These included the fluid catalytic cracking process that revolutionized refining, making high octane aviation fuel and synthetic rubber, and manufacturing alcohol from petroleum.

An Industry Leader

His rise in the company's hierarchy was rapid, and when he reached the top he was generally regarded as the outstanding executive in the industry. In his 10 years of stewardship at Exxon, he was given credit for making it the most truly international of all corporations, moving it to search for new production areas and to push for new markets for diversified petroleum products around the world.

A broad ‐ shouldered man standing 6 feet 3 inches tall, Mr. Rathbone had the slightly battered look of a retired bover, and voiced his strong opinions with a trace of an accent from his native West Virginia. His middle name derived from his great uncle, General Thomas (Stonewall) Jackson, and caused him to be known as “Mr. Jack” from early on in his career.

He was responsible for reorganizing all of Jersey Standard's domestic operations into one integrated company, Humble Oil and Refining, now Exxon U.S.A. He also sat on the board of directors of other companies, such as American Telephone and Telegraph, Morgan Guaranty Trust, Prudential Insurance of America, Gulf States Utilities, Triangle Industries and Nuclear Systems, and he was a past director and past chairman of the American Petroleum Institute.

He was greatly interested in education, and warned at a conference at Columbia University in 1965 against “intellectual Hass production,” which in his view was turning out collegegraduates like widgets on an assembly line.

Mr. Rathbone headed the board of trustees of his alma mater, Lehigh University, where he earned his degree in 1921 after serving as a second lieutenant in the Army in World War L

Always having wanted to be “in oil” — his father was the manager of Jersey's refinery in Parkersburg, W. Va., his birthplace — Mr. Rathbone went to work in the drafting department. of the Standard Oil Company of Louisiana in Baton Rouge right after his graduation.

The company, a Jersey affiliate, made him plant manager in 1932, when he was only 32 years old. Four years later he was named president of Louisiana Standard.

Battled With Long

It was in those years that Mr. Rathbone got his first exposure to the politics of of as he locked horns with then Goy. Huey P. Long, a populist with no taste for the oil industry. Their confrontaticn over taxes, policy and employment endured until the Governor's death in 1935.

Louisiana Standard was merged with Esso Standard Oil in 1944, the year Mr. Rathbone came to New York as president of Esso Standard. He was elected to the board of the parent company, Jersey Standard in 1949, and became its president five years later.

While president, he also became chief executive officer, and he continued in that position when he assumed the chairmanship of the board in 1963.

Over the years, Mr. Rathbone got numerous awards and honorary degrees and was chairman of the Exxon Education Foundation, chairman of the National Fund for Medical Education and a trustee of St. Barnabas Hospital in Livingston, N.J.

He is survived by his wife, Eleanor a daughter, Mrs. William A. Nicholas, and a son, Dr. M. J. Rathbone Jr.


Exxon CEO is dealt a stinging setback at hands of activist

Exxon Mobil Corp. Chief Executive Darren Woods suffered one of the biggest setbacks of his career at the hands of a tiny activist investment firm established less than six months ago.

At least two of the activist’s nominees won seats on Exxon’s board Wednesday, despite the chief executive’s vocal opposition and an all-hands-on-deck battle by the oil giant to defeat the insurgents.

A third seat may yet fall to San Francisco activist Engine No. 1 when the final results from Exxon’s annual meeting are tallied. That would put Woods in the tricky position of leading a board that’s 25% under the control of outsiders. Last-minute efforts by Woods and his team to appease climate-conscious investors and rebuff Engine No. 1’s assault were to no avail.

“Darren Woods has come from a long line of CEOs that have been very straightforward: It’s our ball, it’s our bat and we’re going to do what we want,” said Mark Stoeckle, chief executive of Adams Express Co., which oversees $2.8 billion in assets. “When you’re the biggest and the baddest, you can get away with that. But you have to change with the times. The messaging has been terrible.”

The result is one of the biggest activist upsets in recent years and an embarrassment for Exxon. It’s also unprecedented in the rarefied world of Big Oil, and a sign that institutional investors are increasingly willing to force corporate America to tackle climate change. That Engine No. 1, with just a 0.02% stake and no history of activism in oil and gas, could notch even a partial victory against the Western world’s biggest crude oil producer shows that environmental concerns are resonating all the way to the top of the largest U.S. companies.

For Woods, who was listed as 56 years old in the company’s March proxy filing, the defeat is just the latest black mark since his elevation to CEO in 2017. Exxon underperformed peers for the first five years of his reign, and in 2020 the company’s shares cratered by 41% for the worst performance in 40 years. Under his leadership, the company also posted its first annual loss in decades and saw oil production slump to the lowest since the Mobil Corp. merger in 1999. Meanwhile, Exxon’s debt ballooned as it borrowed to pay for dividends and drilling amid shrinking cash flow.

Wednesday’s vote was also striking because of the force with which Exxon battled the activist, which also criticized the company’s financial performance. Exxon refused to meet with the nominees, and Woods told shareholders this month that voting for them would “derail our progress and jeopardize your dividend.” The company even went as far as to pledge, just 48 hours before the meeting, that it will add two new directors, including one with “climate experience.”

“This historic vote represents a tipping point for companies unprepared for the global energy transition,” the California State Teachers’ Retirement System, or CalSTRS, which had supported Engine No. 1, said in a statement after the meeting. “While the ExxonMobil board election is the first of a large U.S. company to focus on the global energy transition, it will not be the last.”

In other corners of the commodities sector, shareholders this year have already shown frustration with executives’ reluctance to embrace tough environmental goals. On the same day that Exxon investors met, management at Chevron Corp. was rebuked by its shareholders, who voted for a proposal to reduce emissions from the company’s customers. DuPont de Nemours Inc. recently suffered an 81% vote against management on plastic-pollution disclosures, and ConocoPhillips lost a contest on adopting more stringent emission targets.

Exxon Mobil shareholders may force change on the giant oil company, starting this week.

Also on Wednesday, Royal Dutch Shell was ordered by a Dutch court to slash its emissions harder and faster than planned, a ruling that may have consequences for the rest of the fossil fuel industry.

The Exxon meeting proved to be a nail-biting conclusion to a months-long proxy fight. Exxon halted proceedings at one point to allow more time for vote counting. Engine No. 1 accused the company of making a “last-ditch attempt to stave off much-needed board change.”

The successful Engine No. 1 nominees were Gregory Goff, former CEO of refiner Andeavor, and environmental scientist Kaisa Hietala. This month, Exxon described all four dissident nominees as “unqualified.” Eight Exxon nominees were elected and two board seats remain undecided one or both of them could potentially go to the activist.

The result shows a clear dissatisfaction with Woods’ strategy, despite the stock’s rally this year, up more than 40% thanks to surging oil prices. The stock rose more than 1% after the vote was disclosed.

Woods, who retained his board seat, should be able to continue improving Exxon’s financial performance as cash flows recover, securing the S&P 500’s third-largest dividend and leaving behind 2020’s record loss. But the bigger question concerns Exxon’s energy-transition strategy, considered by many shareholders to be well behind those of its European peers.

Exxon’s environmental record and unwillingness to embrace the pivot away from fossil fuels quickly enough was a key criticism in the proxy campaign. Engine No. 1 was scathing in its assessment of Exxon’s long-term financial performance, calling it “a decade of value destruction.”

It remains to be seen how Exxon pivots, if at all, but the message from shareholders is clear: The status quo cannot continue.


Exxon CEO Is Dealt Stinging Setback at Hands of New Activist

(Bloomberg) -- Exxon Mobil Corp. CEO Darren Woods was dealt a stunning defeat by shareholders when a tiny activist investment firm snagged at least two board seats and promised to push the crude driller to diversify beyond oil and fight climate change.

For Woods, who had aggressively opposed the insurgents, it was just the latest setback in a rocky 4 1/2-year tenure that has seen what was once the world’s most-valuable company shed more than $125 billion in market value.

The vote was unprecedented in the rarefied world of Big Oil and underscores how vulnerable the industry has suddenly become as governments around the globe demand an acceleration of the shift away from fossil fuels. It’s also a sign that institutional investors are increasingly willing to force corporations to actively participate in that transition.

Tiny activist investor Engine No. 1, with just a 0.02% stake and no history of activism in oil and natural gas, secured two seats on Exxon’s board in Wednesday’s vote. A third seat may yet fall into the firm’s hands when the final results are tallied. That would put Woods in the tricky position of leading a board that’s 25% under the control of outsiders. Last-minute efforts by Woods and his team to appease climate-conscious investors and rebuff Engine No. 1’s assault were to no avail.

“Darren Woods has come from a long line of CEOs that have been very straightforward: it’s our ball, it’s our bat and we’re going to do what we want,” said Mark Stoeckle, chief executive of Adams Express Co., which oversees $2.8 billion in assets. “When you’re the biggest and the baddest you can get away with that. But you have to change with the times. The messaging has been terrible.”

Click here to see Bloomberg Intelligence’s ESG data.

BlackRock Inc., the second largest holder of Exxon with a 6.6% stake, voted for three of the new directors nominated by Engine No. 1, according to a vote bulletin published Wednesday. The firm said it was “concerned about Exxon’s strategic direction” and that the oil giant could benefit from the addition of the new directors who would “bring the fresh perspectives” to the board.

But the investment giant also voted in favor of Frazier and Woods, according to the bulletin -- a move that rankled environmental groups who called for the firm to vote against them.

The result is one the biggest activist upsets in recent years and an embarrassment for Exxon. For Woods, who was listed as 56 years old in the company’s March proxy filing, the defeat is just the latest black mark since his elevation to CEO in 2017. Exxon has underperformed peers for years and in 2020 its shares cratered by 41% for the worst performance in 40 years. Under his leadership, the company also posted its first annual loss in decades and saw oil production slump to the lowest since the Mobil Corp. merger in 1999. Meanwhile, Exxon’s debt load ballooned as it borrowed to pay for dividends and drilling amid shrinking cash flow.

Wednesday’s vote was also striking because of the force with which Exxon battled the activist, which also criticized the company’s financial performance. Exxon refused to meet with the nominees and Woods told shareholders earlier this month that voting for them would “derail our progress and jeopardize your dividend.” The company even went as far as to pledge, just 48 hours before the meeting, that it will add two new directors, including one with “climate experience.”

READ: Exxon Activist Battle Turns Climate Angst Into Referendum on CEO

“This historic vote represents a tipping point for companies unprepared for the global energy transition,” California State Teachers’ Retirement System, also known CalSTRS, which had supported Engine No. 1, said in a statement after the meeting. “While the ExxonMobil board election is the first of a large U.S. company to focus on the global energy transition, it will not be the last.”

What Bloomberg Intelligence Says

The election of at least two Engine 1 nominees to Exxon Mobil’s board could drive changes to how the oil major allocates capital, permanently changing its investment proposition.

-- Fernando Valle and Brett Gibbs, BI analysts

Read the full report here.

In other corners of the commodities sector, shareholders this year have already shown frustration with executives’ reluctance to embrace tough environmental goals. On the same day that Exxon investors met, management at Chevron Corp. were rebuked by their shareholders who voted for a proposal to reduce emissions from the company’s customers. DuPont de Nemours Inc. recently suffered an 81% vote against management on plastic-pollution disclosures, while ConocoPhillips lost a contest on adopting more stringent emission targets.

READ: ‘Hidden Gem’ Oil, Gas Stocks Hold Their Own Amid Climate Uproar

Also on Wednesday, Royal Dutch Shell Plc was ordered by a Dutch court to slash its emissions harder and faster than planned, a ruling that may have consequences for the rest of the fossil fuel industry.

The Exxon meeting proved to be a nail-biting conclusion to a months-long proxy fight. Exxon halted proceedings at one point to allow more time for vote counting. San Francisco-based Engine No. 1 accused the company of making a “last-ditch attempt to stave off much-needed board change.”

The successful Engine No. 1 nominees were Gregory Goff, former CEO of refiner Andeavor, and environmental scientist Kaisa Hietala. Earlier this month, Exxon described all four dissident nominees as “unqualified.” Eight Exxon nominees were elected and two board seats remain undecided one or both of them could potentially go to the activist.

The result shows a clear dissatisfaction with Woods’ strategy, despite the stock’s rally this year, up by 43% due to surging oil prices.

Exxon gained 1% after Wednesday’s vote. With most of the shareholder demands focused on long-term strategy and none calling for an immediate breakup of the company, short-term gains are likely to be muted. It will take a decade or more for the oil giant to transition its sprawling global business, Stoeckle said.

Woods, who retained his board seat, should be able to continue improving Exxon’s financial performance as cash flows recover, securing the S&P 500’s third-largest dividend and leaving behind 2020’s record loss. But the bigger question concerns Exxon’s energy-transition strategy, considered by many shareholders to be well behind those of its European peers.

It remains to be seen how Exxon pivots, if at all, but the message from shareholders is clear: The status quo cannot continue.

Exxon’s environmental record and unwillingness to embrace the pivot away from fossil fuels quickly enough was a key criticism in the proxy campaign. Engine No. 1 was scathing in its assessment of Exxon’s long-term financial performance, calling it “a decade of value destruction.”


ExxonMobil to take biggest writedown in modern history

© Andrew Harrer/Bloomberg

ExxonMobil is about to incur the biggest writedown in its modern history as what was once an exemplar of American capitalist might shudders under the weight of debilitated energy markets.

ExxonMobil – already hobbled by cratering crude prices, a global supply glut and a pandemic-driven collapse in fuel sales – on Monday disclosed it will write down the value of North and South American natural gas fields by $17 billion to $20 billion. At the top end of that range, it would represent the industry’s steepest impairment since BP Plc’s 2010 Gulf of Mexico oil spill that killed 11 workers and fouled the sea for months. Meanwhile, capital spending will be drastically reduced through 2025.

The announcement comes in the waning days of a grueling year for Chief Executive Officer Darren Woods, who’s taken the heretofore anathema steps of firing employees, curtailing retirement benefits and canceling ambitious growth projects. The former refinery manager has been forced to recast his seven-year, $210 billion blueprint for rejuvenating the aging ExxonMobil portfolio of crude and gas holdings.

In addition to dropping vast swaths of gas assets from the development queue, Woods is capping capital spending at $25 billion a year through 2025, a $10 billion reduction from his pre-pandemic target.

This year has been particularly bruising for America’s most-iconic oil explorer. ExxonMobil lost money for three consecutive losses, an unprecedented streak, the shares dipped to an 18-year low and the company was ejected from the bosom of blue-chip stocks, the Dow Jones Industrial Average. Woods also plans to cut 15% of the company’s workforce by the end of next year.

From being the largest company in the S&P 500 Index as recently as 2012, Exxon now ranks just inside the top 50 as energy lost its luster and technology giants grew. Chevron Corp. now has a larger market valuation than Exxon.

Unlike its European peers, Exxon has so far chosen to stick with its $15 billion-a-year dividend and has increased borrowing in recent months to fund it and its other capital priorities. On an annualized basis, the dividend has been increased each year for almost four decades.

Optimism that vaccines will soon restore global economic growth buoyed crude prices in recent weeks but the impact of the contagion on Big Oil is likely to be longlasting. With European giants Royal Dutch Shell Plc and BP accelerating the pivot to renewables and Exxon locking in drastic spending cuts, capital flows into big, traditional developments are expected to shrink in coming years.

Cowen & Co. analyst Jason Gabelman detected a subtle shift in Exxon’s word choices that may herald a dramatic change in financial priorities. Whereas company executives touted Exxon’s “reliable and growing dividend” during the third-quarter earnings conference call, Monday’s statement only mentioned reliability, the analyst said in a note to clients.

“Continued emphasis on high-grading the asset base — through exploration, divestment and prioritization of advantaged development opportunities — will improve earnings power and cash generation, and rebuild balance sheet capacity,” Woods said in the statement.

ExxonMobil has been warning shareholders since October that its gas assets were at risk of significant impairment. Previously, the energy titan’s largest writedown was for about $3.4 billion in 2016, according to Bloomberg Intelligence.

Assets removed from Exxon’s development plans include so-called dry gas resources in Appalachia and the Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas, as well as western Canada and Argentina, the company said. It will attempt to sell “less strategic” assets.

The writedown stems from former CEO Rex Tillerson’s decision a decade ago to buy XTO Energy for $35 billion rather than spend years building an in-house shale business. At the time, the outlook for North American gas prices was bright because demand was rising faster than supply.

Instead, fracking was a victim of its own success, unleashing so much gas that it overwhelmed demand and the infrastructure needed to handle it, resulting in a prolonged stretch of depressed prices.

US rival Chevron recorded an impairment of more than $5 billion on Appalachian gas a year ago, and recently agreed to sell those fields to EQT Corp. for about $735 million.


30 Years of OPA90: Legislation to Prevent Another Exxon Valdez

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Before the Exxon Valdez caused the second-largest oil spill in US history, Riki Ott stood at the front of a community meeting in Valdez, Alaska, and predicted the future. “It’s not a matter of if, but when a big spill occurs,” warned the author and environmental activist. “And we are not prepared to respond.”

Just a few hours later, the Exxon Valdez pulled out of Alyeska Pipeline’s Valdez terminal with an overworked crew at the helm of a ship with navigation equipment that hadn’t worked in months. At 12:04 a.m. on March 24, 1989, the tanker struck Bligh Reef. The hull of the 300-meter-long ship ripped open. Oil began spilling into Prince William Sound. The response plan, designed to deal with such an accident, kicked into action—without the main cleanup vessel, which was stuck in dry dock.

Despite four days of clear skies and calm seas, the oil was not contained before stormy weather blew in and scattered it along more than 2,000 kilometers of coastline. By the time the spill was brought under control, the Exxon Valdez had dumped 260,000 barrels of crude. The oil killed hundreds of thousands of birds, mammals, and fish devastated the commercial fishing industry ruined tourism for years and caused long-lasting social impacts.

“It was a nightmare,” says Robert Archibald, a Homer, Alaska, resident and veteran mariner who worked on a tugboat that serviced Alaska’s oil industry at the time of the spill. He later helped with cleanup efforts. “We realized no one in the industry was anywhere close to being able to respond to a spill effectively,” Archibald says.

Blame for the spill and the mismanaged cleanup quickly focused on complacency by industry and government regulators, and the reaction was swift and wide-reaching. Within weeks, the state pushed the oil industry to adopt a stricter regime of safety protocols, environmental regulations, and oversight. A little more than a year later, the state legislature passed the new rules into law.

Then, on August 18, 1990, US President George H. W. Bush signed into law the Oil Pollution Act of 1990 (OPA90). The massive piece of legislation rewrote the rules for the entire oil and gas industry nationwide, and backed up the Alaska state legislation.

On the milestone of OPA90’s 30th anniversary, many in the oil and shipping industries, as well as in the environmental movement, still consider the act the global standard for oil spill prevention and response.

“I do believe it is the most effective regulation of its kind,” says Cynthia Hudson, the CEO of HudsonAnalytix, a maritime safety consulting firm.

“It held the feet to the fire of government and industry to do better,” says Rick Steiner, an environmental consultant who works on oil spill prevention.

The most important piece of OPA90, says Steiner, was the creation of regional citizens’ advisory councils (RCACs).

The councils provide a counterbalance to industry and government, explains Brooke Taylor, director of communications for the Prince William Sound Regional Citizens’ Advisory Council (PWSRCAC). Industry weighs the environment against profits, and politicians and government regulators can be swayed by oil and gas interests. But the councils, made up of local residents representing stakeholders such as local communities, Indigenous people, and fishing and tourism industries, have different priorities.

“It’s important that the people with the most to lose from an oil spill have a say in the industry that puts their livelihoods and communities at risk,” Taylor says.

Steiner had pushed Alaska to adopt a citizens’ advisory council in 1986 after seeing the setup in action in Scotland, but the oil industry rejected the idea. After the Exxon Valdez spill, however, state and federal legislators mandated the creation of two RCACs—one to manage the tanker route through Prince William Sound, and another for Cook Inlet, where dozens of oil platforms dot the water.

RCACs don’t have the power to change laws or enforce regulations. They’re composed of advisors who seek expert opinions and then communicate with government and the public, telling them what they’d like to see. But it’s enough to get results. The RCACs pushed the industry to adopt double-hulled tankers, develop better oil cleanup technology, enforce regular training and practice exercises, and beef up tug and escort systems, among other steps. Many of these rules have become global best practices.

“The councils have worked better than I ever thought they could,” says Steiner. “I sleep better at night knowing they’re watching what industry and government are doing.”

Citizens’ councils also help build trust, says Patience Faulkner, an Indigenous elder from Eyak, Alaska, and board member of the PWSRCAC. In 1989, she worked as a paralegal, processing claims from fishermen and others impacted by the Exxon Valdez spill. “People were scared,” she says. “They saw the failures and didn’t believe the promises from industry and government.”

Despite growing interest in other jurisdictions to create their own citizens’ councils, members of the two Alaska RCACs are starting to worry that 30 years of work is under threat.

Over the past four years, the Trump administration has rolled back dozens of regulations related to safety and oversight of offshore oil drilling and shipping, and has promised to change many more. Then, in March 2020, the Alaska Department of Environmental Conservation (ADEC) started reviewing state legislation after the oil and gas industry complained it had become “overly burdensome.”

Jason Brune, the commissioner of the ADEC, says the review is nothing to be afraid of. The regulations are hard to read and out of date, he says, referencing fax machines and snail mail. “The focus is on removing red tape and processes that do not add value to preventing and responding to the next spill,” he says. “It is not a rollback of environmental precautions.”

But that is little comfort for those who know how much influence petroleum interests have in a state where more than 70 percent of state revenue comes from the oil and gas sector.

“Alaska is a banana republic,” says Bob Shavelson, the executive director of Cook Inletkeeper, an environmental organization. Shavelson says he was kicked off the Cook Inlet RCAC after demanding the oil industry move some storage tanks. He’s now on the board of the PWSRCAC. But with low oil prices, declining oil production (now at a quarter of its 1988 peak), and the state running a US $1.3-billion deficit (before COVID-19), Shavelson worries what else might get tossed out along with the fax machine.

For Taylor, the recent moves give her a feeling of déjà vu. The Exxon Valdez was the last major Alaska oil spill, and many of the people who experienced it have moved or died. Despite efforts by the advisory councils to educate younger generations and newcomers about the impacts of the spill, it’s not the same as living through it. And now, with more than 240 tankers moving through Prince William Sound every year, she worries industry and government are pushing to relax regulations.

“It feels like in the last few years we’ve come full circle,” she says. “Complacency is creeping back in. We might be getting towards the ‘someday’ the advisory council and OPA90 were created to prevent.”


Exxon activist captures board seats in historic victory for climate change advocates

11:08 AM on May 26, 2021 CDT

A first-time activist investor with a tiny stake in Irving-based Exxon Mobil Corp. scored a historic win in its proxy fight with the oil giant, signaling the growing importance of climate change to investors.

Engine No. 1 won at least two board seats at Wednesday’s annual shareholders meeting, according to a preliminary tally. The little-known activist firm vaulted into the spotlight in December when it began agitating for change at Exxon, including a diversification of its business, the alignment of executive pay with shareholder interests, and a better plan to fight global warming.

The result is one of the biggest activist upsets in recent years and an embarrassment for Exxon. It’s also unprecedented in the rarefied world of Big Oil, and a sign that institutional investors are increasingly willing to force corporate America to tackle climate change.

As shareholder votes were being tallied inside company headquarters, Exxon also was challenged outside by workers locked out from an Exxon refinery in Beaumont. Two dozen of the refinery’s 650 displaced workers protested along Las Colinas Boulevard, seeking a return to work and new contract talks.

But the reverberations from Engine No. 1′s successful challenge outweighed everything Wednesday. With just a 0.02% stake and no history of activism in oil and gas, notching even a partial victory against the Western world’s biggest crude producer shows that environmental concerns are resonating all the way to the top of the largest U.S. companies.

The vote is also striking because of the force with which Exxon battled the activist, which also criticized the company for its lackluster financial performance. Exxon refused to meet with the nominees, and Chief Executive Officer Darren Woods told shareholders earlier this month that voting for them would “derail our progress and jeopardize your dividend.”

The company even went as far as to pledge, just 48 hours before the meeting, that it will add two new directors, including one with “climate experience.”

“This historic vote represents a tipping point for companies unprepared for the global energy transition,” CalSTRS, which had supported Engine No. 1, said in a statement after the meeting. “While the ExxonMobil board election is the first of a large U.S. company to focus on the global energy transition, it will not be the last.”

In other corners of the commodities sector, shareholders this year have already shown frustration with executives’ reluctance to embrace tough environmental goals. On the same day that Exxon investors met, management at Chevron Corp. was rebuked by their shareholders who voted for a proposal to reduce emissions from the company’s customers. DuPont de Nemours Inc. recently suffered an 81% vote against management on plastic-pollution disclosures, while ConocoPhillips lost a contest on adopting more stringent emission targets.

Also on Wednesday, Royal Dutch Shell Plc was ordered by a Dutch court to slash its emissions harder and faster than planned, a ruling that may have consequences for the rest of the fossil fuel industry.

The Exxon meeting proved to be a nail-biting conclusion to a monthslong proxy fight. Exxon halted proceedings at one point to allow more time for vote counting. San Francisco-based Engine No. 1 accused the company of making a “last-ditch attempt to stave off much-needed board change.”

Bruce Bullock, director of Southern Methodist University’s Maguire Energy Institute, said the vote reinforces what lies ahead for Exxon.

“ExxonMobil is a great company, but these results show the challenges the company faces in the current environment: transition to a lower-carbon economy, financially perform for your shareholders, and manage the many public expectations regarding the environment and sustainability,” he said in an email. “This transition is a daunting challenge with significant economic, social and other consequences. ExxonMobil has an opportunity to move forward now without distraction as part of the solution.”

The successful Engine No. 1 nominees were Gregory Goff, former CEO of refiner Andeavor, and environmental scientist Kaisa Hietala. Earlier this month, Exxon described all four dissident nominees as “unqualified.” Eight Exxon nominees were elected and two board seats remain undecided one or both of them could potentially go to the activist.

The result shows a clear dissatisfaction with Woods’ strategy, despite the stock’s rally this year, up more than 40% due to surging oil prices.

Woods, who retained his board seat, should be able to continue improving Exxon’s financial performance as cash flows recover, securing the S&P 500′s third-largest dividend and leaving behind 2020′s record loss, the first in four decades. But the bigger question concerns Exxon’s energy transition strategy, considered by many shareholders to be well behind its European peers.

Exxon’s environmental record and unwillingness to embrace the transition to cleaner energy quickly enough was a key criticism in the 6-month-old proxy campaign. Engine No. 1 was scathing in its assessment of Exxon’s long-term financial performance, calling it “a decade of value destruction.”

Rather than pivot toward low-carbon fuels and selling power like some of its rivals, Exxon is betting heavily on carbon capture and sequestration, a technology that it says needs substantial government support to be viable.

Engine No. 1 said Exxon’s marquee CCS hub in Houston “lacks any real substance” and generated nothing more than an “advertising blitz.” The fund also said Exxon’s climate targets were “distorting its long-term emissions trajectory” and its claim of being aligned with the Paris Agreement “fails the basic test of logic.”

It remains to be seen how Exxon pivots, if at all, but the message from shareholders is clear: The status quo cannot continue.

Kevin Crowley and Scott Deveau, Bloomberg

Dallas Morning News staff writer Grace Lieberman contributed to this story.


EXXON, MOBIL AGREE TO COMBINE

Exxon Corp. and Mobil Corp. inked an $81 billion deal today to create the world's largest oil company.

Executives maintained that the huge size of their venture -- secretly negotiated over the past five months under the code name "Highway" -- would ensure success in an era of low oil prices and produce savings that would benefit employees and consumers. But consumer groups complained that the birth of another corporate behemoth means less competition.

The new company, to be named Exxon Mobil Corp., will save $2.8 billion in expenses over the next three years, shed at least 9,000 jobs, and turn Mobil's corporate headquarters in Fairfax into the refinery and marketing arm of a corporate empire that will stretch across about 150 countries, the companies said.

Federal and overseas regulators, who must approve the merger, may force the sale of service stations and other assets, but the company intends to keep selling under both the Exxon and Mobil brand names.

Mobil is the nation's second-largest oil company, exceeded only by Exxon, but Mobil executives found the competitive environment increasingly difficult. "This does not mean we cannot survive on our own," said Mobil chief executive Lucio A. Noto. "We tend to do smart things when times are tough. And times are tough right now."

Exxon is effectively taking over Mobil. Exxon's chief executive, Lee R. Raymond, will head the new entity while Noto, a 36-year Mobil veteran, will become vice chairman. Many senior Mobil executives will relocate to Irving, Tex., Exxon's headquarters. About 2,000 of Mobil's 42,700 employees are based in the Washington area.

The deal -- the largest corporate merger ever -- had its genesis on a sweltering June day when Raymond called Noto and invited him to dinner, according to people familiar with the deal.

Both companies, like the rest of the industry, were facing drops in profits as they were confronted with a steep plunge in the price of oil, which recently fell to prices not seen since the Great Depression on an inflation-adjusted basis. Noto had cut a deal combining Mobil's oil and marketing operations in Europe with British Petroleum's in 1997, and Raymond was interested in a similar alliance in the United States.

But Noto, according to people close to the talks, felt that another alliance was not enough to thrive. "The easy things are behind us," he said today. "The easy oil, the easy cost savings, they've been done."

Indeed, even after steep job cuts and other cost-cutting measures, Exxon eked out only $8.46 billion in profit last year on revenue of $137.24 billion, a return of less than 6 percent.

Raymond noted in an interview that in addition to high costs and slipping oil prices, new competition has radically changed the industry over the past 10 to 15 years, making the merger critical. International oil companies, once only involved in exploration and production, have moved into the refining end. And competition also has mushroomed on the retail end. Petroleos de Venezuela, parent of Citgo, has the largest number of outlets in the United States.

"The biggest surprise," Raymond said in the interview, "was when we really started to look at Mobil's landscape of investments, how well they fit." The new company, for instance, will have a strong position in natural gas, a fuel that is expected to become more important in oil companies' futures because it contributes less to global warming than oil does.

He added: "I've never been in favor of bigness for bigness's sake alone."

The deal was officially signed at 8:45 this morning at the office of investment banking house J.P. Morgan & Co., the chief adviser to Exxon. "The driving force behind this merger is long-term opportunities," said Rod Peacock, a J.P. Morgan investment banker who headed the team advising Exxon. "It is a capital-intensive industry."

Raymond said he expects to close the deal by the middle of 1999, pending approval by federal regulators. But several special-interest groups vowed to try to block the process, claiming it would concentrate too much power and pose an environmental threat.

"Consumers are eventually going to pay the price for this since it induces non-competitive behavior," said Wenona Hauter, director of Public Citizen's Critical Mass Energy Project. Fred Krupp, executive director of the Environmental Defense Fund, noted that Exxon and Mobil have been key foes of efforts to cut greenhouse emissions, opposing climate-change protocol signed by more than 50 nations and supported by Shell, British Petroleum and other oil giants. "The newly created company," he said, "will have wide-ranging environmental impacts."

Exxon shares fell $3.37 1/2, to $71.62 1/2, and Mobil shares dropped $2.25, to $83.75, today, partly because of concern that regulatory barriers could delay the deal and because crude oil prices are so low. Crude oil prices on the New York Mercantile Exchange fell 9 cents, to $11.13.

Based on the closing price for Exxon stock Monday, before the deal was announced, Exxon will pay about $99 a share for Mobil shares -- each Mobil share will receive 1.32015 Exxon shares -- an increase of more than 30 percent since before the talks were disclosed last week. At that price, Exxon will pay about $77 billion in stock for Mobil and assume about $4 billion in long-term debt, giving the deal a total value of $81 billion.

The final price will be based on the value of Exxon's stock when the deal closes next year. Exxon shareholders will own about 70 percent of the company Mobil shareholders will own the rest. At Mobil's annual shareholder meeting in May, executives said their goal in 2001 was to hit $100 a share.

The merger documents stipulate that if the deal falls apart for certain reasons, various parties in the transaction could share up to $1.5 billion in so-called termination fees.

Noto said in an interview that on nine out of 10 issues, the companies are aligned. Though many analysts and oil industry experts said the Exxon and Mobil cultures are like oil and water, Raymond said their cultures are similar, particularly their shared love of intense and constant analysis. "We will analyze the world until it's flat," he said.

At the White House, officials offered a cautious reaction. While noting that the deal must go through the normal "regulatory process," White House Press Secretary Joe Lockhart said President Clinton generally looks favorably on mergers. "He believes that mergers that make us more globally competitive have a positive role to play as long as there is protection for consumers and it promotes economic growth," Lockhart said.

J. Robinson West, chairman of Petroleum Finance Co. in Washington, said all the major oil companies are faced with the difficult and costly task of replacing oil and gas fields as they wind down production. The per-barrel cost of finding oil and gas reserves has gone down because of technological developments, but because the oil fields are so large it takes huge amounts of money to develop them.

"It's really about the ability to create crown jewels," he said. "It's more than just cost cutting."

Combined, the companies will have 48,000 gas stations, many of them overlapping. John H. Lichtblau of the Petroleum Industry Research Foundation in New York is among many analysts who expect some to be shut down and even dispose of some refinery assets. Executives said the combined company will control about 13.5 percent of the retail gas market in this country.

Many details are still to be resolved, including Mobil's noteworthy role in making charitable contributions to the arts. When Raymond's wife asked him whether Exxon would continue Mobil's support of "Masterpiece Theatre" on PBS, Raymond was stumped. "Darned if I know," he said. Staff writer Peter Baker contributed to this report from Washington. The Giants Dominate


Latest Updates

Mr. de Margerie spoke on Monday to a business alliance group at a home of the Russian prime minister, Dmitri A. Medvedev.

“We are against sanctions,” Mr. de Margerie told the group, according to a transcript. “You have heard it. And I have not made myself very popular in my own country, as I am often accused of promoting our selfish interest.”

The accident — in which officials contend that the snowplow driver, who survived, was drunk and the control tower staff erred — was still under investigation.

Mr. de Margerie helped Total establish itself in places like Qatar as a company that could provide Western capital and technology but that was less tied to the interests of the United States and Britain than were rivals like Exxon Mobil and BP.

“Mr. de Margerie is one of the most central and characteristic figures in the industry, and in our view, his loss will be deeply felt at Total,” Peter Hutton, an analyst at RBC Capital Markets in London, wrote in an email. “He has been a stronger driver of strategy, execution and culture of the company than most C.E.O.s, and while there is a strong management team, this will lead to a sense of void at the center for some time.”

Mr. de Margerie rose from positions in the finance and exploration divisions and was a close associate of Thierry Desmarest, who built Total into a giant through mergers culminating with the takeover of Elf Aquitaine in 2000.

After becoming chief executive, Mr. de Margerie helped consolidate the merger and broadened Total’s base, expanding into Russia and the oil sands in Canada. He was also on good terms with oil figures in Saudi Arabia and recently scored a coup by building a large refinery in the country, the leading producer among members of the Organization of the Petroleum Exporting Countries.

He helped make Total one of the largest players in British and Norwegian waters. Recently, he made a small investment in British shale, possibly with the intention of provoking the French government, which thus far has prevented oil companies from exploring France’s own potentially rich deposits of shale oil and gas.

France, like other big European countries with strong business ties to Russia, was initially reluctant to press for sanctions against Moscow after the Ukraine tensions first flared this year. Mr. de Margerie spoke loudly and publicly against sanctions.

President Vladimir V. Putin sent a message to President François Hollande of France, saying Russia had “lost a true friend of our country.”


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