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21 May 2001

Why it is right to boycott Esso

It may seem unfair to act against a single company but, argues Andrew Warren, Exxon remains the most

By Andrew Warren

The sense of outrage that resonated around the world after President George W Bush’s decision to repudiate the Kyoto climate-change protocol has found a tangible expression. A selection of glitzy media celebrities and environmental groups, together with a former chairman of the Conservative Party, have declared a boycott on the products of a single American company. That company trades in the UK as Esso.

Why this particular company? Because those who have followed the tortuous negotiations that led from the Rio Earth Summit in 1992, via the signing of Kyoto in 1997, to the interminable conferences to obtain full ratification of the protocol, know precisely where the main stumbling block to progress lies. It is with Big Oil. And in that rarefied world, none comes bigger than Exxon Mobil, the parent company of Esso.

Last year’s profits were $17.7bn, by far the largest of any company anywhere. In Britain, more than 70 per cent of us live within two miles of one of its 1,500 petrol outlets.

While not the most climate-unfriendly fuel (that dubious honour lies with coal), oil is uniquely vulnerable to loss of sales from climate-change-reduction policies. After energy use in buildings (41 per cent), transport (31 per cent) is the second biggest cause of carbon dioxide emissions across Europe. And transport is oil.

Big Oil was the single biggest contributor to Bush’s presidential campaign: $25m poured into Republican coffers. The largest contribution came from Exxon.

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Exxon has long been a prominent member of the American Petroleum Institute, one of the main organisations working to discredit scientific findings on global warming and its causes. In the months before Kyoto was negotiated, senior Exxon executives lobbied hard in China to strengthen that country’s resistance to its inclusion in any treaty. Its chief executive, Lee Raymond, publicly argued in Beijing that the climate-change negotiations were part of a plot to halt the modernisation of China and other Asian countries. The argument was well received. Emerging countries such as China were excluded from the protocol’s initial phases requiring emission reductions. Bush has used that omission as one of his main justifications for not taking the protocol any further.

One of the earliest policy responses to climate change came from the European Commission. Nine years ago, it proposed a tax of $10 per barrel of oil, intended to reduce consumption. The revenues would be recycled to cut employment taxes, creating a “double dividend” of reduced pollution and more jobs. The macroeconomic model underscoring this tax proposal was undertaken by Professor Pantelis Capros of the Technical University of Athens. A few months after publication, Basil Ziminis, Exxon’s chief European lobbyist, approached Capros. Would he care to rerun his econometric model, incorporating certain other variables? If so, he would be mightily reimbursed for his troubles.

The new variables were carefully designed to support some completely different policy conclusions: specifically, that such energy taxes would be detrimental to Europe’s economy and jobs. Capros contacted his original paymasters at the European Commission, who promptly publicised this curious request. Ziminis immediately backed off, closed his wallet and went into retirement in Texas.

In the European Parliament, the MEP appointed as its rapporteur on the tax proposal was the Conservative group leader, Tom Spencer. He also happened to represent Surrey, where Exxon’s entire UK management is based. But if the company expected to find a sympathetic ear, it was swiftly disabused. Spencer, a robust Falstaffian figure, became convinced of the threats posed by climate change, and consequently the merits of the tax (regardless of the view of the then Tory government).

So much so that he took to beginning each speech with a call to stop giving hurricanes (the increasing numbers of which he attributed to climate change) women’s or men’s first names in alphabetical order. “Why don’t we name the truly guilty parties?” he asked. “Let’s call the storms Amoco, then BP, then Chevron, and then we can name my constituents at Exxon.”

Before he could file his final report to the parliament, Spencer’s career came to an abrupt halt. He was arrested passing through Gatwick airport carrying cocaine and pornography. Spencer duly left public life. And the $10-per-barrel carbon/energy tax is still a long way from realisation.

Spencer’s party colleague and former party chairman John Gummer was the first public figure after Bush’s Kyoto rejection to call for a specific boycott of Exxon. He differentiates between Big Oil and Dirty Oil. In the former category he places Shell and BP, both running powerful in-house schemes to reduce carbon emissions, as well as investing in renewable energy and energy management companies.

But Exxon? Such diversification is not for that company. It still queries the veracity of the climate-change science. It is not the only constituent member of Dirty Oil, but it is undoubtedly the biggest and most powerful. For its annual general meeting on 30 May, the Exxon board is recommending rejection of a modest resolution requiring a move away from fossil fuels. Those concerned by the threat of climate change have already adopted an alternative modest resolution: boycott Esso.

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