By Carol Pierson Holding
In the past two weeks, there has been a lot of press about Chevron’s announcement that that it will sell all four of its US coal mines by the end of the year. The company says it is getting out of coal because the technology for converting coal to liquid won’t be available for another 10-15 years, and that even then technology might not be viable, and that the company will focus on “other operations.” In other words, it’s purely a business decision.
Chevron cites concern about its profits, which is a good thing, right? And its profits have been terrific, with 5-year returns over double those of its leading competitors. But what puzzled me is that I could not find a single story that even mentioned how Chevron’s coal mine sale supports its successful pro-environment platform.
After all, Chevron has committed to renewables and spent millions advertising this fact. And even though Chevron’s business is only 13% renewables now, the company bravely re-branded itself several years ago with the aspirational tag “The Power of Human Energy: Finding Newer, Cleaner Ways to Power the Earth.” And its CSR ratings are among the highest in its industry, according to CSRHub.
So, thinking the media had simply left out the environmental piece, I went to Chevron’s web site to find its official press release about its decision to exit coal. To my surprise, there was none. Nothing at all. Instead, I found two other remarkable tidbits. First, Chevron reported stunning profits for this quarter of $5.3 billion, an increase of 70% over last year’s Q4. The company credits higher prices for crude, which we knew. We all notice the higher prices at the pump. So how is it investing these profits and those it will make selling coal mines?
The second notable press release was about its $4 billion investment in another deep water drilling project in the Gulf of Mexico. The gist (which I gleaned from Oil and Gas Financial Journal, as this press release had been taken down since the first time I looked) is that Chevron’s unfortunately named Big Foot deep water drilling project, its sixth facility in the Gulf, will be located approximately 225 miles south of New Orleans, Louisiana.
Now I have to admit: I am truly a naif in the oil and gas extraction industry. But this seems a bit like a shell game to me, albeit a sophisticated one.
Rather than toot it’s own horn for getting out of the dirtiest of its businesses, coal, Chevron exits quietly, while in an equally soft voice, the company invests $4 billion in deep water drilling off the coast of New Orleans, site of a deep water oil spill that has been called the largest environmental disaster in US history. In the meantime, Chevron crows to the public not about its exit from coal but about its focus on renewables.
And this is one of the best of the big oil lot?
Carol Pierson Holding is a writer and an environmentalist; her articles on CSR can be found on her website.
Image courtesy of Flickr user Iguanasan.