Elizabeth Douglass writes about energy for InsideClimate News. She worked for more than two decades as a business writer at daily newspapers, including a ten-year stint at the Los Angeles Times, where she spent the last half of her tenure covering energy. Her stories followed developments in the oil market, alternative fuels, and renewable energy, and exposed long-running performance problems at California's San Onofre nuclear power plant. She also chronicled how a power company falsified data to win customer-funded performance bonuses and how oil refiners and others in California created one of the nation’s most profitable fuel markets.
While covering telecommunications, she was the first to report financial sleight-of-hand at fiber network company Global Crossing, and uncovered Pacific Bell's boiler room-style sale of add-on features. At the San Diego Union-Tribune, she co-wrote an investigative series on government contractor Science Applications International Corp. that was a finalist for the 1996 Gerald Loeb Award for Distinguished Business and Financial Journalism.
She holds bachelor's and master's degrees from Northwestern University's Medill School of Journalism.
You can reach her by email at firstname.lastname@example.org
Government officials last week blocked a groundbreaking shareholder proposal on climate change from going to a vote at ExxonMobil. The move has confounded proponents, because the decision came just five days after the same agency cleared a similar resolution for Chevron's shareholder ballot.
"I'm completely baffled, frankly," said Natasha Lamb, director of equity research and shareholder engagement at wealth manager Arjuna Capital, lead sponsor of the ExxonMobil resolution. "The proposals are virtually identical."
The Chevron and Exxon rulings came from two different attorney-advisers at the Securities and Exchange Commission. The agency provides guidance to public companies that seek to exclude shareholder resolutions from the annual ballots distributed each year to vote on board directors, among other things.
Both of the resolutions at issue cite the threat from climate change as a reason to rein in spending on risky exploration projects in ultra-deep water, the Arctic and Canada's oil sands. They argue that those projects at Exxon and Chevron are chasing reserves that might become unsellable—or stranded—in a carbon-constrained world and in low-oil-price scenarios. The resolutions say the prudent course is for the companies to return that cash to shareholders instead, via dividends (Chevron) or a combination of dividends and share buybacks (Exxon).
U.S. oil and energy companies are facing a barrage of climate-related shareholder proposals this year, many of them demanding action or disclosures on low-carbon strategies, political spending and lobbying, greenhouse gas emissions, and climate-change risks.
Other resolutions address hot-button energy issues such as the dangers of transporting crude oil in mile-long trains, concerns over hydraulic fracturing, and returning money to shareholders instead of spending it on expensive new oil projects.
The flood of environmental and social-issues resolutions is part of a trend. Over the past five years, more than 180 of those kinds of shareholder resolutions have gone to a vote at energy companies—far more than for any other industry, according to Heidi Welsh, executive director of the Sustainable Investments Institute. At corporate annual meetings, shareholders can propose advisory resolutions calling on management to adopt or change a wide range of policies.
Without management support, almost all of these resolutions are soundly voted down, but proposals that gather more than a few percentage points of support often get management's attention. The recent rush of energy company resolutions has won more than 25 percent of shareholder votes on average, an unusually high level of backing, Welsh said. She is co-author of the newly released 2015 Proxy Preview, a yearly report that includes tallies and analysis of a wide range of socially responsible shareholder proposals.
More than three and a half years after an ExxonMobil pipeline spilled 63,000 gallons of oil into the Yellowstone River, the world's second-most-valuable company is still fighting regulators over being assessed a $1 million fine.
Exxon last month attacked the legal underpinnings of the government's case, which stems from the July 2011 rupture of the Silvertip Pipeline near Laurel, Mont. The oil giant argued that it complied with federal regulations and that pipeline regulators overstepped their authority in interpreting the legal requirements. It also said that all but one of the violations should be dropped and that the government should, at a minimum, "significantly reduce" the penalties.
Alexis Bonogofsky, whose family farm was inundated with oil from the spill, thinks the penalty is already too low.
"As an impacted landowner, it's upsetting to me that these fines are so tiny for someone like Exxon," said Bonogofsky, who is also tribal lands manager for the National Wildlife Federation in Billings, Mont. Exxon, which is second only to Apple Inc. in market value, took in $32 billion in 2014, a sum equal to $88 million per day.
So far, 2015 has not been good to the oil industry. In just the last two weeks, the bad news included two fiery oil railcar accidents, a refinery explosion, a scandal involving an industry-funded climate skeptic, a high-profile setback for an oil-by-rail project, a big retrenchment in Canada’s oil sands, and the president's veto of the Keystone XL oil import pipeline.
And that’s not all. Those events have come on top of industry-wide ripple effects from the recent plunge in crude prices. In the last two months, a string of oil companies announced disappointing earnings, workforce layoffs and sharp spending cuts. On Feb. 1, union leaders began strikes at many U.S. refineries after contract talks stalled.
"It's a mess...it's like a perfect storm," said Fadel Gheit, senior oil analyst at Oppenheimer & Co. He expects even worse earnings and layoff news ahead if oil prices stay in its current range of around $50 per barrel. On Jan. 28, the price of U.S. benchmark crude closed at a low of $45.23 a barrel, down more than 43 percent since the end of October.
The investigation into last month's oil pipeline spill in the Yellowstone River will be stalled until at least next fall because the most critical piece of evidence—the failed segment of pipe—can't be safely retrieved from the river until after snow-melt flooding is over, according to the pipeline's owner.
The 193-mile Poplar Pipeline, meanwhile, could be repaired and re-opened as soon as March 31, according to Bill Salvin, spokesman for Bridger Pipeline LLC, which owns the ruptured oil line.
The company is preparing to install a replacement pipe segment that would cross the Yellowstone deeper below the riverbed, though it wasn’t immediately clear what the depth would be. The Poplar was eight feet under the river in late 2011, but at the time of the spill, river forces had eroded away all of that cover in places.
The Poplar breach has renewed concerns about the safety of oil pipelines that cross rivers and other bodies of water in more than 18,000 places nationwide. Many of them are buried just a few feet below the water—and it's increasingly clear that pipelines should be installed much deeper.
The other day, Leslie Samuelrich got a call from a financial adviser looking for investments that matched his clients' wishes. "I have two sisters who came in that inherited money from their dad," the adviser told her. "And they both absolutely do not want any of their money in fracking companies."
Other callers just say "I want to invest fossil fuel free," said Samuelrich, president of Green Century Capital Management, a 20-year-old company with two diversified mutual funds that exclude fossil fuel companies. "Those are the words they're using, so the divestment movement has resonated with people."
The increased business for Samuelrich and others offering fossil-free investments is a secondary benefit of the fast-growing divestment movement that has members hanging giant banners and staging protests, street theater, sit-ins and other actions as part of the first Global Divestment Day on Friday.
Hundreds of divestment campaigns are underway around the world, with most of them targeting big-money investors such as university endowments and pension funds. Some are targeting banks and governments that support harmful fossil fuel projects. Today, they are all trying to make themselves heard, from Alaska to Florida, and in Toronto, Sydney, Australia and many other major cities.
Their message is this: Climate change is an urgent and moral matter. Having investments in oil, natural gas and coal companies is a de facto endorsement of the companies' push for more supplies and their efforts to derail efforts to tackle climate change. The groups want investors to stop adding fossil fuel stocks and bonds to their portfolios, and to sell off existing fossil fuel holdings over a five-year period.
Such highly publicized campaigns may be aimed at mega-money managers, but combined with other climate change initiatives, they have helped convince a growing wave of smaller players and individuals to rethink their investments too.
The fast-growing fossil fuel divestment movement is marshalling forces for this week's Global Divestment Day—an event organizers hope will strengthen the crusade's reach around the world and prove that it's "a force to be reckoned with."
Fossil Free, which has sister groups in Canada, Europe, Australia and New Zealand, said divestment day will feature a day-long series of actions on Feb. 13 in the U.S. (which will be Feb. 14 in some regions). So far, the schedule includes 326 events spread across six continents and 48 countries, including flash-mobs, street theater, elaborate props, sit-ins, vigils, dancing, a huge parade of bicycles, social media blitzes and more.
"There are going to be folks in a multitude of countries demanding action on the climate in the form of divestment," said Jay Carmona, a California-based community divestment campaign manager with 350.org, a nonprofit group that sponsors the Fossil Free divestment campaign as well as other climate-related initiatives.
"We want to send one clear message, that now is the time to end the age of fossil fuels," Carmona said.
Bridger Pipeline LLC was so sure its Poplar oil line was safely buried below the Yellowstone River that it planned to wait five years to recheck it. But last month, 3.5 years later, the Poplar wasn't eight feet under the river anymore. It was substantially exposed on the river bottom—and leaking more than 30,000 gallons of oil upstream from Glendive, Montana.
An ExxonMobil pipeline wasn't buried deeply enough for the Yellowstone River, either. High floodwaters in 2011 uncovered the Silvertip pipe, leaving it defenseless against the fast-moving current and traveling debris. It broke apart in July, and sent 63,000 gallons of oil into the river near Laurel, Montana.
Both companies underestimated the river's power and its penchant for scouring away the earth that's covering and protecting their pipelines. That miscalculation led to the Exxon Silvertip spill and it's likely to be declared a significant factor, at a minimum, in the Poplar spill.
Such misjudgments have potentially troubling implications nationwide, since pipelines carrying crude oil and petroleum products pass beneath rivers and other bodies of water in more than 18,000 places across America. Many of them are buried only a few feet below the water.
"There were a lot of people who wanted to think that the last pipeline spill in the Yellowstone River in 2011 was a freak accident that would never happen again. After this most recent spill, no one believes that anymore," said Scott Bosse, Northern Rockies director for American Rivers. "The truth is, there are probably hundreds of pipelines across the country that are at considerable risk of rupturing under our rivers."