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Religious Activists and the Immorality of Banning Fossil Fuels
Religious Activists and the Immorality of Banning Fossil Fuels
Mar 16, 2025 5:40 PM

Religious proxy shareholder activists are at it again. This past week, As You Sow in tandem with Arjuna Capital submitted a proxy resolution to ExxonMobil, demanding pany increase investor payouts. The reasoning behind the resolution is to starve pany’s research and development of future projects. Because … climate change:

In a first of its kind proposal, Shareholders Arjuna Capital/Baldwin Brothers Inc. and As You Sow seek increased dividends or share buybacks from Exxon Mobil given structural challenges facing the industry — historically high capital expenditures, decreasing profitability, and global climate change. This represents the first shareholder proposal asking pany to return capital to shareholders in light of climate change risk.

The new shareholder resolution calls on Exxon Mobil (XOM) to protect investor value by “increasing the amount authorized for capital distributions to shareholders through dividends or share buy backs,” rather than invest in high-cost, high-carbon oil projects.

Exxon Mobil has maintained that none of its carbon assets will be stranded, based on projections of unabated global energy demand and a belief that global governments will not take meaningful action to curb global warming. Despite pressure from shareholders, pany has failed to stress test the impact of governments reacting appropriately to limit climate disruption to agreed upon international targets.

These activists claim to possess supernatural powers of predicting market turns into the distant future even though the steep oil price declines of recent weeks seemed to fool almost all Wall Street energy analysts and government experts. Here’s more from AYS/Arjuna:

In addition to the likelihood of reduced demand, the cost of oil and gas exploration and development is dramatically increasing and Exxon Mobil is making extremely risky bets on new energy exploration that run counter to the assessments of leading market experts. According to Carbon Tracker Initiative (CTI), 39 percent of Exxon Mobil’s potential capital expenditures through 2025 requires an oil price of $95 per barrel to be economical, and 17 percent requires a price of $115 per barrel. By the end of 2025, CTI expects high cost projects to represent 35 percent of Exxon Mobil’s potential future production.

Got that? The shale oil boom is resulting in lower prices worldwide. The U.S. West Texas Intermediate crude oil benchmark price has dipped below $70 per barrel – a four year low — and Americans are enjoying the cheapest gasoline prices they’ve seen in a long time. Although the current oil glut indeed poses profitability issues for U.S. oil and natural panies, AYS and Arjuna try to have it both ways – “concern” that shareholders might get dinged during a period of high-productivity and therefore lower profitability, but as well petroleum assets might be “stranded” due to governments enforcing renewable mandates and raising carbon-dioxide emission caps.

For those who worship at the altar of environmental extremist Bill McKibben – such as the nuns, priests, religious and clergy affiliated with As You Sow – Pulitzer Prize winning journalist Daniel Yergin has a different take over at The Wall Street Journal. Yergin works for IHS, a global business information and analytics firm, and refutes the AYS/Arjuna claims:

Since 2008—when fear of “peak oil,” after which global output would supposedly decline, was the dominant motif—U.S. oil production has risen 80%, to nine million barrels daily. The U.S. increase alone is greater than the output of every OPEC country except Saudi Arabia.

The world has experienced sudden supply gushers before. In the early 1930s, a flood of oil from East Texas drove prices down to 10 cents a barrel—and desperate gas station owners offered chickens as premiums to bring in customers. In the late 1950s, the rapidly swelling flow of Mideast oil led to price cuts that triggered the formation of OPEC.

And in the first half of the 1980s, a surge in oil from the North Sea, Alaska’s North Slope and Mexico caused prices to plunge to $10 a barrel. That posed a much greater crisis for OPEC than today: Over those same years, global demand fell by more than two million barrels a day owing to a deep recession, greater conservation and the switch to coal from oil for electricity generation. This time world oil demand is still growing, but weakly.

For the past three years, oil prices hovered around $100 a barrel as disruptions in Libya, South Sudan and elsewhere, and sanctions on Iranian exports, eerily balanced out the production increases from the U.S. and Canada. But the slower global economic growth that became apparent a few months ago was panied by weaker demand for oil, just when Libya suddenly quadrupled output to almost a million barrels a day. The result: Prices weakened in September and then tumbled.

And this:

It is now clear that the new U.S. production is more resilient than anticipated. There has been a widespread view that at around $85 or $90 a barrel extracting “tight” oil from shale would no longer be economical. However, a new IHS analysis based on individual well data finds that 80% of new tight-oil production in 2015 would be economic between $50 and $69 a barrel. panies will continue to improve technology and drive down costs.

It’s doubtful this plenitude of petroleum will find itself stranded in the foreseeable future. According to the latest report from the Paris-based International Energy Agency (IEA), fossil fuels will continue to dominate the power generating sector, although its share of generation declines from 68 percent in 2012 to 55 percent in 2040. How close those numbers line up with actual usage we don’t know, decades out. But anyone who claims the moral high ground with fossil fuel divestment campaigns and shareholder schemes like those contrived by AYS/Arjuna are not just misguided but pushing policies that are frankly immoral. Doesn’t Bill McKibben and all those nuns and priests who were warning us about “peak oil” just a few short years ago care that, as IEA puts it, “more than 620 million people (two-thirds of the population) in sub-Saharan Africa are without access to electricity. Those who have access to electricity often face very high prices for a supply that is insufficient and unreliable.”

Although politicians and regulatory agencies attempt to tighten the screws on CO2 emissions and ozone, there exists nothing as cheap and plentiful as oil and natural gas for increasingly cheap and clean energy. This prompts the question: What at present is there to replace it? Renewable wind and solar energy are a long way away from meeting baseload energy requirements as Germany recently concluded:

“It’s clear that the [2020 CO2] target is no longer viable,” said the vice-chancellor according to information obtained by SPIEGEL, adding: “We cannot exit from coal power overnight.”

Experts have doubted for some time that German climate targets are being met – especially since Gabriel is defending vehemently coal-fired power generation. According to the Ministry of Environment, Germany would have to cut 62 to 100 million tonnes of CO2 every year in order to achieve its goals. Shutting down old coal power stations would only reduce CO2 emissions by 40 million tons.

Even Google has thrown in the towel on its alternative-energy crusade:

We came to the conclusion that even if Google and others had led the way toward a wholesale adoption of renewable energy, that switch would not have resulted in significant reductions of carbon dioxide emissions. Trying bat climate change exclusively with today’s renewable energy technologies simply won’t work; we need a fundamentally different approach.

The above quote was written by Ross Konigstein and David Fork, Stanford PhDs (respectively in aerospace engineering and applied physics). The two scientists were hired by Google ago to find a cheaper energy source than coal. Their project was terminated by Google after four years.

In the meantime, American for Prosperity President Tim Phillips wrote in Monday’s Wall Street Journal that the $7.3 billion (thus far) U.S. wind-energy subsidy boondoggle has been nothing more than a massive wealth redistribution program. Phillips noted:

Over the past seven years, the PTC has cost taxpayers $7.3 billion, and it is expected to pay out $2.4 billion more in 2015. Combined with other subsidies and programs, wind generators received $56.29 in government subsidies per megawatt-hour in 2010, according to a 2012 report from the Institute for Energy Research. pared with 64 cents in subsidies for natural gas and $3.14 for nuclear power.

The program operates as one of America’s least-known wealth-redistribution schemes, forcing taxpayers to pick up the tab for wind farms beyond their borders. In 2012 more than 30 states paid more in subsidies than wind farms in those states received in tax credits. Citizens in five states paid more than $100 million more in federal taxes than they received from the PTC: California ($196 million), New York ($163 million), Florida ($138 million), New Jersey ($126 million) and Ohio ($104 million). Eleven states paid into the PTC even though they have no qualifying wind production. The unlucky losers included Florida, Virginia and North Carolina.

Phillips concludes wind energy in the United States never will be self-sufficient, and will pick taxpayers’ pockets in perpetuity while providing little more than intermittent power.

And yet:

Natasha Lamb, Director of Equity Research and Shareholder Engagement at Arjuna Capital said, “This proposal is breaking new ground by asking Big Oil not to break ground on high-cost, high-carbon projects. Exxon Mobil should return capital to shareholders rather than gamble with investor resources. A fossil fuel volume play in the face of global climate change is simple folly. We should not be in a rush to find and burn all the carbon we can, regardless of cost and irreversible climate impact, but instead focus on value, figuring out how to do more with less.”

“Exxon has taken a public position that demand for oil will continue to grow, no matter warm the globe gets, no matter how harsh the impacts of that warming, and regardless of technology changes allowing for cheaper, cleaner renewable fuels,” said Danielle Fugere, President of As You Sow. “The recent U.S.-China accord on carbon emission reductions is just the latest indication that ExxonMobil’s view of the world does not square with reality. Our goal is to protect shareholders from the clear and inevitable changes to the global economy that mean ExxonMobil is likely to have substantial stranded carbon assets if it continues on its current path.”

Sigh. The unstated but obviously ultimate goal of AYS is to pull the plug on an all fossil fuels regardless whether it actually reduces humanity’s carbon footprint or not. These so-called religious shareholder advocates would do well to pick up Alex Epstein’s The Moral Case for Fossil Fuels, published just this week by Portfolio/Penguin. Randomly thumbing through its pages are glorious nuggets such as this: “Ultimately, the moral case for fossil fuels is not about fossil fuels; it’s the moral case for using cheap, plentiful, reliable energy to amplify our abilities to make the world a better place – a better place for human beings.”

I’m pretty certain he hit the nail on the head.

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