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Oil Companies and Greenwashing

Gina-Marie Cheeseman
| Monday May 5th, 2008 | 2 Comments

company-oil.gifThe world’s major oil companies make big claims about the environment these days. From having sound environmental policies in place to investing in alternative fuel, the companies that provide the ‚ÄòTexas tea’ want us to believe they no longer wreak havoc on the environment.
The advertisement for the British oil company BP says its initials now stand for Beyond Petroleum instead of British Petroleum. “In response to increasing demand for energy with a lower-carbon footprint, we have made a major commitment to develop low-carbon sources of energy,”
BP’s website
states.


The American multinational oil company, Chevron has current television advertisements which sound like the trailers for global warming documentaries. “Our lives demand oil,” the narrator says, and continues with “Oil, energy, the environment. It is the story of our time.” The ad goes on to cite a few facts: “It took us 125 years to use the first trillion barrels of oil. We’ll use the next trillion in 30.”
ExxonMobil has yet to launch an advertising campaign like BP’s or Chevron’s, but on the company’s website it claims to be committed to meet America’s energy needs “through continued investments in energy supplies and ever cleaner technologies that help secure America’s economic future.”
Oil companies and renewable fuel
Despite BP, Chevron, and Exxon’s claims, the reality is that they are not invested in either sound environmental policies or alternative fuel. According to a 2007 Senate document, the oil industry spent $98 billion on alternative fuels, but “very little of the $98 billion spent on these technologies was invested in renewable or alternative energy sources.” The money was spent on “production of electricity from wind, solar, geothermal, and landfill gas.”
The Senate document further states that the oil industry “modestly invested in…vehicle fuel efficiency technologies,” and oil companies used “their market power to discourage service stations from stocking or offering E85 fuel and to create rules that make it difficult for consumers to compare prices for, fill up with, or purchase ethanol (E85).”
Chevron requires E85 pumps to be set apart from gasoline pumps and will not allow their stations to list E85 on their main sign listing fuel prices. BP bans stations with its company name from mentioning E85 “on signs on gasoline dispensers, perimeter signs or light poles,” according to a 2007 Wall Street Journal article. Exxon does not sell E85 at its stations.
US lawsuits against BP
The giant British energy company, British Petroleum (BP), agreed to pay $373 million on October 24, 2007 to settle charges of overcharging U.S. propane customers millions, and ignoring environmental warnings which resulted in a deadly explosion in Texas and an Alaskan oil spill.
The charges against BP involve three separate cases which federal investigators have pursued for years. The first case involves a 2004 scheme by BP America, BP’s American subsidiary, to buy big quantities of propane in order to inflate the price charged to U.S. customers. Other propane buyers were forced to pay very high premiums, and had to pass the cost on to their customers. The prices in areas such as New York, Pennsylvania, and Illinois rose to 94 cents a gallon.
BP reached an agreement with the Justice Department to avoid criminal prosecution by paying $100 million, plus fines adding up to $25 million to the U.S. Postal Service, $125 million to the Commodity Futures Trading Commission (CFTC), and $53 million in restitution.
Four former traders were charged by the Justice Department of 20 counts of mail and wire fraud, plus commodities violations. Some of the four traders were caught on tape while they discussed how BP could “control the market at will.”
The CFTC’s Chairman Walt Lukken voiced his “outrage that these people were taking advantage of innocent consumers.”
The second case involved an explosion at a Texas City, Texas BP refinery which killed fifteen employees and injured over 170 others. BP pled guilty to a felony in Texas and will pay $50 million. The explosion violated the Clean Air Act which was enacted in 1990 after an explosion at the Union Carbide plant in Bhopal, India. The explosion killed and injured thousands.
The third case involved an oil spill of 201,000 gallons into Alaska’s Prudhoe Bay. BP pled guilty to violating the Clean Water Act and will pay $20 million. BP will also pay a $12 million fine plus $4 million to the state of Alaska, and another $4 million to the National Fish and Wildlife Foundation.
The Clean Water Act first took shape in 1972 as the Federal Water Pollution Control Act Amendments. It was amended several times, the last time in 2002.
BP issued a press release on October 24, 2007 which admitted that they company “failed to meet our own standards and the requirements of the law.” The statement included an apology by BP America Chairman and President Bob Malone.
“They represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion program more responsive to changing operating conditions and to ensure that our participation in the nation’s energy markets is always appropriate,” Malone said.
“Obviously, the actions that we’re responding to today reflect that there were some very serious problems within the company,” said acting Attorney General Peter Keisler.
The Acting Chairman of the CFTC Walt Lukken said, “BP engaged in massive manipulation, the magnitude of this settlement reflects that the Commission will not tolerate trading abuses in our open and competitive markets.”
“This case demonstrates that criminals aren’t just found on unsafe streets … they could be in corporate board rooms or on trading desks as well,” said deputy chief postal inspector Kenneth Jones.
“BP committed serious environmental crimes in our two largest states…Today’s agreement sends a message that these types of crimes will be prosecuted,” said Environmental Protection Agency (EPA) official Granta Nakayama.
The EPA issued a press release which stated the fines against BP are the “largest criminal fine ever assessed against a corporation for Clear Air Act Violations and the first criminal prosecution of the requirement that refineries and chemical plants take steps to prevent accidental releases.”
Exxon spent billions to challenge global warming
Mother Jones magazine, in 2005, published an expose on ExxonMobil’s funding of global warming skeptics. Chris Mooney, the reporter who broke the story, spoke to journalist Amy Goodman on her Democracy Now radio show in 2005. Mooney told Goodman that a number of the organizations turning out studies debunking global warming “were actually receiving funding from ExxonMobil.” Mooney described the organizations as “think tanks and public policy groups.”
According to a 2007 report by the Union of Concerned Scientists, Exxon gave almost $16 million from 1998 to 2005 to 43 organizations.
“ExxonMobil has manufactured uncertainty about the human causes of global warming just as tobacco companies denied their product caused lung cancer,” said Alden Meyer, the Union of Concerned Scientists’ Director of Strategy & Policy. “A modest but effective investment has allowed the oil giant to fuel doubt about global warming to delay government action just as Big Tobacco did for over 40 years.”


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  • Abbot Rhineway

    Hi Gina – great post. I’ve got an idea for an angle that might help:
    First of all, why *should* oil companies invest in anything “Green”? I mean, they are making massive amounts of money doing it the old fashioned way, and they’re well aware of the amount of time (roughly) that they have to keep doing that. So if we really want them to change their ways, we need to provide them with a reason to do something more than greenwash.
    Government mandates might help, so would a massive consumer turn against fossil fuels (possible if prices stay high), or something else?
    I really think that there must be people in these organizations, including Exxon, that understand the gravity of out energy/environmental situation and would actually like to do something about it. But what can they do? How do you turn the course of a zillion-ton battleship that has been designed for one purpose and has incredible inertia to keep going exactly as it has for decades?
    One thing I know is that the old method – just battering back at them – seems only minimally effective. I think we’ll need better government and we’ll also need education. If oil companies see people turning away from gasoline then they’ll start to take notice. I just don’t see them changing much as long as we demand it!

  • Anonymous

    Shares in Shell then?

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