By We hear plenty about threats to American democracy: Donald Trump’s a threat, the Republican party is a threat, and any number of other people or political parties are threats. Now it’s ExxonMobil’s purchase of Pioneer Natural Resources.
Jeff D. Colgan, a professor of political science and the director of the Climate Solutions Lab at Brown University, wrote in an easily missed piece entitled “Exxon Mobil’s Pioneer Acquisition Is a Direct Threat to Democracy” for the New York Times, “The democratic argument against the proposed deal is simple. In politics, concentrated interests, like rich corporations, have powerful advantages over diffuse interests, like voters, that can distort outcomes and thwart progress.”
Dr. Colgan’s argument is, of course, all about climate legislation. A bigger ExxonMobil will be able to “water down” climate legislation that he contends most Americans support. No doubt the students and faculty Colgan hangs around with at Brown are worried about the climate as opposed to the average person who cares more about how much money it takes to fill their gasoline tank.
The poli-sci professor uses dated material from as far back as 1977 to 2016 to make his case that ExxonMobil has been sowing “public misinformation and funding conservative groups disguised as grass-roots organizations” to sway voters away from voting against their pocketbooks. However, Colgan omits the fact that in June 2021, as the New York Times reported,
Last week, an activist investor successfully waged a battle to install three directors on the board of Exxon with the goal of pushing the energy giant to reduce its carbon footprint. The investor, a hedge fund called Engine No. 1, was virtually unknown before the fight.
The tiny firm wouldn’t have had a chance were it not for an unusual twist: the support of some of Exxon’s biggest institutional investors. BlackRock, Vanguard and State Street voted against Exxon’s leadership and gave Engine No. 1 powerful support. These huge investment companies rarely side with activists on such issues.
The stunning result turned the sleepy world of boardroom elections into front-page news as climate activists declared a major triumph, and a blindsided Exxon was left to ponder its defeat.
BlackRock’s Larry Fink was behind this environmental activism, and now just two years later there’s been a change of heart. Fink has experienced serious blowback from many of his conservative paymasters, reports Doomberg:
The energy crisis in Europe—still in its infancy when Exxon suffered its setback at the board—matured into a global economic emergency of historic proportions. And, undoubtedly emboldened by his assessment of the West’s many strategic energy weaknesses, Putin made his move on Ukraine. These events reminded leaders of all stripes that energy is the ultimate master resource.
While leaving out the Ukraine and Israeli wars, Colgan contends ExxonMobil, with its record $56 billion in profit, should “invest more seriously in renewable energy, carbon capture and storage or other technologies that are compatible with long-term environmental sustainability.” Specifically, he suggests it buy a solar company. Never mind the solar business generates bankruptcies, not profits.
Unknown to Dr. Colgan, ExxonMobil’s recent purchase of Denbury Inc. “gives Exxon ready-made CO2 transportation and highlights its bets on making carbon capture a profitable business.” Also, there is more to crude oil than gasoline. Bloomberg reported the company
has long pursued a strategy of upgrading refineries to expand production and make higher-value products from crude oil such as lubricants and plastic feedstock. But it now sees those projects potentially helping the company to move away from traditional fuels, demand for which is likely to wane in coming decades.
As for its Pioneer acquisition, “ExxonMobil believes the transaction represents an opportunity for even greater U.S. energy security by bringing the best technologies, operational excellence and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.”
Colgan winds up his piece with a call for “government to protect its people from corporate self-interest that’s detrimental to democracy and the global environment. This deal endangers the world, and it should be stopped.”
The rational among us will say, “Three cheers for ExxonMobil,” and consider stopping our kids from attending Colgan’s classes at Brown.
