ExxonMobil Should Not be ‘Forced’ to Invest in Alternative Energy

2 comments

May 12, 10:23 AM

by John Ryden, Global Warming Examiner

 

 

In my last article I talked about ExxonMobil’s declining oil production. (I'm using ExxonMobil as being representative of all the major oil companies). They are also buying back large amounts of stock to return their capital to their shareholders. There are some people, including a group representing the Rockefeller Family that feel ExxonMobil should use this money to invest in alternative energy projects.

My own feeling is that they should stick to their area of expertise which is the production and distribution of oil and gas. That is what they know how to do and what they are very good at doing. There are plenty of other companies that are developing the expertise for solar, wind, ocean current, geothermal, bio fuels, etc. It is more efficient for them to give their capital back to their shareholders and let their shareholders invest the money in these new companies. Tax avoidance, one of the reasons given by the Rockefeller Family for ExxonMobil to make these investments directly, is not a good reason for them to pursue ventures they are not comfortable with.

There are calls for ‘forcing’ oil companies to invest in Alternative Energy. I am not even sure how you could force them to do that. Does this include only American Oil Companies or would you also try to force foreign companies to make these investments? How would you define what would be considered an Alternative Energy Investment? Build a bunch of windmills somewhere? Do they have to be built in this country? Would planting a bunch of trees to offset carbon emissions count?

In the current political debate on Energy Policy, many people are calling for windfall profit taxes on oil companies. These taxes would be counter-productive. Tax something and you generally get less of what you tax. We need more oil and gasoline in the short run, not less. How does a windfall profits tax put more gasoline in your gas tax? A windfall profits tax is more likely to lead to shortages and higher prices.

A more responsible program would be to open up more off-shore areas of this country to drilling. The government can write their own rules for developing these resources starting with selling the drilling rights through competitive. They could also put ‘windfall’ taxes on oil and gas developed from these properties. This would be stipulated up-front as part of the competitive bidding process. This type of program would put more gasoline in peoples cars, which would also help keep prices down.

Why, as a writer on Global Warming, am I proposing that we develop more fossil fuel resources in this country? It is really a matter of choosing between alternatives. We can’t just stop using fossil fuels abruptly without serious economic damage to our economy. We need a long term plan to develop alternatives and slowly switch to those alternative fuels. We will still need fossil fuels, probably for the next 40 or 50 years. Hopefully we will start the switch soon and we sill be using fossil fuels in diminishing quantities until we stop using them completely. The fossil fuels we should use in the interim should be the cleanest and cheapest fuels like natural gas and light oil. That is why we should allow drilling off our shores. The alternative is to develop tar sands, oil shale and coal to liquids, all of which would add more carbon to our atmosphere than allowing drilling off our shores. Economic benefits would be achieved from increasing the supply of domestic oil, increased federal taxes, increased American jobs and a reduced dependence on foreign oil.

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