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ExxonMobil ended its third quarter with a net loss of $680 million, compared to a $3.2 billion profit at the same time last year. The loss may prove to be the industry’s largest write-down in over a decade. Exxon has been increasingly lagging behind other major industry players including Chevron, BP, and Shell, despite CEO Darren Woods’s decision to cut spending for 2020 by over a third to make up for projected losses. Analysts note that the decline is most likely tied to Exxon’s failed bets on oil and gas, and its failure to invest in renewable energy opportunities.
Why This Matters: It is hard to fathom how far the oil giant has fallen — and how fast. ExxonMobil in 2013 was the largest company in the world, but it failed to modernize like its competitors. For example, BP recently pledged to reach zero emissions by 2050. ExxonMobil, on the other hand, doubled down on fossil fuels in 2009 with a $41 billion acquisition of XTO Energy, a move Axios called “spectacularly ill-timed.” Exxon fumbled again in 2017, this time with a massive fracking expansion in Texas’ Permian Basin that came to a grinding halt as the COVID-19 outbreak decimated demand for natural gas. Since 1980, Exxon’s global workforce has plummeted from 390,000 employees to less than 70,000. The real question is which of the other oil majors will meet the same fate.
The Downward Spiral
Because of its lack of foresight and a refusal to change with the times, Exxon now faces a rapid hurtle toward rock bottom. Now, Exxon isn’t even in the top 40 most valuable companies. It’s lost 54% of its total value this year alone. Axios reported that Exxon is now worth less than renewable energy pioneers like NextEra energy and electric car manufacturer Tesla. Exxon isn’t the only oil company plummeting in value; Chevron is now down 42%. Meanwhile, NextEra, the world’s largest solar and wind power generator, found itself up 23%. ExxonMobile announced this week it will be laying off 15% of its global workforce amid a pandemic, with plans to cut 1,900 jobs in the U.S., mostly in Houston where Exxon’s headquarters is located. 3.7 million Texans have applied for unemployment relief since mid-March, and the state saw major surges in unemployment as recently as September.
Oil Stains Don’t Come Out Easy
Exxon, and many oil companies like it, may be seeing their empire crumble, but their environmental legacy won’t fade anytime soon. Exxon’s most famous failure, the 1989 Exxon Valdez oil spill, irreparably damaged ecosystems in the Gulf of Alaska. The region’s orca population hasn’t recovered; due to high PCBs in the water, deposited by oil-cleanup chemicals, one group of whales known as “Chugach transients” hasn’t produced a surviving calf since 1984. By conservative estimates, 21,000 gallons of oil remained in the gulf as of 2014.
The Trump Administration’s rollbacks have made it even harder for communities to petition the EPA for investigations. Mustafa Ali, one of the founding members of the environmental justice office at the EPA, explained, “There have never been enough resources in those spaces,” he said. “What’s new is that now there’s actually a strategic plan to dismantle the basic protections that have been in place for years on both the civil rights and environmental side.”
However, the collapse of Exxon offers a shining light for environmentalists. Felix Salmon, the chief financial correspondent at Axios, believes that Exxon won’t be the last of the oil giants to fall in the near future as a result of climate change, quoting the hit Broadway show Hamilton, “Oceans rise, empires fall.”
By Natasha Lasky, ODP Staff Writer Cities across the US are transitioning their buildings to clean energy, which would mean banning natural gas in new construction and promoting electric appliances. But the question remains whether or not infrastructure — foundational and historic — is ready to handle such a demand for electricity. Why this […]
As more people around the nation are taking to the roads and skies for their vaccinated vacations, one car rental company is making it easier for folks to not only travel in style, but travel green. Hertz has announced that it will be purchasing 100,000 Tesla electric vehicles by the end of 2022 alongside an […]
By Ashira Morris, ODP Staff Writer Last year, the average American household experienced eight hours without power, as storms hammered electrical systems built with less erratic climate conditions in mind. That average outage time is double what it was five years ago. But only looking at the average obscures the experience of people who lived […]
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