By Neil Chatterjee
ReutersNovember 8, 2002
Oil major Exxon Mobil is now working more closely with non-governmental organisations on upstream projects to help avoid the social unrest it has suffered in the past, a senior executive said on Friday.
Frank Sprow, vice-president in health, safety and environment, said traditionally oil companies tended to just pay their taxes and expect governments to take care of local concerns."We're older and wiser now," he told Reuters in an interview. "We're stretching out more to work with NGOs," he said, adding their local expertise could be valuable in remote developing areas.
He said ensuring local populations received economic and social benefits from projects such as the controversial Exxon-led Chad-Cameroon oil pipeline would also benefit the company long-term."You can't have a healthy company working in an unhealthy society."
He pointed to the involvement and backing of the World Bank for the pipeline, which he said had slowed the project down but meant it would be better in the long-run.
Activist groups have still criticised the project, saying it will damage the environment and have negative social consequences, though Sprow said the company had sought local views and improved health care."In places like Chad, the ability to have a job and receive health care benefits can make a real difference," he said, adding Exxon was working with Unicef and Africare on the project.
The company has suffered from its experiences in the resource-rich Indonesian province of Aceh, where separatists fighting the government bombed Exxon's gas export terminal last year. "It's not a desirable outcome to have people shot in the environs (of a plant), and having to go to massive security operations. In Aceh we had to shutdown, which was an economic handicap."
TARGETED BY GREENS
However, Sprow said that the attitude of critical groups would not stop it pursuing a project or stance that it thought was economically or scientifically sound. He said the company had been targeted by environmentalists because it was seen to fail two "litmus tests" -- accepting a definitive link between fossil fuel use and global warming, and on investment in renewable energies such as wind and solar power.
"Activist organisations want you to take an oath that man is ruining the environment -- it's a substantial risk but the science is not a done deal, so we fail that," he said.
"We are very interested in renewables for their future potential but it is going to take a long time for them to become economic," he added. The company says it has significantly reduced greenhouse gas emissions at its plants through energy efficiency, and is working with car manufacturers to develop cleaner fuels and fuel cell engines using hydrogen from gasoline. "Renewables can and should play a role but it is disingenuous to claim that they will play a major role in the next 20 years," he said.
By contrast European energy majors BP and Shell have become among the world leaders in solar technology, although Prow said Exxon had not ruled out such renewables in the future. "I don't think companies have contructed entry barriers that stop us if (renewables) become economic," he said.
The company has stepped up efforts this year to demonstrate its decisions are economically-based rather than ideological, since activist group StopEsso began targeting it last year.
The group, backed by Greenpeace, have protested at Exxon-owned petrol stations in Europe twice this year, since it blames the company for lobbying the U.S. government to pull out of the U.N. Kyoto Protocol on climate change. The company denies being unconcerned by climate change and says its retail sales have not been affected.
Sprow said Kyoto would do little to mitigate climate risk, which he said needed substantial investment for breakthrough technologies from private companies, either alone or through voluntary co-operation with governments.
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