ExxonMobil Stands to Profit Handsomely in International Carbon Markets 4

Posted by Brad Johnson Wed, 20 Feb 2008 00:38:00 GMT

ExxonMobil, the world’s largest company by both revenue and market capitalization, has a place on the world stage comparable to a major nation-state (only 23 nations in 2006 had a GDP greater than Exxon’s revenues of $347 billion, which rose 7% in 2007). Only 31 nations exceeded its annual greenhouse gas emissions in 2004 [UN MDG indicators, ExxonMobil CDP response]. If end-use emissions of ExxonMobil’s products are included, its carbon footprint of 1 billion metric tons of CO2 equivalent is exceeded only by five nations.

David Sassoon at Solve Climate asked Mario Lopez-Alcala, a senior analyst with Innovest Strategic Value Advisors, to estimate how the Kyoto Protocol impacts the company. Lopez-Alcala made some counter-intuitive discoveries.
Turns out that under Kyoto, Exxon is responsible for abating only 9 million out of the 138 million tons of its carbon footprint—about 6.9% of its absolute exposure. Mario arrived at this figure by compiling a weighted average of the emissions targets affecting all Exxon operations around the world. His estimate for what it costs Exxon to abate those emissions, assuming it had to purchase carbon credits? About $1 billion a year. (He calculated net present value for the 2008-2012 Kyoto compliance period and applied a standard oil industry discount rate to arrive at the figure, based on an expected price of $28 per ton of carbon. He also had to add in to the calculation, abatement costs for reducing emissions to a baseline year.)

$1 billion annually is not a terribly large liability for a $400 billion company.

Furthermore:
There’s also another aspect to Exxon’s carbon footprint: the 129 million tons of emissions that it is not required to reduce. It is an enormous carbon asset in a world in which carbon has a price, and it presents a tangible opportunity for enhancing profitability – even beyond $40.6 billion. By reducing those emissions – most simply through reduced flaring, co-generation, heat recuperation, and carbon capture and sequestration – Exxon could reap profits from selling carbon credits it generates. Mario reports that BP is the leader in the sector in taking advantage of these opportunities, which are tangible and positive already.

Sassoon concludes that from an investor (as well as moral) standpoint, ExxonMobil’s storied resistance to the science of climate change is a poor corporate position.

Forests and Climate Change 4

Posted by Brad Johnson Thu, 20 Sep 2007 22:00:00 GMT

Institute of Ecosystem Studies President Dr. William Schlesinger is going to be speaking at 6:00 pm this Thursday on Capitol Hill in Washington, D.C., about his recent work on the interaction between forests and climate—and its implications for how and whether carbon offsets should be allowed.

Glenn Hurwitz has more at Grist.

Before coming to IES, Dr. Schlesinger served in a dual capacity at Duke University, as both the James B. Duke Professor of Biogeochemistry and Dean of the Nicholas School of the Environment and Earth Sciences.

255 11th Street SE (close to the Eastern Market metro stop)

RSVP with Glenn Hurwitz (glenn dot hurowitz at ecologyfund dot net)

Oceanic Carbon Offsets ? 1

Posted by Brad Johnson Fri, 20 Jul 2007 11:02:00 GMT

Following up on Wednesday’s global warming committee hearing on carbon offsets, the Washington Post covers the company of one of the witnesses, Planktos CEO Russ George.
A small California company is planning to mix up to 80 tons of iron particles into the Pacific Ocean 350 miles west of the Galapagos islands to see whether it can make a splash in the markets where people seek to offset their greenhouse gas emissions.

Planktos – with 24 employees, a Web site and virtually no revenue – has raised money to send a 115-foot boat called the Weatherbird II on a voyage to stimulate the growth of plankton that could boost the ocean’s ability to absorb carbon dioxide from the air. The company plans to estimate the amount of carbon dioxide captured and sell it on the nascent carbon-trading markets. . . . Environmental groups say the Planktos project could have unforeseen side effects, and the Environmental Protection Agency has warned that the action may be subject to regulation under the Ocean Dumping Act. . . . The Surface Ocean Lower Atmosphere Study, an international research group, said last month that “ocean fertilization will be ineffective and potentially deleterious, and should not be used as a strategy for offsetting CO2 emissions.” The International Maritime Organization scientific group, the Friends of the Earth and the World Wildlife Fund have condemned it. And a group called the Sea Shepherd Conservation Society said its own ship would monitor the Planktos vessel and possibly “intercept” it.

On Wednesday, George appeared before the House Select Committee on Energy Independence and Global Warming and lashed back at his critics. The EPA was working with “radical environmental groups,” he said. In written submissions, he said his firm’s work had been “falsely portrayed” to “generate public alarm.” . . . . George said “it’s the clearest ocean on Earth because it’s lifeless, and it’s not supposed to be that way.”

George asserts that the potential is enormous. He said that the annual drop in ocean plant life was like losing all the rain forests every year. “If we succeed, we’ll have created an industry,” he told the House committee. “If we don’t succeed, we’ll have created a lot of great science.”

Quotes from a few experts on the Planktos plan are below the break.

But leading ocean and climate experts have poured cold water on the Planktos plan by saying that the company can’t accurately measure how much additional carbon would be stored in the ocean or for how long. One reason: Some organisms sink and store carbon deep below the surface. But the overwhelming majority are eaten by fish or other organisms that convert the carbon back into carbon dioxide.

“Actually knowing how much carbon stays down there is a really hard thing,” says Daniel Schrag, director of the Harvard University Center for the Environment.

Schrag said the Planktos project could also generate new algae, which could reduce the amount of oxygen at depths that would endanger other ocean life. “Doing a large-scale ecological experiment before you understand the system is a dangerous thing,” he said.

Others doubt the benefits. “I think iron fertilization in the ocean is not going to make a significant difference to the CO2” problem, said Wally Broecker, a professor of earth and environmental sciences at Columbia University. . . .

Many companies are calling for Congress to set standards for voluntary credits if it does not establish a U.S. version of Europe’s more rigorous cap-and-trade rules.

“The global market for voluntary carbon offsets is currently unregulated,” said Derik Broekhoff, senior associate at the World Resources Institute, “which has led to growing concerns about whether buyers are really getting what they are paying for.”

Other recent stories on carbon offsets:

Voluntary Carbon Offsets--Getting What You Pay For

Posted by Brad Johnson Wed, 18 Jul 2007 13:30:00 GMT

Eager to be part of the solution to global warming, many consumers, businesses and government agencies have turned to carbon pollution offsets to help reduce or eliminate their “carbon footprint.” While these offsets represent a promising way to engage consumers in global warming solutions, there are many unanswered questions as to the efficacy and accounting of these unregulated commodities.

Witnesses
  • Derik Broekhoff, Senior Associate, World Resources Institute
  • Joseph Romm, Senior Fellow, Center for American Progress
  • Thomas Boucher, President and Chief Executive Officer, NativeEnergy LLC
  • Russ George, President and Chief Executive Officer, Planktos, Inc.
  • Erik Blachford, CEO, TerraPass Inc.

Contact: Moulton, David – Democratic Staff Director at 202-225-4012

From the Washington Post: At the hearing, Planktos CEO Russ George, whose company plans to engage in oceanic iron-seeding in the east Pacific, said the EPA was working with “radical environmental groups” who are criticizing his company. In written submissions, he said his firm’s work had been “falsely portrayed” to “generate public alarm.” George said “it’s the clearest ocean on Earth because it’s lifeless, and it’s not supposed to be that way.” He asserts that the potential is enormous. He said that the annual drop in ocean plant life was like losing all the rain forests every year. “If we succeed, we’ll have created an industry. If we don’t succeed, we’ll have created a lot of great science.”

More from the article at this post.