Should ExxonMobil Corp. separate its chairman and CEO positions and invest more in alternative energy projects? These questions will come to a vote at the company's shareholder meeting tomorrow. Members of the Rockefeller family, plus 19 institutional investors -- including some of ExxonMobil's largest share owners, with more than $740 billion in combined assets under management --
will vote yes on some or all of the relevant resolutions.
ExxonMobil's critics cite the billions of dollars that rivals Chevron Corp., BP plc and Royal Dutch Shell plc have invested in alternative energy and charge that ExxonMobil is falling behind. At least in the press releases, though, the critics don't say much about how successful the rivals have been so far.
That may be partly because it's hard to tell. None of them break it out from other businesses. Chevron, for example, lumps its alternative fuels business into "all other" income along with mining, power generation and real estate. The category lost $255 million in the first quarter versus a profit of $65 million in the same period last year, versus $5.2 billion for the whole company in the first quarter and $4.7 billion in the same period last year. Its losses haven't hampered its plans: It expects to spend $2.5 billion from 2007 through 2009 in alternative and renewable energy technologies. "There's no doubt that we're going to need all the energy sources we can get," vice chairman Peter Robertson said April 15 on PBS' "NewsHour." "All these things we do, if we do them at sufficient scale, will make a difference in the marketplace."
BP didn't fare any better. It also lumps its alternative energy business into an "other" category with its shipping and aluminum assets, and that category lost $213 million in the first quarter versus $427 million in the same period last year, compared to $7.6 billion in profit for the whole company and $4.7 billion in the same period last year. CEO Tony Hayward said at the International Renewables Energy Conference in Washington on March 4 that the company is investing $1 billion in alternative energy each year. But he was realistic: "Even though 'cleantech' is growing very fast, let's be honest: The scale at which the industry is conducting projects today is not going to have much impact on the energy market of the future," he said. "For that, we need sustained investment, on a massive scale. A step change of that nature will require sound energy and environmental policies from governments worldwide."
And while Shell says it has also invested $1 billion in alternative energy, making it one of the world's leaders, it's difficult to find where their results reside on its financial statements.
Chevron, BP and Shell have long contended that their aim is not to make money on their alternative energy investments right away but to help develop the industry and in the end help the world; if they make money, that's just gravy. ExxonMobil may be forced to play along. -
Claire Poole
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