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When Exxon realized the problem decades ago, they could've lead a forward-looking campaign. Investing in renewables and nuclear technology. If they had done tha

by Reedx 7y ago

When Exxon realized the problem decades ago, they could've lead a forward-looking campaign. Investing in renewables and nuclear technology. If they had done that, maybe today we'd be mostly powered by clean energy. Here's the kicker: It would've been a long term win-win for both Exxon and the world. Putting themselves in a strong position to capitalize on the transition and even be a respected player.

fennecfoxen 7y ago
This post is a facile fantasy. To be clear, while you are not required to give a flying fig about whether or not Exxon investors earn a return, you can't exactly expect them to all line up to gleefully throw their money away, either. That's a charity, not a business. And trust me, if we compare the financial returns on investment for renewables and nuclear technology over the past N decades, versus Exxon's returns today? Definitely not a win-win.
- Reedx 7y ago
  I'm talking about a long term view. If they had started investing back then, they'd likely be in a better position today and going forward. A leader in future fuels instead of clinging onto fossil fuels, which is definitively short sighted.
  - fennecfoxen 7y ago
    Exxon is worth $293 billion right now. Its earnings over the past N decades are probably worth more. For that money, you could buy alternative energy providers outright. You could buy Siemens (~$50 billion), who, in addition to transportation and other lines of businesses, have a big renewables business, and are among the world leaders in nuclear ... or, well, they were, until 2011, when they abandoned that line of business entirely. There is no financial case to be made here whatsoever.
    - smt1 7y ago
      I don't disagree, but Exxon might have had the cachet, especially in the 1980s, to speed up decreasing the carbon intensity of the economy. The entire energy sector is now <= 5% the size of the entire S&P, down from 18%, so it's unclear if energy companies still have that level of cachet. Now, going forward, in 2020, there might be a different calculus. Usually, the market cap/stock price of a company reflects future cash flow. For an E&P company, much of Exxon's valuation comes from the cash flow expectation on its oil reserves. That's problematic if some of those oil reserves are in effect stranded assets. Certainly not all will likely, but say, things like the tar sands? It very well could be.

by Reedx 7y ago

fennecfoxen 7y ago

This post is a facile fantasy. To be clear, while you are not required to give a flying fig about whether or not Exxon investors earn a return, you can't exactly expect them to all line up to gleefully throw their money away, either. That's a charity, not a business. And trust me, if we compare the financial returns on investment for renewables and nuclear technology over the past N decades, versus Exxon's returns today? Definitely not a win-win.

Reedx 7y ago
I'm talking about a long term view. If they had started investing back then, they'd likely be in a better position today and going forward. A leader in future fuels instead of clinging onto fossil fuels, which is definitively short sighted.
- fennecfoxen 7y ago
  Exxon is worth $293 billion right now. Its earnings over the past N decades are probably worth more. For that money, you could buy alternative energy providers outright. You could buy Siemens (~$50 billion), who, in addition to transportation and other lines of businesses, have a big renewables business, and are among the world leaders in nuclear ... or, well, they were, until 2011, when they abandoned that line of business entirely. There is no financial case to be made here whatsoever.
  - smt1 7y ago
    I don't disagree, but Exxon might have had the cachet, especially in the 1980s, to speed up decreasing the carbon intensity of the economy. The entire energy sector is now <= 5% the size of the entire S&P, down from 18%, so it's unclear if energy companies still have that level of cachet. Now, going forward, in 2020, there might be a different calculus. Usually, the market cap/stock price of a company reflects future cash flow. For an E&P company, much of Exxon's valuation comes from the cash flow expectation on its oil reserves. That's problematic if some of those oil reserves are in effect stranded assets. Certainly not all will likely, but say, things like the tar sands? It very well could be.