Oil Watchdog

11-21-08 by dugan

We at OilWatchdog have been relentlessly critical of Chevron’s faux-green ad campaigns (here, here, here and here.) I’ve recently heard from reporters who are sniffing around the ubiquitous image ads–the fortune Chevron is spending on the ads is so obviously out of proportion to the size of the piddling green projects the ads dreamily describe. Today, in an OpEd in the L.A. Times, a smart, dogged critic of the oil indsutry, Antonia Juhasz, digs out the dollars and cents evidence that Chevron’s smiling front is a fraud. The article is so effective because she gives Chevron every benefit of the doubt, even though the company keeps the details of its renewable spending as secret as its refinery production breakouts.

Juhasz, author of the excellent new history and critique, "The Tyranny of Oil," (excerpt here) had as much luck with Chevron’s PR department as reporters asking for the meeting calendar of Vice President Cheney: 

Chevron’s "human energy" advertisements are everywhere: TV, magazines, bus stops and newspapers. The commercials — which end with the words "oil," "geothermal," "solar," "wind," "hydrogen" and "conservation" flashing one at a time between the three bars of Chevron’s logo — encourage us to believe that the company is equal parts clean energy, conservation and oil. But is it really, as the commercials claim, "part of the solution" to the world’s climate crises, rather than at the heart of the problem?

You’d think the company would be eager to demonstrate its commitment to alternative energy with accessible, easy to understand financial figures. In fact, the details are all but impossible to come by.

If you go to the company’s website, you’ll find cheery reports on various alternative fuels that state: "Chevron has invested more than $2 billion in renewable and alternative energy services since 2002. We expect to invest more than $2.5 billion from 2007 through 2009." But you will not find more detailed breakdowns that attach actual dollar amounts to specific investments in specific years.

If you call, you’ll be told the same PR message: Some $4.5 billion in once and future green expenditures. And you may also get referred to other postings on the website, which include the company’s "corporate responsibility report," annual shareholder reports and 10-K tax filings with the Securities and Exchange Commission. But you won’t get specific numbers — as the company’s spokesman told me, Chevron does not "break down spending for individual businesses" or "disclose more than has been disclosed in the 10-K."

When Juhasz goes to that SEC document called a 10-K, it lumps spending on renewables with  "alternative" energy, which usually means new ways to use fossil fuels, such as making liquids from coal–the dirtiest possible way to make a fuel. Yet she grants Chevron every penny of that spending, and it still comes out to less than 4% of profit on any kind of alternative energy:

This "all other" category allows us to get a sense of the company’s dollar commitment to alternative and renewable energy. Let’s be extremely generous (because "all other" also includes dirty businesses too, like coal mining and traditional power plants, and apparently neutral expenditures such as "worldwide cash management") and credit the entire category to the green column: $417 million in 2006 and $774 million in 2007.

That’s 2.4% and 3.8% of Chevron’s total capital and exploratory expenditures. Not even a measly 4%.

Another way to look at it? In 2006, Chevron purchased the most expensive offshore oil-drilling rig in history for $600 million — nearly 1 1/2 times its entire "all other" capital and exploratory expenditure that year.

And this is really the crux of the problem. Compared with what it spends producing oil and other environmentally catastrophic fuels in increasingly environmentally catastrophic ways — scraping through tar sands, burrowing under mountains for oil shale and barreling into the depths of the ocean — Chevron is spending minuscule amounts on clean alternatives.

The "human energy" ads are designed to get us to believe that when we fill up our tanks at a Chevron station, we’re supporting clean energy, an assumption that might discourage us from advocating for new taxes on the oil industry or for cuts in its subsidies — money that could be used for government investments in alternative energy.

The ads look nice, and to see Chevron’s logo decorated with the words "solar" and "wind" is reassuring. But year in and year out, the energy giant’s record-breaking profits don’t go to renewable energy, they go to oil. Don’t believe Chevron’s hype.

Frankly, Chevron doesn’t care what you, I or even Juhasz think. It’s ads are everywhere, but the only eyeballs they care about are in Washington (and right now, Chicago, where the Obama transition team is at work). If it can soften up the new White House even a little, a 10-figure ad budget will be worth it. I can tell you from experience that Chevron’s PR chiefs are looking for any way to undermine the OpEd, and will protest it. They won’t be able to dent her figures, though.