The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Wednesday, November 7, 2018

Strategic CSR - Oil

The article in the url below would be funny if it was not so serious. Apparently, the extraction industry (i.e., the producers of oil and gas) is requesting financial assistance from the US government to help protect its assets from the effects of climate change:
 
"As the nation plans new defenses against the more powerful storms and higher tides expected from climate change, one project stands out: an ambitious proposal to build a nearly 60-mile 'spine' of concrete seawalls, earthen barriers, floating gates and steel levees on the Texas Gulf Coast. Like other oceanfront projects, this one would protect homes, delicate ecosystems and vital infrastructure, but it also has another priority — to shield some of the crown jewels of the petroleum industry, which is blamed for contributing to global warming and now wants the federal government to build safeguards against the consequences of it."
 
The project largely protects the Texas coastline, from the Louisiana border to south of Houston – an area that is:
 
"… home to one of the world's largest concentrations of petrochemical facilities, including most of Texas' 30 refineries, which represent 30 percent of the nation's refining capacity."
 
This reminds me of a Newsletter I wrote a few years ago about Rex Tillerson who, when he was CEO of Exxon, was helping to sue a fracking company to prevent it from drilling too near to his house (see Strategic CSR – Exxon). And, as you might expect, protecting such a large area is not cheap:
 
"Texas is seeking at least $12 billion for the full coastal spine, with nearly all of it coming from public funds."
 
So, even though Exxon made $20 billion in profit (that is 'profit,' not revenue) last year, and even though they were only able to generate that profit by further deteriorating the environment, they feel they do not need to contribute anything to help cope with the consequences. Needless to say, many are not onboard with this bailout:
 
"… the idea of taxpayers around the country paying to protect refineries worth billions, and in a state where top politicians still dispute climate change's validity, doesn't sit well with some."
 
And this reluctance to pay is even to protect the industry's own assets, let alone the rest of the coastline that will be equally devastated:
 
"Federal, state and local money is also bolstering defenses elsewhere, including on New York's Staten Island, around Atlantic City, New Jersey, and in other communities hammered by Superstorm Sandy in 2012."
 
And, from the commentary and quotes reported in the article, it seems like Texas politicians are just fine with that.
 
Take care
David
 
 
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Big oil asks government to protect it from climate change
By Will Weissert
August 22, 2018
The Associated Press