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THE ENERGY INDUSTRY'S ETHICIST

On November 11th, 60 high school students from California ’s Contra Costa County gathered at a ChevronTexaco office building in the town of Concord to take part in Ethics Day 2004. Employees of America ’s second-largest oil producer were among the 35 local business leaders on hand to talk with “the executives of tomorrow,” as the Greater Concord Chamber of Commerce’s Donna Bradshaw called the students, about personal and professional moral dilemmas they will face in the future. With wise guidance from the executives of today, the youngsters might avoid the dangerous “I didn’t know it was wrong” and “I thought I could stop it before it got too big” mentalities that Bradshaw said often get people into trouble.

Meanwhile, as ChevronTexaco played honorable host: it had just been sued by four New York gasoline dealers for price fixing, which allegedly occurred from 1998 through 2002; ABC News would soon report that the company was under U.S. criminal investigation for allegedly making illegal oil deals with Iraq in 2001; the Chicago Tribune was about to expose how ChevronTexaco turned a dilapidated urban tenement into a $27 million tax shelter; and company executives were basking in the glow of the Election Day victory of California’s Proposition 64, supported by ChevronTexaco with a $115,000 corporate contribution to the Yes on 64 lobby campaign. The ballot initiative limits the legal standing of individuals and public interest groups under the Unfair Business Practices Law, which had been used previously to force ChevronTexaco to clean up 1,000 waste sites contaminated with MTBE, a gasoline additive with adverse health effects long understood and ignored by the oil industry.

In recent months, ChevronTexaco has rolled out a major marketing campaign, entitled “Turning Partnership into Energy,” designed to earn the company the trust of “government and community influentials” on issues economic, social and environmental. Advertisements appear on television programs including The News Hour, Nightline, Meet the Press, Face the Nation, McLaughlin Group, Capital Gang, This Week and Dateline, and in publications including The Economist, Time, Newsweek, The Wall Street Journal, Atlantic Monthly, Harpers, The New Yorker, Foreign Affairs, Harvard Business Review, Business Week, The Hill, Roll Call, National Journal and Congressional Quarterly.

Look out Randy Cohen, "The Ethicist" of NPR and the New York Times, 'cause ChevronTexaco wants your job. Photo: NPR

But should ChevronTexaco’s marketing messages be trusted? Below, we examine the three print ads from “Turning Partnership into Energy” that focus on environment, comparing the company’s rhetoric to its environmental record in order to uncover whether its price fixing offenses, ill-gotten gains in Iraq, profiteering in the projects and lobbying against legal accountability are fair representations of its ethical orientation, or, as its employees surely advised the Contra Costa high schoolers, it should be a forgiven a few transgressions because everybody, especially a global energy giant with 47,000 workers in 180 countries, is bound to make mistakes, even if he, she or it means well. Though no one beyond the company’s boardroom can know for certain whether it means well or not, the following greenwash game will demonstrate whether ChevronTexaco even means what it says.

Marketing Pitch #1

“Meeting Natural Gas Demand” asserts that ChevronTexaco “will go to the ends of the earth to find cleaner energy.” (Apparently, Australia is a continent on the verge of pre-Columbian collapse.)

“You may already know,” the ad tells readers, “that natural gas is one of the most environmentally friendly fuels in the world….” – ahead of oil and coal, behind hydrogen, wind, solar… but who’s counting? – “What you may not know is that ChevronTexaco is working with governments and partner companies to secure the largest deposits of natural gas in Australia for shipment to the U.S.”

Click image to view the ad.

To establish a distribution system to bring gas from Australia’s offshore Gorgon Gas Field to California’s booming energy market, ChevronTexaco has tried to gain approval for a liqueified natural gas (LNG) import terminal in Mexican waters near Baja, and to convince the Western Australian State Government to allow construction of an LNG facility on Barrow Island where Gorgon gas could be processed for export.

Trouble is, sometimes, in order to be kind to the environment by giving the gift of gas, one has also gotta be cruel. The Baja Peninsula just south of the Mexico-U.S. border is, according to Reuters, “one of the world’s best preserved ecosystems” and “a breeding ground for thousands of gray whales.” The proposed LNG facility, a floating structure three football fields-large that would be anchored to the sandy ocean floor, might harm the habitats of sea birds, sea lions and other animals, particularly marine species susceptible to a rise in ocean temperature caused by facility’s use of seawater as a coolant. “They are dumping this on us because our environmental laws are lax here,” lamented Francisco Carillo, secretary of the Mexican Congress’ energy committee. To date, however, the laws have not yielded fully to ChevronTexaco. The company has been issued by the Mexican government just one of three permits required for its Baja project.

On Barrow Island , ChevronTexaco again faced delays because of environmental issues. Barrow Island is a protected nature reserve home to 24 species that exist nowhere else in the world. “Amongst them you’ve got animals such as the spectacled hair wallaby,” Chris Tallentire, director of the Western Australia Conservation Council, told the BBC. “ And we've also got a magnificent Perentie, which is the second largest lizard in the world. Conservationists across Australia are going to be doing all we can to make sure that the proposal doesn't go ahead.”

Despite the conservationists’ best efforts, it appears now that further development of Barrow Island , where ChevronTexaco already has a presence with petroleum operations, will occur. The Australian government issued in-principle approval last fall. To its credit, the company has so far conducted its activities on Barrow Island cleanly enough to convince officials that it will be able to manage its LNG facility there without major incident. Yet, from the text of “Meeting Natural Gas Demand,” one would not guess that ChevronTexaco was “working with governments” merely to quell their environmental concerns. That is not enlightened partnership, as the ad implies. It is basic regulatory process. If ChevronTexaco would like to be so liberal with its definition, it should develop an ad portraying how in October, 2003, it partnered with the Environmental Protection Agency by paying $275 million to settle allegations of air pollution violations.

Marketing Pitch #2

Click image to view the ad.

In “Hydrogen Economy,” ChevronTexaco uses the chicken-and-egg question as an anology for the problem of whether to develop first a network of hydrogen energy stations or a fleet hydrogen-powered vehicles. “Chicken…” reads the ad, showing a hydrogen-powered bus, “meet the egg,” a station that ChevronTexaco is building in partnership with the U.S. Department of Energy and AC Transit of California . “By using this practical approach to build stations, we’re well on our way to building a better tomorrow.”

Undoubtedly, the prototype hydrogen station, located in Oakland and scheduled to open in 2005, is an essential building block. Yet how close does it bring the country to a zero-emissions transportation system? Not as close as it would if ChevronTexaco accelerated its hydrogen program. The company’s financial contribution to the Oakland station is roughly $1.5 million, less than half of the $3.7 million it paid in environmental fines and settlements last year, and depending on how long it runs “Hydrogen Economy,” it may spend more on marketing the station than on making it.

The station is not the extent of ChevronTexaco’s hydrogen operations. Other projects are planned or already underway. Interestingly, nearly all are significantly funded by government grants. David Zalesky of the hydrogen division of ChevronTexaco Technology Ventures, a subsidiary, has stated that public-private joint investments are important for developing a hydrogen infrastructure. But it is possible to move forward without them. If ChevronTexaco relies on limited and, at this moment, partisanly parsed-out government funds to split the costs of a hydrogen-powered “better tomorrow,” that day may come only when all the world’s profitable oil and gas resources have already been used up. Maybe, if ChevronTexaco's pace is any indication, that’s the whole point.

Marketing Pitch #3

Click image to view the ad.

The main text of the “Monitoring Emissions” reads, “After investing heavily in a better technology to measure greenhouse gases, what do we do? Give it away.”

In 2001, ChevronTexaco began developing the SANGEA Energy and Emissions System, a software technology used to estimate emissions from oil and gas operations. On June 22, 2004 , the company issued a press release announcing an agreement to transfer ownership of SANGEA to the American Petroleum Institute (API), though which other oil companies would have access to the software. “We gave [SANGEA] to our competitors,” ChevronTexaco’s ad explains. “Because in the end, improving our environment can best be accomplished by improving our cooperation.”

Beyond its donation of SANGEA (and aside from price fixing), ChevronTexaco has cooperated many times in the past with other oil companies, often through API. Typically, their joint efforts achieve little environmental progress, but instead advance industrial activity into sensitive ecosystems and exacerbate global warming.

"Where did all the ice go?"

API is not, in fact, a forum for competition; it is a meeting place for the oil and gas industry’s friends and family. Patriarch Dave O’Reilly, Chairman of the Board and CEO of ChevronTexaco, is also API’s Chairman. API is a trade group that lobbies for policies – notably the expansion of foreign and domestic energy markets – with industry-wide benefits, and performs research that substantiates those policies. By and large, what’s good for one member of the API is good for all. Thus, as “a unified voice,” it opposes mandatory regulations on greenhouse gas emissions – of which ChevronTexaco released 63.9 million pounds last year, up from 2002 levels – preferring voluntary measures that allow companies to monitor and enforce themselves. SANGEA, while a useful technology, is also a tool used to validate the industry’s belief in self-regulation.

ChevronTexaco knows rock -- or at least how to drill through it. Photo: PLT

One genial meeting place for ChevronTexaco and other API members is the field of environmental education. In 1998, a group of oil companies including Chevron (before it merged with Texaco) met in Washington , DC , to discuss a $6 million lobbying plan against the Kyoto Protocol. A leaked memo stated, “Informing teachers/students about uncertainties in climate science will begin to erect barriers against further efforts to impose Kyoto-like measures in the future.” Four years later, API worked with Project Learning Tree, an environmental education program founded by the logging industry, to produce the “Energy and Society” K-8 module, featuring the "Energy and Me" CD, which "integrates music and dance with energy education." The curriculum invites children to “discover how much life there is in a barrel of oil,” and teaches that global warming is still scientifically controversial, though if its effects ever do arise, they will not appear for 80 to 100 years. API reaches high school students, too, by funding National Science Teachers Association’s “Science of Energy” website, featuring a photo gallery that features several images of old oil rigs and pipeline projects, but none of cutting-edge solar panels or wind farms.

ChevronTexaco’s involvement with API is just the tip of the iceberg of its envcooperation concerning the environment. CEO Dave O’Reilly, is a member of the Business Roundtable, an association of 150 CEOs whose corporations employ 10 million Americans and produce $4 trillion in annual revenues. The Roundtable’s Climate RESOLVE program is a response to President Bush’s 2002 initiative calling on the private sector to spearhead a reduction in America’s emissions intensity – voluntarily, of course. Emissions intensity is jargon for the ratio of real emissions to GDP. President Bush’s plan therefore allows businesses to increase real emissions year-to-year as long as their economic output grows faster. In the rare instances when ChevronTexaco addresses concrete goals related to greenhouse gas management, it refers to reductions in emissions intensity.

Lastly, though not exhaustively, the company also belongs to Arctic Power, a lobby group committed to opening the Alaska National Wildlife Refuge (ANWR) to oil and gas exploration. The U.S. Department of the Interior estimates that drilling in ANWR will displace or damage as much as 40 percent of the Porcupine River Caribou herd, threaten denning areas for polar bears and disturb ecosystems that support over 130 species of migratory birds. In 2002, London-based BP left Arctic Power after deciding that the ANWR’s was best left up to the American public – a Zogby poll in September, 2003, found that 53% of Americans oppose Arctic drilling, while 39% support it. Currently, an environmental coalition consisting of U.bS. PIRG, the Sierra Club and Green Century Capital Management are calling on ChevronTexaco to become the first U.S. company to respect public opinion and leave Arctic Power. It has so far refused. (Click here to take action and tell ChevronTexaco to quit supporting Arctic Power’s efforts to open ANWR.)

The Final Tally

Three ads, three misleading or incomplete representations of ChevronTexaco’s environmental responsibility. Three strikes and you’re a greenwasher.

home > take greenwash to the cleaners > greenwasher of the month > november 2004