DALLAS – Shareholders of big oil companies overwhelmingly rejected several environmental resolutions including proposals to put climate-change experts on their boards and set goals for greenhouse-gas emissions.
The votes at meetings of Exxon Mobil Corp. and Chevron Corp. shareholders on Wednesday were expected. Some of the ideas had lost badly at previous annual meetings.
Lower prices for crude have cut into the oil giants’ profits. At the Exxon Mobil meeting in Dallas, CEO Rex Tillerson said the company is positioned to withstand ups and down in oil prices and give shareholders a good return on their money.
Tillerson has said that said that oil prices will remain low over the next two years because of large global supplies and weak economic growth.
The company is adjusting by cutting costs. Exxon has completed more than a dozen major projects in the past three years and expects an equal number to begin production through 2017. Exxon plans to cut capital spending as those projects are completed — from $38.5 billion last year to $34 billion this year and less in 2016 and 2017.
Shareholders rejected a proposal by an organization of Catholic priests in Milwaukee to put a climate-change expert on the board. The Exxon board opposed the resolution, saying several board members have engineering and scientific backgrounds and can handle climate issues, and it gained only 21 per cent support. The outcome was the same at the Chevron meeting.
Michael Crosby, sponsor of the resolution at the Exxon meeting, said the company is fixated on oil and gas and isn’t paying enough attention to renewable energy and climate change.
“This company has to be making plans for the future,” he said. “Let’s get an expert on the board to deal with a critical question.”
Others proposed that Exxon Mobil and Chevron set goals for reducing greenhouse gas emissions from its products, such as gasoline, but those got less than 10 per cent support. Vermont state treasurer Beth Pearce said institutional investors are growing more concerned about the topic, and Exxon management’s strategy for diversifying its production beyond oil and gas has been “wholly inadequate.”
Measures calling for reports on the impact of hydraulic-fracturing drew 25 per cent support at Exxon and 27 per cent at Chevron.
On climate change, Exxon CEO Tillerson said that models predicting the effects of global warming aren’t very good and that it would be very hard for the world to meet aggressive emission-reduction targets. He said technology can help deal with rising sea levels or changing weather patterns “that may or may not be induced by climate change.”
“Mankind has this enormous capacity to deal with adversity,” Tillerson said. “I know that is an unsatisfactory answer to a lot of people.”
Exxon Mobil and other oil companies have faced frequent proposals dealing with climate change and other environmental issues, and they are regularly defeated. In January, Royal Dutch Shell agreed to back a shareholder resolution requiring the company to commit to reduce emissions and invest in renewable energy.
Tillerson repeated his long-held view that renewable energy is not economical yet, adding, “We choose not to lose money on purpose.” Shareholders in the hall broke into applause.
Exxon earned $32.5 billion last year, down less than 1 per cent from 2013. However, oil prices fell by about half in late 2014, and Exxon’s profit in the first quarter of 2015 tumbled 46 per cent compared with the same period in 2014, although it still earned $4.9 billion.
Exxon Mobil shares fell 24 cents to $85.11 on Wednesday while Chevron shares lost 18 cents to close at $103.11.