Ostrich Behavior? April 2004
Ostriches do not really stick their heads in the sand. This biggest bird on Earth will, however, lie on the ground with its neck outstretched to avoid detection, a behavior that gave rise to the myth and countless cartoon images. Like so many animal myths, this one describes a behavior of humans. And there is no threat around which more humans have their heads in the sand than climate change. In fact, in the United States it almost seems as if our strange species is flashing its collective finger at the planet even as we ignore melting ice caps and rising oceans. Some companies, or the humans that populate them, assist this mass denial quite happily, since to do otherwise would force them and their investors to look beyond quarterly financial returns. You don’t even have to be especially vigilant to find examples if, of course, your head is not in the sand!
The most recent Consumer Reports (May 2004) informs us that Subaru has raised the bodies of its Outback sedans and wagons “about an inch” to certify the vehicles as light trucks, thus easing pressure on Subaru around its fleet’s fuel economy data. Daimler-Chrysler played the same game with its PT Cruiser by giving it easily removable rear seats to provide more cargo than passenger space. But those vehicles, whether classified as trucks or not, are comparative pussycats. The New York Times reported on April 2, 2004, that “Gas Guzzlers are Kings of the Road,” unlikely to give way to smaller cars in the foreseeable future – as average consumers (their heads firmly planted in sand) do not seem to think fuel economy or clean technology are important variables. They seem to believe that the collision advantage of heavy vehicles offsets the threat of devastation due to climate change.
Auto companies deny attempting to appeal to the baser aggressive instincts of consumers or fear of terrorism (another topic), but here’s a phrase pasted right out of the April 4, 2004, GM Canada web site: “A dirt-chomping, river-guzzling, cliff-conquering uber-vehicle, HUMMER H2 brings unsurpassed performance and power to any surface you care to defeat.” In a USA Today web story posted in February of 2003, a woman said “I need a car that no matter what happens in this town — earthquake, civil unrest, fire, flood — I can get through it, under it or over it” – in the H2. H2 is the civilian, scaled-down and upscale version of the first Hummer, a military vehicle that cost $120,000. In June of 2003, Tampa columnist Sandra Thompson quoted a Hummer ad by GM on the back cover of Wine Spectator: “Excessive. As in a Rome at the height of its power sort of way”. She then commented, “Guess they forgot what happened to Rome”. Relevant point. The H2 has a limited edition that comes in “Victory Red”.
I couldn’t find city fuel economy for the H2 on the Hummer web site but a web search turned up average mpg numbers of between 8 and 11. (The gross vehicle weight including cargo is 8600 pounds, according to Intellichoice.com, and the length is 189.8” or 15.8’ — longer than my living room is wide). I estimate that it costs about $64.00 to fill the Hummer’s 32-gallon tank at $2.00 per gallon. Happily, in my opinion, the Hummer had a bad last quarter with sales off 26% — it’s a car that’s fun to hate. But the classier Cadillac Escalade (sales rose 9%) weighs 7,000 pounds vs. only 6,400 (no passengers) for the Hummer, and costs $62.00 to fill its 31-gallon tank at $2.00 per gallon). Ford’s Excursion Limited 4X4 weighs 7,200 pounds and is 18.9’ long – over 3’ longer than my dining room! According to NewCars.com, “It’s a beast, however, taking up more garage space, parking space, and street space than anything else this side of a dually.” Auto companies fight regulations to improve fuel efficiency or emissions standards on these vehicles, claiming that the real answer to both emissions and energy independence is higher fuel prices, which would lead to lower Vehicle Miles Traveled (VMT).
So what about petroleum companies? Most U.S.–based companies lobby hard against a gasoline tax that might decrease the total volume of their sales – and the issue seems to have become an election year hot button. The debate over why oil prices are now high is complicated, with the OPEC countries claiming the real problem is arbitrage (remind you of California?), and just about everyone else pointing fingers at each other, but it’s very clear that with high crude prices more money is to be made by the whole petroleum industry. And the United States government still gives extraction companies huge tax breaks. The Joint Committee on Taxation estimates that this provision costs taxpayers $500 million per year. This break is likely to expand even as ExxonMobil’s income was $2,392,694 per hour (24/7) on $20.96 billion in net earnings available to the common shareholders last year, (per Reuters 4/02/04).
In response to shareholders asking for the company’s policy around global warming, ExxonMobil published a report that, in the words of CERES‘ Oil Analyst Andrew Logan, “sketches a compelling portrait of a company that stubbornly refuses to acknowledge or admit that its products contribute to climate change and that (the) risk is great that the world will respond by sharply curbing greenhouse gas emissions in the future. The report makes wildly optimistic assumptions which could not be taken seriously under normal business conditions, and refuses to recognize that Exxon’s business environment may be on the verge of rapid and dramatic change.” The February 2004 document, called “A Report on Energy Trends, Greenhouse Gas Emissions and Alternative Energy” states in its introduction, “We believe that only by relying on careful business analysis and by speaking with candor can we ensure, over the long run, a positive reputation for the company”. In fact, the report seems to deny the existence of climate change at all, conceding that there has been a “warming trend in global surface air temperatures during the 20th century, but the cause of this trend and whether it is abnormal remain in dispute”.
Yet even as Exxonmobil denies the existence of global warming, or at least global warming that could be called a dangerous development, they and other oil companies seeking to drill in northern Alaska are very familiar with the effects of this “warming trend”. In 1970, there were 213 days when northern Alaska was cold enough to operate oil-drilling machinery without damaging the tundra. According to the Alaska Department of Natural Resources, in 2002 there were only 106 sufficiently cold days. And another interesting piece of data comes from CBS Evening News on March 24, 2004. Ten years ago, a jury ordered Exxon to pay what now amounts to $6.5 billion for damage to the fishing industry. While many fishermen have gone bankrupt, the case remains tied up in appeals and Exxon hasn’t paid a penny. You can read about this in a recent piece posted on the CBS News web site.
ExxonMobil basically dismisses solar photovoltaic technologies as “unattractive investments” for the company. But the report ignores the fact that the solar industry has come a very long way toward competitive energy prices and is likely to move further with nano technology and other new innovations in manufacturing and design. “NanoSolar“, a start-up company in Palo Alto, is developing low-cost organic and nano solar cells. These promising technologies are aimed at narrowing the gap between the cost of solar power and energy from fossil fuels”, according to a solar industry newsletter, Powerlight. I was able to tour the NanoSolar lab about a month ago with Phil Angelides, the Treasurer of California and a group of interested people. It’s impressive. Denis Hayes cited some alarming statistics in his speech to the Social Investment Forum in October. “From 1992-2000 the U.S. solar industry grew at 16% a year, while Japan’s grew at 43% and Germany’s grew at 46% annually. The U.S. share of the global solar market has gone from 44% in 1996 to 27% in 2001.” Royal Dutch Shell, based in Europe, forecasts that renewable energy could meet half of all global energy demand by 2050 and is making investments to be part of that market. BP Solar is one of the world’s leading producers of photovoltaic solar cells with a 17% market share.
The U.S. leads the world in denial. Even ostriches wouldn’t dream of acting the way we do. U.S. consumers and the companies that sell to them are ignoring overwhelming evidence that the planet could be in serious trouble. In England, it would cost $155.68 to fill the “small” Hummer2 tank. The Bonn Climate Summit last year ratified the 1997 Kyoto protocol to reduce emissions of greenhouse gases, 162 to 1. The United States cast the dissenting vote. We do have it in our power to pull our heads out of the sand. The question is, will we do it?