May 17, 2006

Under Fire, Exxon Mobil Touts Environmental Record

By Deepa Babington

NEW YORK -- Exxon Mobil Corp. in a report said it cut oil and other spills by 20 percent last year to the lowest level in its history, touting its environmental record as it works to shake off its corporate villain image.

In a lengthy report released on Thursday detailing the company's efforts to support the environment and the communities it operates in, Exxon said it spent more than $3 billion last year on expenses related to the environment. About half of that was in the area of air quality, it said.

The world's largest public company also defended its stance on global warming in the report, saying it is responding to the issue by improving energy efficiency and cutting greenhouse gas emissions.

Exxon Mobil has been the favorite whipping boy among environmentalists and consumer activists ever since the Valdez oil spill in Alaska 17 years ago that left a trail of oil-drenched birds and a ruined coastline.

Exxon said in the report its marine affiliates had the lowest ever number of incidents releasing oil into the water -- with only one minor oil slick by a vessel operated by an affiliate and one by a leased vessel. Both incidents released less than 1 barrel of oil into the water.

Spills at its non-marine operations also touched their lowest level despite the spills associated with the hurricanes in the U.S. Gulf Coast last year.

The company continues to face a barrage of criticism for questioning the science behind global warming and choosing not to invest in cleaner energy sources such as wind and solar.

The report said it was committed to improving energy efficiency by 10 percent by 2012 and was working on reducing flaring at its operations as well as curbing other emissions into the air.


Its record $36 billion in profits last year as gasoline prices topped $3 a gallon have also prompted a fresh consumer backlash in the United States.

For many years, Exxon's former CEO Lee Raymond in particular attracted sharp criticism for his dismissal of alternative energy resources and little sympathy for global warming concerns.

But the company has tried to play up a more understanding and consumer-friendly image since new CEO Rex Tillerson took over the reins this year.

Tillerson in the past said his stance on global warming was not any different from that of his predecessor, but acknowledged that the company had done a poor job of articulating its work on the issue.

The Texas oilman recently even appeared on a popular U.S. morning show to address concerns over rising gasoline prices.

In the report, he noted the growing public interest in energy issues, particularly on the problem of new energy supplies to meet growing demand.

"This challenge became acute last year as higher oil prices, natural disasters, and geopolitical issues caused governments, consumers, investors, and the public greater concern about the supply and cost of energy, as well as the effect of its use on the environment," Tillerson wrote.

"We believe that industry can and should play an active and constructive role in the ongoing dialogue about our energy future."

There is plenty at stake for Exxon as it tries to drive home its message to consumers.

The company's record profits have sparked calls for special taxes on those profits and U.S. lawmakers are considering other punitive measures as consumer anger against Big Oil grows.