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If Exxon Can Outlast Environmentalist Pressures, It Can Win This Decade

Zoltan Ban profile picture
Zoltan Ban


  • While Exxon is not facing environmentalist pressures as severe as its European peers, such as Shell, it is not immune to it either, due to recent elections to its board.
  • Shell and others have a secondary reason for being more responsive to environmentalist pressures, namely dwindling upstream reserves, which are less of an issue for Exxon.
  • Exxon's response to environmentalist pressures is of a dual nature. One is addressing emissions from existing projects, second is to put a pause on new projects.
  • If Exxon can resist the pressure to shelve new projects and mostly focus on reducing emissions from existing projects, it can outperform most of its Western oil major peers this decade.

Activists Deliver Letter Supporting NY Attorney General"s Investigation into ExxonMobil

Spencer Platt/Getty Images News

Investment thesis: European oil majors tend to be the main subjects of debate when we discuss the effect that the green lobby may have on Western oil majors. The likes of Exxon (NYSE:XOM) are

This article was written by

Zoltan Ban profile picture
My name is Zoltan Ban,  I have a BA in economics. I am a personal investor with over a decade and a half of active trading experience.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (90)

For entities like “woke” pension funds which one is it?

You hate XOM or you own it and want it wrecked?

Why be there at all?

Go invest your billions in the only domestic solar panel company.


That’s negative returns.

Can’t have THAT!

XOM is wise to commit to a 30 year political goal of net zero.

It shuts up the woke fund and let’s investors get paid.

We went long XOM during “pandemic” and stayed for the tasty yield.

Price up what, 15% since 1 Jan?

CalPers sees that, too. Excellent hypocrisy.
@SNRoyer ..Outstanding.!! Calling out Calpers (which is one of the largest pension funds in California)...the money they are making.....lets keep it a secret so liberal Newsom doesnt go after the profits to fund his crazy ideas.

The woke investing will end after they pay 2x fees AND lose money.
PT Larry profile picture
Thanks for the article.
kamendc profile picture
Thank you for the thoughtful article Zoltan - I mostly agree, but do have the following comment. You stated several times that "North American upstream is already suffering from a lack of profitability compared with its international upstream operations, when looking at the capital spending to profits ratio." and put the numbers down in %s and $$$.
However, earnings/net profits already account for depletion, depreciation, and amortization of the capital invested, so I don't think it's appropriate to compare it like that.
If you look at operating cash flow or EBITDA, then OK.
cachinga profile picture
Any board member, of any company that I vote on board members gets a big fat "against" if they are associated with greenie or woke agendas.
Holger Investor profile picture
When even XOM spend cash, engineers hours, management attention on green religious nonsense it is time to have a close look on none western oil & gas company`s.

Has anyone a hint on a well managed non-western oil company?
In Cog Neato profile picture
@Holger Investor Satisfying the public via community relations and PR are just as important to a company as science, engineering, and production, to please its customers, its investors, and the politicians.
@Holger Investor
I personally like Rosneft, Lukoil. I like russian oil stocks because no europe / us regulations/ etc. I do not own them yet but plan to. I hate this green propaganda. I do love and own exxon, but green hype is disgusting. Not an investment advice- LOL
@Macgain - I know Lukoil from the beginning 1991 when they started their business in several former East European communist countries, especially in the petrol stations. They were extremely quick building up their business and did it better as the western oil companies. Only the Austrians were able to get the same level after about 4/5 years.
Holger Investor profile picture
The main challenge is that a majority of XOM shares is owned by institutional investors (investing other poeples money). Many of the managers of these investors live their green religion on cost of their clients rather than living themselve acc. to this believe...not flights, motor transportation, heating/ac, electricity or clothes produced in China with chinese coal.
cachinga profile picture
@Holger Investor These fund managers should not be voting for their clients. Did they ask for their input before voting their personal agendas?
Holger Investor profile picture
@cachinga In the past fund managers acted acc. to the business logic.

Now it is modern to press the company`s in favor of ESG (green communist ideology) targets. As institutional investors control perhaps 80% of the shares it is a risk that nobody put attention on in the past.

The main issue is that these managers act against the interests of their clients.
Chimneys spew smoke from wood and coal amid sub-zero temperatures in London, dreading 3 months of blustery wintry showers in Europe. Exxon, Shell et al will mount like eagles to disarm the two existential threats. Now parliament passed the NRF Act, Guyana can use its oil dollars to acquire part of PRC share on Stabroek to neutralise Dragon hegemony and control the 31 Riggers riven with racist envy. Instead of repatriation of colonial riff-raff, knighthoods subdue identity politicians as UK iconoclasts are cleared of criminal damage for statue stunts. Sacrilege of heritage escalates, fuelled by traitorous torchbearers of supremacy running amok in universities and historic towns to level down the Kingdom as refugees throw themselves on the mercy of the Monarchy. Epiphany today, celebrating Magi following a Star in the EAST, is dominated by an artist's impression of one, claimed as a king who looks like one minority from the SOUTH, manipulating myths with dIsinformation, ditching the message of seasonal goodwill. UN is silent as Security Council petrostates , refreshed by festive food , burnish weapons to whip the weak, murder the meek and persecute peacemakers, exploiting the plague distracting democracies and consuming resources. Happy New Year.
Holger Investor profile picture
@Blue Blood May I ask what is the message of your comment?
cachinga profile picture
@Holger Investor He's been to the local pub and stayed too long.
XOM is smart, they are playing along with the green kooks enough to keep the bolsheviks in DC off their backs until the bolshies get slaughtered 10 months from now. after or shortly before the next election, XOM's stock price will explode upward. also, the next board election will hopefully toss out the green kooks that fellow traveler larry fink planted there. buy it now, capture that 5.5% dividend, and light that cigar while humming "let's go brandon" on the porch watching the sun set for the rest of the decade while the stock price and dividends just keep increasing.
Zoltan - who or what are you? Just reviewed your long history of articles and comments. You are russian right? You are also fluent in Hungarian - you mentioned that at some point You tout the Russian commodity ETF RSX - check. You also tout and like Lukoil and GAsprom - check. Do you live in Moscow or somewhere else. Who pays you? What is your candid opinion of the rubes on this board you are working to influence?

And thank you for your comments
Zoltan Ban profile picture
@Mokajoka Thank you for your comment. I have nothing to do with Russia in terms of residency, business relations, linguistic abilities and so on. I took an interest in Russian assets a few years back, because I saw tightness in the global energy markets coming, while here in the Western World we are working hard to destroy our own energy companies, making those Russian assets even more valuable in the long term. I currently consider the geopolitical risks related to owning Russian stocks to be less than the risks I see when a court in the Netherlands orders Shell to cut emissions by 45% by 2030. If all you can muster for an argument is to suggest that the Russians are paying me to advance an idea, then I am sorry to say, but you need to do a lot better. Besides, why would the Russians want to pay me to point out the folly of us destroying our own energy companies? Why would they want to get in the way of that?
@Zoltan Ban I reread your February 2021 seeking alpha article “RSX:Sputnik V vaccine will forever change the value of “Made in Russia” brand” and my question to you is why do you constantly shill for Russia and why do you write all these articles in the quantities you do for seeking alpha anyway when you have no outside subscription service side hustle to sell?

Where are you from, what languages do you speak (you let slip on of them is Hungarian) and What’s the story with you anyway? you tout The exchange traded fund for Russia - RSX- but it is going down now because of Ukraine and the threat of western sanctions. so is this the time to buy RSX? ....Let me guess your answer...

I have no idea who or what might or might not be paying you to write all these pro Russian - western oil and gas critical articles - but if you don’t have a job now with Putin and company keep on auditioning here as a seeking alpha/ Instagram type “influencer” for Russia and maybe you can land one in the future with them or at least get some type of pension from the GRU. Hopefully it will be paid in euros or dollars and not in rubles

P.S. and yes, thank you for your comment as well - cause as Sony Bono once sang - “I got you babe”
One would think 100% of the US citizens support the green position. This is what happens when the liberals and MSM are in cahoots.

Wait until the uninformed greener continue to experience higher gas prices as well as significantly higher home heating and electricity costs.
Zoltan Ban profile picture
@nicholas__t01 Thank you for your comment. It will probably be blamed on not enough investment in wind & solar, as well as not enough EVs. That is what the MSM is doing with the EU energy crisis.
In Cog Neato profile picture
@nicholas__t01 The public is in favor of green transitions, except when it hits their bank accounts. Then reality sets in - food on the table and and shelter come first.
@In Cog Neato thank you for your reply. However, I disagree with you. I believe a small portion of the country is in favor of transitioning without exception but that the vast majority are of the mind that green initiatives have to stand on there own. Being force-fed climate crisis BS isn't cutting it.

Look at Europe where they are shutting down coal and nuclear power plants while their citizens are freezing their arses off and every shortages are increasing by the day. You call that "transitioning?" I call it pure hogwash.

It's all about control Neato... just like covid.
The green cultists have done a bang up job as they try to "combat" natural climate cycles and spend trillions to laughably attempt to change a fraction of a degree Celsius average temperatures. Much like when they try to save a species and kill off 2 others in the process.

Energy crisis, skyrocketing gas and electricity costs, calling it "sustainable" for propaganda purposes while shutting down all the plants and facilities that actually provide REAL sustainable and cheap energy for everyone (and needing to be bailed out later on by those same entities). Then jumping on social media to virtue signal about income inequality while they create more of it.

Everywhere these people have any power, the place turns into a third world cesspool, they flee their own mess, then go wreck the next place. Almost like a plague.
Solojif1 profile picture
XOM hold out the next decade? How about the next century. My kids, kids will still be using oil and the Elites will still be globe trotting in there private jets preaching to poor people in Africa why they should switch from elephant dung to “green renewables”.
In Cog Neato profile picture
@Solojif1 Maybe not. Better look at reserve life for the majors. Shell around 8 years, XOM, around 16 years. Others are similar. Oil may not last into the next century, although NG and NGL may be available a little longer.
ephud profile picture
@In Cog Neato

"Oil may not last into the next century"

There is a 200 year supply of recoverable oil in the Green River formation. Trillions of barrels. It's just currently off limits. Canada may have enormous reserves as well on Crown land. Off limits today. Tomorrow?
The greenies on the board are Gregory Goff, Kaisa Hietala, and Alexander Karsner, vote them out with the next election of the board.
@coinman507 amen. you shareholders out there, write those names down, put them on your fridge, and get rid of them.
@coinman507 Thanks for the guidance. Maybe we need to have some sort of campaign? When is the stockholders meeting?
"Stupid is as stupid does"...Green lobby will always be influential but stupid. Greens will create an energy crisis and it looks like EU will be the starting point of the crisis. INFLATION with JOB destroying ENERGY PRICES in EU. When will the silent majority react by voting out the GREEN PARTIES. Protests soon.
I think when all these "liberal green loving people," start to freeze their asses in the Northeast, or they cant find gas under $4.00 a gallon they will quickly realize there is no alternative to oil. For decades to come, oil is here to stay. Until then, lets continue to cut emissions the best we can, and continue to work on bio-fuels. Electric vehicles (only) will not fix this problem .
Old Professor profile picture
". . . [U]ntil we achieve a return to some basic common sense." One can only hope to witness this any time soon.
California teachers group is a communist organization and as such, Exxon should ignore their input or any input from groups trying to destroy the company. If they don't like oil and gas, they should sell their shares and move on to some greeny investment.
Very sneaky with the EU energy situation..."It involves industries shutting down as they find it impossible to operate under high energy input burdens like we are seeing in Europe."

Nevermind that fact that the situation is caused by fossil fuels, NG. When you have a situation that impacts the flow of trade, in this case a pandemic and LNG, then inventories run low and when trade resumes you have massive supply and demand imbalances causing huge price increases.

Now if they had more homegrown sources, wind and solar, then the situation would have been eased.
ephud profile picture

How would more idle wind turbines and dark solar panels solve anything?
Zoltan Ban profile picture
@martyr1777 Thank you for your comment. Actually, it was a large decline in wind power generation, and to a lesser extent a decline in hydropower that caused the massive hole in energy supply in 2021. The last report I saw, Germany's wind power generation declined 16% last year, with many countries seeing a similar trend. Scandinavia stopped exporting electricity because hydropower failed to materialize due to drought. So in fact, the failure of those homegrown sources to provide a steady supply is the main cause of the crisis. Weather-dependent sources are about as reliable as the weather it seems.
ephud profile picture
@Zoltan Ban

Surely these scenarios were modeled when doing capacity planning. Wouldn't a monte carlo simulation have shown them they were at grave risk. How was this missed?
Bim Ska La Bim profile picture
XOM bet stays as far as I'm concerned... Fully appreciate the need for more efficient less wasteful uses of energy, however, Exxon and similar companies will continue to generate billions for years to come. And with the last decade is rough as it was, it seems reasonable to either hold or consider adding once the market pulls back.

Greta T., hope you hear that... probably not, but ok... :0)
Don't give up on fossil fuels. Think of what the problems would be if all EV's were involved in the delays on I95 in Virginia.
TheOldHand profile picture
@springman38 Oh Geeze, that's a scary though.
@springman38 Well if Americans weren't so dependent on their cars in the first place you wouldn't have to worry about such things.

And yes I'm an American but I don't drive. Get a good laugh when I see people stuck in traffic from the train.
In Cog Neato profile picture
@martyr1777 And how does one get to the train? You drive and park in car park next to the station while you're at work.
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