World’s richest oil family is dumping oil because of climate change


Well, this is rich…literally. The family of the legendary 19th Century titan John D. Rockefeller built its fortune across a sea of crude oil, just when the fossil fuel was starting to take over world markets in the mid-to-late 19th Century. By getting into the oil fields — first in Pennsylvania, then his home state of Ohio and eventually all over the world — before any of his rivals, Rockefeller built vast monopolies that including not just drilling and production but also refining and transportation, or what is known today as vertical integration.

In my book, Crude Justice, I wrote about how Rockefeller created the empire that first became Standard Oil and later became known as Exxon, now merged with a large rival to become ExxonMobil. Here’s an excerpt:

Rockefeller’s real talent was in creating a vast monopoly; he conspired with railroads and other shippers to win low prices for Standard Oil and to force rivals out of the market for petroleum products.  The exploitation of the original Pennsylvania oil field established the pattern of boom and pollution-laden bust that lasts to this day, as 19th Century writers spoke of foul-smelling oil creeks, how “mud, deep, and indescribably disgusting, covered all the main and by-roads in wet weather…” in devastated rural pockets of the Keystone State.

During the 20th Century, a dizzying series of anti-trust lawsuits and corporate mergers obscured the fact that Exxon, created by one of the bigger mergers in 1973, was the corporate heir to the dubious legacy of Rockefeller’s Standard Oil.  Along the Gulf, a company called Humble Oil, which was created in East Texas in 1911 in the afterglow of the famous Texas “gusher,“ Spindletop, had allied itself with the Rockefellers and a key Standard Oil affiliate, becoming the grandfather to Exxon. Humble was the company that placed the first off-shore rig off Louisiana in 1948, a pioneer in exploration that pulled up millions of barrels of oil in the Deep South, along with tons of radium-226.

It’s hard to find the right adjectives or turn of phrase to describe the sheer power of this global corporation, especially after it merged with one of its leading rivals to form the behemoth ExxonMobil in 1999. In 2012, with prices at the gas pump surging and American motorists addicted to their cars, ExxonMobil raked in nearly a billion dollars in pure profit a week, amounting to $41 billion for the entire year. In that same year, the Pulitzer Prize-winning journalist and author Steve Coll called ExxonMobil “a corporate state within the American state” and “one of the most powerful businesses ever produced by American capitalism.” It wasn’t just a matter of cash but also culture—intensively secretive, not afraid to butt into messy wars and conflicts overseas or to harass scientists who advance a theory of global warming that posed a threat to ExxonMobil’s long-time strategy of expanding the worldwide use of fossil fuel in perpetuity. Even some company insiders jokingly call the firm’s opulent, newish headquarters near Dallas “the Death Star.”

The failure to heed global warming research may be the worst indictment of Exxon Mobil and the legacy of its founder John D. Rockefeller. Currently, attorneys general in New York and California are investigating whether ExxonMobil deceived its investors by covering up the scientific facts about global warming and its connection to fossil-fuel use, and financing psuedo-scientific studies to fool the public. Apparently, the latest news was just too much for one group of large investors in the Big Oil icon — the heirs of John D. Rockefeller.

Descendants of John D. Rockefeller sold their Exxon Mobil Corp. stock and plan to dump all other fossil-fuel investments in the latest move against the industry that made their fortune.

The Rockefeller Family Fund concluded there’s “no sane rationale” for companies to explore for oil as governments contemplate cracking down on carbon emissions, according to a statement on the website of the New York-based philanthropic foundation Wednesday.

The fund singled out Exxon, the world’s biggest oil explorer by market value, for what it called “morally reprehensible conduct,” a reference to a series of articles last year by InsideClimate News that alleged the oil titan knew about global warming as far back as the 1970s and sought to hide what it knew from investors, policymakers and the public. The Rockefeller Family Fund and the Rockefeller Brothers Fund both are listed as financial backers of InsideClimate News on its website.

“It’s not surprising that they’re divesting from the company since they’re already funding a conspiracy against us,” Alan Jeffers, a spokesman for Irving, Texas-based Exxon, said in an e-mailed statement on Wednesday.

This is a little like the descendants of Henry Ford announcing from now on they will exclusively use mass transit, or the heirs to McDonald’s founder Ray Kroc swearing off red meat. At this same time, it is a searing indictment of the unethical practices of Big Oil, and also sends a powerful message on the importance of the climate change issue right now. The folks trusted with the legacy of John D. Rockefeller have seen the light on fossil fuels. What are our other policy makers waiting for?

Read more about the Rockefeller Family Fund selling its Exxon stock at Bloomberg News:

Learn more about the need for worldwide action on fossil fuels in my new book, Crude Justice: How I Fought Big Oil and Won, and What You Should Know About the New Environmental Attack on America

© Stuart H. Smith, LLC 2015 – All Rights Reserved

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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