ExxonMobil Stays Precariously Above Water in Louisiana

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Source: http://read.bi/2bOjSBJ

A Flood of Floods
Baton Rouge, Louisiana, has been inundated for over a week. Flooding brought on by torrential rains has left at least thirteen people dead and caused damage to tens of thousands of homes and businesses – including the Exxon Mobil Corporation, one of many petrochemical companies with facilities in the area. The likelihood of this type of extreme weather event has long been predicted by climate scientists.

A study published this March by Nature Climate Change predicted increased flooding based on a climate-driven increase in extreme daily precipitation – in other words, changes not necessarily in the overall rainfall received in an area, but in the amount of rain that falls in any one rain event. The deluge dropped on Baton Rouge and surrounding areas last week is just one example.

In late July in Ellicott City, Maryland, a month’s worth of rain fell in a couple of hours, killing two people and causing extensive damage in the historic town. In the past few days, floods have claimed the lives of 40 or more people in India. West Virginia, South Carolina, Moscow, Manila, and other places around the country and around the world have experienced extraordinary flooding events in recent months, all consistent with what climate models have projected.

Climate scientists and other experts are noticing that floods and rainfalls that would be expected to occur once in 500 to 1,000 years are happening much more frequently due to the influence of anthropogenic climate change. The basic idea is not hard to understand: warmer oceans evaporate more quickly and warmer air holds more moisture; therefore, when precipitation occurs, there is the potential for a greater amount of rain to fall.

The 2014 National Climate Assessment described the particular risk posed to coastal areas – including the Gulf Coast – by “higher sea levels and storm surges, inland flooding, erosion, and other climate-related changes.” The Assessment expressed specific concern regarding energy infrastructure, as well as the disparate impacts on poorer versus wealthier communities.

The current floods exemplify the value and grim accuracy of climate science-based predictions. Even as poorer communities suffer the most when property is wrecked by floodwaters, the wealthy corporations – whose facilities call the “Petrochemical Corridor” between Baton Rouge and New Orleans home – also find themselves threatened. Companies are losing profits from decreased production, and their facilities are sustaining flood damage as waters rise around them.

ExxonMobil’s facilities in the area have had a turbulent time, and face a more turbulent future. But while sympathy is due to the company’s employees and others affected by the ongoing environmental degradation in the state of Louisiana, the company itself has, in part, itself to blame.

Evidence Up to Their Ears
CSPW recently reported on floods in Texas this April, and made particular note of the impact such events have on the infrastructure of the fossil fuel industry in general and on ExxonMobil in particular. The Baton Rouge area is home to one of ExxonMobil’s largest refineries as well as several other facilities. These facilities are feeling the effects of severe weather events that align well with our best climate models.

The entire coast of Louisiana is at risk due to climate change impacts, with land along the Gulf disappearing at a rate of over 20 square miles per year. The inland flooding forms a second front for a coastline already disappearing through sea-level rise and storm surges. A recent Bloomberg article describes the threat to the oil industry posed by Louisiana’s coastal vanishing act as a “$100 billion nightmare.” The receding coastline will leave hundreds of miles of pipeline exposed and thus vulnerable to leaks, and efforts to prevent this are costly. While oil companies contribute some money – including from BP’s multi-billion dollar Deepwater Horizon settlement – to attempt to preserve the coastline, lower oil prices and decreased production mean that ongoing contributions may dry up. Yet the state of Louisiana is hardly in a financial position to cover the shortfall.

A 2015 study estimated the economic harm related to the loss of Louisiana’s coastal real estate, including projections of storm and flooding damage. The predictions are dire, projecting potential costs of up to hundreds of billions of dollars in damages and lost revenue over the next fifty years. The people of Louisiana are facing an economic crisis to complement the environmental crises they have long been enduring.

ExxonMobil’s stance on climate change has been well documented: Exxon’s own scientists warned of the risk of global warming associated with GHG emissions beginning in the 1970s; by the late 1980s, Exxon leadership had made the decision to reject that science and deny the risks; and more recently, ExxonMobil’s CEO has claimed to accept the science, but disagrees that the threats posed by climate change warrant the costly transition away from a fossil fuel-based economy.

With floodwaters lapping at its facilities (such as those in Texas and Louisiana), projections showing that the Louisiana coastline is disappearing at an alarming rate, and every indication that severe weather events associated with climate change will continue to grow in intensity and frequency as global temperatures continue to rise, it is well past time for ExxonMobil to assume a strong leadership role in averting the global crisis that is being driven by fossil fuel consumption. Rather than fueling doubt, ExxonMobil’s executives should acknowledge that the real threat to their bottom line is not the cost of adapting to a clean-energy paradigm, but rather the much greater cost of allowing climate change to ravage its own facilities and the rest of the planet.

ExxonMobil is Its Own Charity
Over one-sixth of all US oil refining capacity is located in Louisiana – including the country’s fourth-largest refinery, owned by ExxonMobil. The company’s facilities in the area have been impacted by the flooding, but, because energy companies withhold specific details of their operations ostensibly out of security concerns, a jumble of limited information is available regarding what facilities are operating and at what capacity – and what role the flooding has played in the production slowdown.

Bloomberg Markets and Reuters reported that ExxonMobil has reduced its output during the flood emergency, and Todd Spitler, a spokesman for the oil company, said that “[c]ontrary to some reports, the ExxonMobil Baton Rouge Complex is operating,” and that, despite curtailed production, the company would “meet [its] contractual commitments.” Reuters then ran another story indicating that ExxonMobil’s production in Baton Rouge was running at 60%, with some facilities affected by the flooding and at least one already running at half capacity due to scheduled maintenance.

By choosing to locate large facilities in an area fraught with environmental peril, ExxonMobil has put itself in a complicated position as a perpetrator, denier, and victim of climate change. It is a strange sort of regression that the company has gone beyond denying the true threats associated with climate change and its significant influence in creating those threats, to now also denying its victim status – deliberately avoiding making any connection between intense weather patterns and the climate models that predict them.

This denial – rather than the anti-science “climate change denial machine” of which ExxonMobil is an integral part – is the reason New York Attorney General Eric Schneiderman and other state AGs are investigating the corporation. Fraudulently downplaying risks associated with climate change impacts shareholders’ stock value.

Furthermore, AG Schneiderman recently expressed concern that failing to acknowledge and accept that burning even a portion of all known oil reserves is a straight path to human extinction, and denying the extent to which these reserves must now be considered stranded assets, further lessens ExxonMobil’s real stock value.

If, as the AGs suspect, ExxonMobil is knowingly overstating its worth to shareholders, the company is engaging in “massive securities fraud.”

But Louisiana’s AG, Jeff Landry, is not a part of the pending lawsuit. The petrochemical industry remains a dominant force in Louisiana’s economy, and AG Landry holds a staunch pro-fossil-fuel stance.

In addition to Louisiana’s important location at the mouth of the Mississippi River, many corporations have taken advantage of the state’s favorable treatment of petrochemical companies, and its loose regulations. ExxonMobil has a decades-long history of generous tax rebates related to its Baton Rouge facilities, yet Louisiana has among the worst records of any state for chemical spills, accidents, and water and air pollution – including a fatal explosion on Christmas Eve of 1989 at Exxon’s Baton Rouge refinery, a fire at an Exxon Chemical plant in 1994, and a fire last December at that same Baton Rouge refinery.

In this context – and in consideration of the long-term impacts of human health and the environment that may be traced to chemical exposure in Louisiana – ExxonMobil’s recent half-million dollar donation to Louisiana disaster relief organizations, while certainly welcome by those (including ExxonMobil employees) suffering through the floods, hardly scratches the surface of what ExxonMobil’s presence has cost the state in terms of health impacts, environmental cleanup, and lost tax revenue. Balanced against its gift, ExxonMobil is still well in the black in Louisiana, once tax breaks and the externalized costs paid by the public are factored in.

Louisiana’s Difficult Path Forward
Between Hurricane Katrina in 2005 and the BP Deepwater Horizon Oil Spill in 2010, Louisiana has already seen more than enough tragedy in recent years. The frequency of environmental disasters in Louisiana has not made them less painful to endure, nor made recovery any easier. Indeed, a return to normalcy becomes increasingly difficult as natural and man-made infrastructure is battered, exposed, and eroded by each storm, spill, and flood.

Climate impacts are often discussed in terms of mitigation and adaptation, but neither provides a “solution” to Louisiana’s environmental concerns: no local mitigation of greenhouse gas emissions will instantly stop the climate from changing, and adaptation measures will not help the victims of this month’s floods. When the literal disappearance of usable real estate is a part of the problem, effective adaptation would require relocating whole buildings, neighborhoods, or even cities to higher ground. While adapting to the unavoidable impacts of climate change must take place and reduction of GHG emissions is necessary to limit the rate and impacts of rising global temperatures, the quick answers Louisiana needs are not forthcoming.

The economy of Louisiana has become dependent on petrochemical companies, but the long-term damage done by those companies makes them undesirable. Other important industries in the region – such as fishing and tourism – are negatively impacted by petrochemicals and their by-products. In addition to the broad, long-term impacts of climate change, an incident like the BP Deepwater Horizon disaster (read about GAP’s ongoing environmental/public health investigation into the disaster here) provides an acute example of the risks imposed on other industries by fossil fuels. Like adaptation, though, rearranging Louisiana’s economy to a more sustainable model will be a long and expensive process.

The best Louisiana can do in the short-term – beyond improving regulation of petrochemical companies within the state and working to diversify its economy and transition towards low-carbon energy – is to employ the best available preparedness tools.

Better flood prediction tools are being developed, which will more accurately determine when major downpours like those in Louisiana, Maryland, and elsewhere are likely to occur. NOAA’s new National Water Model, which forecasts flood and drought risks and other water resource matters using a supercomputer, actually came online just days too late to predict Baton Rouge’s woes. It will be interesting to see if ExxonMobil makes use of these tools, and how the company will justify its eely position on climate change while using climate models to protect its own assets.

None of this should suggest that Louisiana has not become better prepared for environmental disaster since Hurricane Katrina. In tandem with the federal government, Louisiana has an extensive and evolving preparedness plan in place.

But predicting events, preparing for them, and surviving them are three different things. As more rain falls in Louisiana this week, the water has no place to go; rivers, ponds, and bayous are already full, the ground already supersaturated. No supercomputer is needed to predict that a terrible situation could still get worse.

 

Environmental Counsel Adam Arnold worked with GAP’s clinical program while earning his J.D. from the University of the District of Columbia’s David A. Clarke School of Law, is a member of the Maryland Bar, and has an LL.M. in International Environmental Law and International Organizations from American University’s Washington College of Law.

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