ExxonMobil's Failure to Go Green Could Worsen Its Financial Future [View all]

[TexasTowelie]

In 1999, Enron CEO Jeff Skilling mocked ExxonMobil, the largest U.S. oil and gas company, calling it a “dinosaur.” Yet Exxon lumbered on, churning out steady profits, even after Enron collapsed in bankruptcy two years later and Skilling went to prison for fraud. But now, as the planet continues to heat up, COVID-19 has blasted into Exxon’s finances like some giant asteroid.

The energy industry is evolving, and large fossil fuel producers like Exxon must transform or get left behind. While its major rivals such as BP and Shell have invested in renewables, like wind and solar, or shifted to producing more natural gas, which emits less carbon, Exxon has insisted on staying the course even as investors and consumers increasingly turn away from dependence on oil.

Late last month, Exxon reported a third-quarter loss of $680 million. That’s a big number, but it’s actually an improvement from the record $1.1 billion loss it saw in the second quarter. So far this year, Exxon has lost a staggering $2.4 billion—the first time in the Irving-based company’s 138-year history that it’s reported three consecutive quarterly losses. In August, Exxon was ousted from the Dow Jones Industrial Average, America’s preeminent stock market index, after being a member for almost a century. One of the companies that replaced it was Salesforce, a cloud software company. Apple, with a market value of some $2 trillion, is now worth more than all the major oil companies combined.

Just seven years ago Exxon boasted the biggest market value of any company in the world and was heralded for its reliable returns and consistent financial performance. In 2020, until the post-election rally this week, it couldn’t even claim to be the most valuable energy company. NextEra, a Florida-based operator of wind farms and solar arrays had whizzed past it, although the two companies traded places again on Monday. Still, since 2018, Exxon’s market capitalization has fallen by about 60 percent, while NextEra’s shot up 98 percent.

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