I've always wondered about this. Presumably the people leading big oil companies are not dumb idiots; so why wouldn't they take this knowledge and prepare in advance? Exxon could be the leading global provider of renewable energy right now, set to dominate the industry for a century or more. But instead, they are a crumbling company leading a death march of society and their own bank accounts. Why? Why would a big company do this? Is it that really, honestly that hard for people in power to recognize that trying to prevent progress in their industry is exactly what will get them in trouble, lose them all of their money and potentially land them in jail? It seems crazy to me that Exxon didn't pivot their business model 40 years ago. If it was so obvious to them, why not try to own a new > $1T market for the 21st century?
For wealthy, older folks it makes more sense in terms of personal wealth to optimize for short term profits rather than go through the pain of pivoting and retooling the business in order to set it up for success down the road. So when the board and major investors ran the cost/benefit analysis of investing billions and undertaking the risk of shifting towards the renewables market vs. funding a few studies and paying off some scientists, they rationally chose the latter.
And they (whoever was making these decisions in the 1970's and 80's) were successful. They retired wealthy and those who are still around will not be held accountable today.
Edit: Also, shareholders would say this was and continues to be the right move. The company has a $350bn market cap today.
We do not have any semblance of an effective credit/tax system for pollution, global warming, and other such negative externalities. Until we (who? the UN? the WTO?) put a serious, economic price on pollution that shows up in the 10Ks, we can expect boards/investors to keep making the same choices.
That's the kind of "rationality" that would end up with the whole world in a smoldering pile of ruins.
if you're going to be around for thousands of years, the only way to avoid being held accountable for decisions like this is to not make them.
And it's mostly been scary for good reason. Just because an organization has the resources of an incumbent doesn't mean it has the skills required to successfully pivot the business. Kodak is truly a great example, for its corporate culture was notoriously hidebound after decades of reign over imaging. Even with today's hindsight, I suspect the cultural revolution required to adequately embrace digital imaging at Kodak would seem a nigh unimaginable task.
What are the best indicators that Exxon is a crumbling company?
I don't buy this idea one bit - but let's say I did agree. That would be the most damning evidence ever presented that capitalism is a direct path to extinction for society: your idea that the only legal path forward is to heat up the Earth as much as possible and drive the cause of a mass-extinction event. No thanks, let's not be capitalists then.
In reality I disagree - they would not have been sued by their shareholders, nor should they have been. Isn't it becoming clear that their business was built on lies? I believe their shareholders should sue them right now, for telling those lies.
> Oil is still going strong
Oh really? It doesn't look that way to me.
> Oh really? It doesn't look that way to me.
What are you looking at that indicates otherwise?
Global climate change is costing the world tens of trillions of dollars, and the cause of this huge burden is our use of oil. Oil is not going strong, it is causing global-scale mass extinctions and will cost first-world economies trillions and trillions of dollars in the coming decades.
> Global climate change is costing the world tens of trillions of dollars
It has certainly been speculated that if the ocean rises due to climate change, that will be very expensive, but I'm not aware of any current expenses of twenty trillion dollars or more that can be directly and convincingly linked to climate change. Since you seem very certain about it, though, perhaps you can provide some links?
But this is my point - no, we wouldn't still need loads of oil to continue our day-to-day lives, if these lies by Exxon had not been told. If we had spent the last 40 years going full-speed to develop alternatives then we would not have this problem you pose right now. Cars would be electric, battery factories would be commonplace, solar panels would be everywhere - and we would not be so dependent on oil.
They care about short term profit.
Ten years from now, any car maker that isn't building an EV will be considered insane. Ten years ago, it was Musk that was considered insane for wanting to sell an EV. It requires strong leadership, vision and commitment to move to the "new paradigm", even if that is "the future", which probably isn't very obvious at all at the time.
Look at solar panels, too. Same thing. Just 5 years ago they cost 4x more. You can see how people would consider you crazy for wanting to go into the solar panel business 5 or 10 years ago, when some of the leaders in the business now entered the market.
If you haven't read it already, I strongly suggest reading The Innovator's Dilemma. It will give you more insight into why this sort of stuff keeps happening:
What are the renewable energy focused companies in 2015 that are doing any revenue (let alone profit) that in any way matches what Exxon is doing today?
Nobody thinks the demand for oil is going to drop significantly in the next 15 years. So, Exxon has time and the cash hoard to buy whoever figures out how to make real money from renewables.
Coal companies on the other hand are in for a world of hurt.
Most companies(which are just peoole) doesn't start thinking too far in the future until the curves of those "next few years" point abruptly downwards.
Pretty much the only big companies operating in the manner you describe (constantly in and out of growth areas) would be Samsung and Siemens, I guess.
When the only tool you have is a hammer, everything looks like a nail.
When the only thing you care about is power, then the whole life becomes a power game.
"Progress? Pffft, that's for nerds."
There are no rational actors when it comes to money, it's all Wille zur Macht, with some at the top and most at the bottom. And "success" on this scale is only fanning the desire for more.
Human nature is pretty screwed up.