Exxon Just Reminded Us Why Fossil Fuels Are on the Way Out

by Brian Johnson

November 18, 2016

The long-term future of the oil industry is in doubt, and not even Donald Trump’s administration can’t prevent the end of the fossil fuel era — as hard as we know they’ll try.

Keep It in the Ground

Photo by Eamon Ryan / 350.org.

Exxon has revealed that it will likely “de-book” nearly one-fifth of its oil and gas reserves by the end of this year.

In plain talk, that means that oil and gas that Exxon had once claimed could be extracted will soon be considered better left in the ground. The change comes from the fact that oil prices have remained low, making some reserves not worth the cost of extracting.

It’s a significant hit to the world’s largest publicly traded oil and gas company. And it’s part of a larger decline of the entire fossil fuel industry.

For one, a large portion of a fossil fuel company’s stock value is based on its reserves. Fewer reported reserves, and the overall value of a fossil fuel company will decline. Exxon’s stock value has already slipped from being number one overall in the United States to number six, while the overall stock value of the rest of fossil fuel industry has long been waning relative to other industries.

But Exxon de-booking would send an even larger signal about the decline of fossil fuels.

That’s because the vast majority of the reserves Exxon would de-book are from the Kearl oil sands in Canada — the same oil sands that fossil fuel companies had hoped to export through the failed Keystone XL pipelineThat matters because conventional sources of oil and gas are becoming harder to find, meaning that expensive types of fossil fuels like oil sands are becoming an increasingly important part of fossil fuel companies’ future reserves.

The problem isn’t just affecting Exxon. As Greenpeace reported in September, Shell and BP are also facing problems with their investments in oil sands. Forty-two of the two companies’ oil sands projects have been suspended, delayed, or cancelled since 2014.

What’s creating this trend? Activists like you.

You joined people around the world to call on the Obama administration to reject Keystone XL. You argued that the climate couldn’t handle more oil extraction, and that the rights of landowners mattered more than the money of big corporations.

You stopped Keystone XL, and it not only helped contain the world’s third-largest oil reserve, it’s challenging the long-term finances of the entire fossil fuel industry.

And while we will have to fight harder than ever to keep these wins like stopping Keystone XL in place under a Trump presidency, state-level leaders have decision power over pipelines, too.

Of course, prices for oil could go up again, which could allow Exxon to re-book the Kearl oil sands into its reserves. But even Exxon has predicted that oil prices will stay low for the next several years. And even if prices rise, the tide of people power by activists like you means more oil and gas will stay underground.

Which is why you should join the fight against another pipeline that would export unconventional fossil fuel reserves: the Dakota Access Pipeline.

First and foremost, the Dakota Access Pipeline fight is about Indigenous rights and sovereignty. But don’t underestimate how important it is to the future of the oil industry.

For months, the Standing Rock Sioux have been resisting the construction of a pipeline through their tribal land and waters that would carry oil from North Dakota’s fracking fields to Illinois. They’ve since been joined by thousands of allies in what’s become a defining movement against colonial violence.

And as with Keystone XL, stopping the Dakota Access Pipeline would not only be a big win for Indigenous leaders and climate activists like you, it would be a major blow to the future prospects of companies like Exxon.

Let’s let this be the beginning of a revolution against fossils fuels. Tell President Obama to #keepitintheground while he still has a chance.

Brian Johnson

By Brian Johnson

Brian is a campaigner with Greenpeace's Climate and Energy Team. Follow him @BFWJohnson.

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