Shareholders ask the five largest US oil companies – Valero, Exxon Mobil, Marathon Petroleum, Phillips 66 and Chevron – to disclose the risks their operations and facilities face from rising sea levels and storm surges
[Published 26 Feb] Investors and nonprofits on Thursday asked the five largest US oil companies to disclose risks to their facilities from climate change.
In letters signed by Calvert Investments, Pax World Management, Walden Asset Management and other investors, as well as nonprofit advocates Ceres and the Union of Concerned Scientists, the groups express concern about “the lack of public disclosure of physical risks due to climate change”, such as from storms and flooding.
The letters are tied to a report, released by scientific advocacy group the Union of Concerned Scientists on Wednesday, that concluded that coastal refineries owned by each of the companies – Valero, Chevron, Exxon Mobil, Marathon Petroleum and Phillips 66 – are in danger of potentially costly disruptions due to rising sea levels and storms.
“To be clear, oil companies are going to suffer from climate change too, and they’re not doing enough to disclose that to investors,”
said UCS’s Gretchen Goldman, lead analyst at the Center for Science and Democracy and the author of the report.
“Refineries have low profit margins and are situated on vulnerable coastal locations. Any disruptions in refining operations could have material impact on companies’ cash flows.”
The US has 120 oil and gas facilities within 10 ft of the high-tide line, Goldman said.
According to the report, which used storm surge modeling and geospatial data to map risks of flooding at coastal refineries in low-lying areas, Valero’s Meraux refinery in Louisiana faces the starkest physical risk among the refineries studied.
Exxon Mobil CEO Rex Tillerson, Chevron CEO John Watson, ConocoPhillips CEO James Mulva, Shell president Marvin Odum and BP America president Lamar McKay are sworn-in to testify before a US House of Representatives subcommittee hearing on energy in 2010. (Image: Michael Reynolds/EPA)
With forecasts that sea levels in the Gulf of Mexico could rise 3-4 ft (about 1 meter) by the end of the century, parts of the refinery are likely to be inundated by 2050, Goldman said.
That’s not even including the risk from storms. Storm surges from hurricanes already have reached as high as 28 ft (8.5 meters).
“Even today, a category 3 storm could put the facility under water,” Goldman said.
The Meraux refinery, previously owned by Murphy Oil, suffered $330m in damages due to hurricane Katrina, noted Gabriel Thoumi, a senior sustainability analyst at Calvert Investments, which signed the letter to oil companies.
Read more: The Guardian