‘Stockbroker’s Bible’ Just Told Oil Industry To Accept Its Demise

The editorial board of the Financial Times isn’t exactly stacked with bleeding-hearted environmentalists. Just a month ago, the British paper defended ExxonMobil’s right to question climate change amid legal probes into whether the oil giant covered up evidence of global warming.

But in an editorial published Saturday, the FT urged the oil industry to “face a future of slow and steady decline.”

“Instead of railing against climate policies, or paying them lip-service while quietly defying them with investment decisions, the oil companies will serve their investors and society better if they accept the limits they face, and embrace a future of long-term decline,” the editorial board wrote.

The board criticized U.S. goliaths like Exxon and Chevron for denying the role fossil fuel emissions have in increasing global temperatures and changing longstanding climate patterns. At Exxon’s shareholder meeting on Wednesday, investors rejected all but one proposal to increase transparency about the risks of climate change to its business. Last year, shareholders of BP, Royal Dutch Shell and the Norwegian state-owned Statoil all voted, nearly unanimously, in favor of similar resolutions.

“In their public presentation, at least, the European groups including Shell and Total are more willing to face up to the threat of climate change than their US rivals,” the board wrote. “While accepting the conclusions of climate science, Exxon and Chevron stress the importance of energy security and affordability over reducing emissions.”

The tone of the editorial shows a marked departure from that of one of the FT’s chief rivals, The Wall Street Journal. Last December, the Rupert Murdoch-owned daily — the biggest U.S. newspaper by circulation — lambasted the historic climate treaty reached in Paris.

“Forgive us for looking through the legacy of smoke, but if climate change really does imperil the Earth, and we doubt it does, nothing coming out of a gaggle of governments and the United Nations will save it,” the Journal’s editorial board wrote.

Traditionally, newspapers keep editorial boards and opinion sections separate from news coverage, for fear of tainting the perception of reporters’ objectivity. But the Journal’s climate skepticism — perhaps inherited in part from its owner, whose ideology bleeds through most aggressively at the Fox News Channel he owns — seems to have affected news coverage.

A study published last August by researchers at Rutgers University, the University of Michigan and the University of Oslo found that — between 2006 to 2011 — the Journal’s news reporting rarely mentioned the threats or effects of climate change, compared to the country’s other leading broadsheet newspapers.

The economics of pandering to wealthy oil and gas advertisers or fearmongers who shrug off climate science as conspiracy may still make sense for some. But the economics of denying the financial risks posed by climate change just don’t make sense, at least according to the FT.

“Rather than investing in potentially stranded oil and gas projects, or gambling on new technologies that they do not fully understand, the oil companies would do better to continue returning money to shareholders through dividends and share buybacks,” the paper wrote.

Coming from a publication known as the “stockbroker’s bible,” that should come as sobering wake-up call.