Criticism of Chevron

Chevron Corporation has been one of the most widely-criticized companies in the world, generally stemming from its activities and their relation to climate change. Chevron's most widely-known scandal involves Texaco's activities in Ecuador's Lago Agrio oil field, which Chevron is deemed responsible for due to its acquisition of Texaco in 2001. Chevron has been most widely criticized for its handling of litigation against it filed by residents of the Lago Agrio region, which included the extensive persecution of Lago Agrio lawyer Steven Donziger, who spent 45 days in jail out of a 6 month sentence and 993 days under house arrest.

Climate change activists have also held an Anti Chevron Day since 2013, which is held on or around May 21 of every year to coincide with the general period of time that Chevron holds its annual meeting of shareholders.[1][2]

Lago Agrio activities

Texaco and Gulf Oil began operating in the Oriente region of Ecuador in 1964 as a consortium.[3] Texaco operated the Lago Agrio oil field from 1967 to 1992 and the Ecuador state oil company continued to operate the same oil fields after Texaco left. In 1993, Texaco was found responsible for dumping billions of gallons of toxic waste and they spent $40m cleaning up the area during the 1990s. In 1998, the Ecuadorean government signed an agreement with Texaco accepting the clean-up as complete and absolving Texaco of any further responsibility. That same year, an Ecuadorean scientific team took water and soil samples after Texaco left and found petroleum hydrocarbons at unsafe levels in almost half. The clean up was called "a sham" by critics.[4]

In 2003, a class action lawsuit against Chevron was filed in Ecuadorian court for $28 billion by indigenous residents, who accused Texaco of making residents ill and damaging forests and rivers by discharging 18 e9USgal of formation water into the Amazon rainforest without any environmental remediation.[5][6]

Oil spills in Angola

Chevron has been one of the largest offshore oil producers in Angola by volume.[29] Angola has a state-owned energy sector that partners with foreign corporations, including Chevron. Angola heavily relies on this foreign investment for economic growth.[30] These partnerships are part of bigger energy projects that have many incentives to use environmentally sound methods, and technology.[30] Despite this, Angola has experienced severe environmental problems from these projects, especially involving Chevron. A major Chevron oil spill occurred in 2002, which polluted beaches and contaminated the marine environment.[31] It also caused extensive harm to fishing in the region.[32] The cause of the spill was found to have been poor maintenance of pipelines.[31]

United States refineries

NiMH battery technology for automobiles

Cobasys LLC was a supplier of nickel–metal hydride (NiMH) batteries, battery control systems, and packaged solutions for automotive applications, uninterruptible power supplies, telecommunications applications, and distributed power generation.[53] For eight years ending in 2009, Cobasys was a 50–50 joint venture between California-based Chevron Corporation and Michigan-based Energy Conversion Devices, Inc. (also called ECD Ovonics, ECD, or Ovonics)[54][55] The intermediary hierarchy of ownership was that Cobasys LLC was owned by Chevron's subsidiary Chevron Technology Ventures LLC, and ECD Ovonics' subsidiary Ovonic Battery Company.[56] Cobasys spent $180 million in funding from Chevron Technology Ventures, and the two owners were unable to agree on further funding of the company. After arbitration between the owners had stalled, a buyer was found. On July 14, 2009, the sale of Cobasys to SB LiMotive Co. Ltd., an electric vehicle battery joint venture between Samsung SDI Co. Ltd.

Niger Delta shootings

On May 28, 1998, activists staged a demonstration and took several individuals hostage on a company oil platform in the Niger Delta, Nigeria. Nigerian police and soldiers were allegedly flown in with Chevron helicopters.[65] Soldiers shot at the activists and subsequently two activists (Jola Ogungbeje and Aroleka Irowaninu) died from their wounds.[65] In 2007 U.S. District Judge Susan Illston, allowed a lawsuit brought by victims and victims' families against Chevron to proceed, saying that there may be evidence that Chevron had hired, supervised, and/or provided transportation to Nigerian military forces known for their "general history of committing abuses."[66] In December 2008, a federal jury cleared Chevron of all charges brought against them in the case. Chevron had stated that the military intervention was necessary to protect the lives of its workers and considers the jury's decision vindication for the accusations of wrongdoing.[67]

UN sanctions

According to US Embassy Cable BAGHDAD 000791 the Iraqi prime minister believed that Chevron was engaged in negotiations to invest in Iran in contravention of UN sanctions. The embassy related that it had no independent confirmation of this claim.[68] This document was intended to have been kept secret until 2029.[69]

Unpaid royalties

In 1996, Chevron, along with other companies, was sued by Harrold Wright under the False Claim Act for falsely reducing earnings from natural gas extracted on federal and Indian leases since 1988 in order to reduce royalty payments. The lawsuit was settled a year after Wright died in 2008 by a payment of $45.5 million from Chevron. The payment also settled the lawsuit of Texaco and Unocal, which were bought by Chevron after the suit was filed.[70][71][72]

Oil spill off the coast of Rio de Janeiro in 2011

The Campos Basin in Brazil is an important offshore oil reserve, and has been the site of extensive oil exploration and extraction since 1968.[73][74] This region also has geographic traits that make it prone to oil spills.[73] These traits include intense atmospheric conditions such as cyclones, and high velocity currents.[73] Oil spills from drilling platforms in shallow water causes high impacts on marine life, including bioaccumulation.[73] Due to these spills, there studies that show polycyclic aromatic hydrocarbons contamination along the coast.[73] On November 8, 2011, Chevron came under fire by Brazilian authorities for its role in the spill of crude oil off of the southeastern coast of Brazil.[75]

KS Endeavor explosion

The KS Endeavor jackup rig exploded on January 16, 2012, while drilling an exploration well for Chevron in the Funiwa field in Nigeria. The explosion resulted in the death of two of the 154 workers on board and a fire that burned for 46 days before the well was sealed on June 18. According to a Reuters news report, workers on the KS Endeavor were ignored by Chevron when they requested evacuation due to concerns of increasing smoke billowing from the drilling borehole. A senior worker said the blowout was triggered by a massive build-up of pressure. A witness said that rig engineers advised Chevron to stop drilling and evacuate staff but Chevron told them to continue with drilling. Expecting an explosion, the rig manager, one of the two that later died, kept the lifeboats at hand and ready for use. A witness reported: "This is the reason so many of us survived because we were all aware that it was going to happen, but just didn't know when." In an email response to Reuters, Chevron said it did not receive requests to evacuate the rig and that staff on board had the right to call a halt to work if they believed conditions were unsafe.[81][82]

Polish gas exploration

Chevron has experienced protests aimed at the company by local communities in Southern Poland when they started gas exploration in the region. Their complaint is that Chevron did not provide all of the documents required for gas exploration in Poland, and that the company has not promised to share a percentage of the revenues with the local landholders. The landholders of the region view Chevron's presence in the region negatively since they may be forced to sell their properties at a low cost if gas is discovered in the region. As well, potential environmental disasters are a concern for local farmers. Another of the residents' primary concerns is water pollution from the chemicals used in fracking. In response to some of the protests, Chevron has sued some of the protesters from Żurawlów for disrupting their operations.[83]

According to gas and oil expert Andrzej Szczesniak, one of the main reasons for the protest is the difference between Polish and American law. In the USA property owners typically receive 15–20% from the income of gas exploration. In Poland, the discovery of gas on private property usually results in a forced sale of the property, with the owner receiving only the prior value of the land and no percentage of the gas revenue. This is the result of outdated, Communist Era laws that are still on the books and which are often exploited by municipal governments if they can get a 'kick back' from a larger company.[84][85]

Argentina agreement and protests

After the 2012 decision of the Argentine government to regain control of the biggest oil company of the country, YPF, the search for foreign investors for exploitation of unconventional oil started. Finally in 2013, YPF and Chevron signed an agreement for the Vaca Muerta oil field, the world's second-largest shale gas deposit. In August 2013, the Congress of Neuquén province approved the agreement, while between 5,000[86][87] and 10,000[88] workers, students and indigenous people protested outside the legislature. Police fired rubber bullets, hitting some protesters.[86] Governor Jorge Sapag defended the police actions: "The march was generally peaceful, but about 100 people separated from the rest and attacked the police. The police acted with seriousness and professionalism."[89]

Public Eye Lifetime Award

In 2015, Chevron received the Lifetime Award of the Public Eye on Davos for what the sponsors called Chevron's responsibility for environmental disaster in the Amazon.[90] The same group cited the company in 2006 in the category "Environment" for oil soiling in the Amazonas in Ecuador.[91] A Chevron spokesperson commented that the award was "nothing more than a stunt to distract attention from the fact that the lawsuit against Chevron in Ecuador has been proven to be meritless and the product of unprecedented fraud" and pointed to a U.S. court finding that the plaintiff's lawyers had committed "mail and wire fraud, money laundering, witness tampering and obstruction of justice."[92] That controversial RICO case is under appeal and has been criticized by environmental and human rights groups.[93]

Global warming and carbon footprint

In a letter Chevron Corp. argued that under current disclosure rules companies are already required to disclose material risks including climate-change risk, during part of the U.S. Securities and Exchange Commission's consultation process, noting that its "2015 Form 10-K included a significant discussion of the potential risks of additional greenhouse gas emissions regulation following the outcome of the Paris Accord."[94]

Chevron was found to have contributed 43.35bn tonnes of CO2 equivalent since 1965 in an analysis made by the Climate Accountability Institute.[95]

Chevron reported Total CO2e emissions (Direct + Indirect) for the twelve months ending December 31, 2020, at 58,000 Kt (-6,000 /-9.4% y-o-y).[96] In October 2021 the company adopted an aspirational net zero target by 2050 and pledged to cut the overall carbon intensity of its products by 5%, by 2028 including scope 3 emissions. A group of investors demanded from the company to cut emissions and said in response to the announcement: " Rather than a 5% reduction in Scope 3 intensity, absolute emissions need to come down by 40% by 2030 to have any chance of achieving the 2016 Paris Agreement"[99]

2023 stock buybacks

Chevron announced in late January 2023, amidst record profits and revenues for most large oil companies due to the 2022 Russian invasion of Ukraine, that the company would begin a $75 billion stock buyback program on April 1 with no set expiration date. The oil giant simultaneously announced it would raise its dividend by 6 percent, from $1.42 per share to $1.51 per share; both of these announcements rallied Chevron's stock price an additional 2 percent in after hours trading during the day.[103]

These announcements earned Chevron intense criticism from the Biden administration, with White House spokesperson Abdullah Hasan stating "For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it." The White House additionally reiterated calls for Chevron and other oil companies to use its earnings to increase oil supply and reduce costs for the American people.[104]

See also

• Criticism of ExxonMobil
• Lago Agrio oil field
• Steven Donziger