Big-Oil CEO Faces His Failure by Keeping His Eyes Closed about Global Warming

Head of Oil Company that’s Most at Risk Of Declining Value: From Oil & Gas Is Burying His Head in the Tar-Sand About It



According to the landmark study of the impact that the rising world concerns about global warming will have destroying the market-value of oil company stocks, no large oil company is as vulnerable as Norway’s Statoil, but Statoil’s head says that he must drive his firm, and implicitly therefore Norway’s economic future, down the drain of this declining market-value. His response to the challenge, he says, must be to drive his corporate ship even straighter into the coming economic abyss for fossil-fuels firms.

He says:

«Many people want Statoil to invest in all types of renewable energy activities. Often with no concern for whether the company can achieve realistic profitability within a reasonable time span. It is an easy stand to take for people who are under no obligation to run a profitable business. But I know who will be blamed if Statoil decides to invest five billion Norwegian Kroner in something which is «in» today, but turns out to be a fiasco in five years’ time,»

The headline and sub-head of that article is: “Helge Lund uncertain about Statoil’s green future: It is not given that Statoil will become a green company.” It was published on 21 August 2010, in the Norwegian newspaper, Stavanger Aftenbladet.

The reporters at Aftenbladet  wrote: “He believes that one of the most important tasks for the years ahead is to reduce the cost of renewable energy.” But nothing indicates that his firm (the one firm that’s the most at-risk of a big global-warming market-value hit) should hotfoot the way into this “green” direction — switching away from investing in oil and gas, to investing instead in renewable energy. Exactly the contrary, in fact. Statoil’s President/CEO said:

«The question is: Are we the right company to handle these challenges? Or should we concentrate on our role as an oil and gas company and instead focus on CO 2 cleaning and the cleanest production possible?»

In other words: He wants to lead in improving fossil-fuels production, not lead in switching to greener types of energy-production and sales, which will be gaining from the switch away from fossil fuels — gaining from the transition that otherwise threatens to destroy his company, and the world.

Under his leadership of Statoil, “Statoil purchased the oil [tar-]sand area in Canada in 2007,” and he said in 2010 that he didn’t know back then “that the oil sand is dirty and emissions from production sky-high.” He somehow hadn’t yet figured that out, though it was common knowledge at the time.

His name is Helge Lund, he’s 52; and Statoil’s owners (two-thirds of which are Norway’s taxpayers) are paying him $13.8 million annual compensation, for this type of leadership. His taxable income in 2008 was reported to be £ 9,896,202, or around $16 million. His net worth (wealth) was reported then (in his 4th year as CEO) to be £ 17,759,081, or about $30 million.

The equalitarian Norwegian culture has objected to his high pay, but he justifies it by saying he’d make ten times as much in America. So, he thinks he should instead be getting $138 million per year. (It’s no wonder, then, why the CEO class love America, which pays them those bloated compensations while the U.S. is descending to third-world status.)

He was the foreign and security policy adviser to the Conservative Party (Norway’s equivalent of America’s Republican Party, or Britain’s Tories) during 1988-1990.

During the years since his 2010 interview in Aftenbladet, his views have not noticeably changed. On 25 August 2014, he gave a speech. His company posted it online, bannering, “‘A sustainable energy future’ – Helge Lund, CEO of Statoil, ONS 25 August 2014.”

He opened with a greeting: “Your Majesty, Prime Minister, Excellencies, distinguished guests, dear colleagues and friends in the oil and gas industry.”

He observed (and this is the google auto-translate version): “Our competitiveness is under pressure. For not so very long ago an oil price of $ 100 per barrel would have given reason to pop the champagne cork. [However,] now, there is reason for concern. During the last decade, oil prices almost tripled from around $40 to around $110 per barrel. But the increasing complexity and greater risk have led to increasing investments, cost increases and declining returns.”

Then, he noticed, from out of nowhere (as if Al Gore and others hadn’t been screaming about it for decades already): “Lately, the notion that we live in a ‘carbon bubble’ caught on. The logic here is that we have more carbons than we can afford to burn. So, if the international community is committed to solving the problem of climate change, those who invest in fossil fuels [are] being hit hard, as the cost of [to] investors or [else to] the environment, or both, are too high [to sustain the pay of himself and of people like himself]. But any meaningful analysis of how we are to meet the world’s energy needs, including those which require that we achieve climate goals, ends up with the conclusion that oil and gas make up a large part of the future energy mix.”

Oh, really? Yes, just plow ahead, that’s his conclusion.

And that’s about it. The head of the oil company that will plunge the most from the world’s growing recognition that global warming is real and is horrible, reluctantly acknowledges that his shoes are beginning to fit too tight. And he blames the public — the very people whom he and other oil-oligarchs have spent billions to keep in the dark on the subject – but he also spreads the blame to those other oil firms, his competitors.

“The current political climate is not helping to make this transition possible. That is why I will ask the industry to engage actively in dialogue about new policy. And that is why the message of the political leaders in the world when they gather next month at the UN climate summit in New York, is clear. We need a global carbon price.”

Finally, at least, that. But still, his company is pouring more money into exploring for more oil, that’s never going to be burned, because the planet already is starting to.

How large should this man’s annual pay-package actually be? He thinks he should be paid more.


Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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