Tag Archives: december

This Insider Trading Case Raises Troubling Questions About Trump’s Commerce Secretary Nominee

by wqds234der Posted on January 26, 2017

Mother Jones

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Wilbur Ross, Donald Trump’s pick for commerce secretary, is a legendary corporate raider who made billions of dollars buying failing companies and flipping them for a profit. But as he built his $2.5 billion fortune, Ross and his private equity firm, WL Ross & Co., have faced several lawsuits and regulatory actions accusing them of financial misconduct, including breach of fiduciary duty and fraud. His controversial business record received some scrutiny during his confirmation process. But one recent lawsuit involving Ross has garnered little attention. And it raises serious ethical questions about the business dealings of the billionaire who, if confirmed by the Senate, will be in charge of promoting job creation and economic growth.

The case, filed in a Florida federal court, involved a publicly traded mortgage company called Ocwen Financial. Ross served as a board member for the firm. In 2013 and 2014, state and federal regulators targeted the company over allegations that it engaged in a variety of improper practices. Ocwen’s stock plummeted, and shareholders suffered major losses. Its stock peaked in 2013 at about $56 per share, and the company is currently trading at about $5. But Ross managed to avoid millions in losses by off-loading his holdings in the company in two curiously timed trades that came shortly before damaging news was revealed that sent Ocwen shares into a tailspin. In the suit, shareholders accused Ross and other company directors of using inside information to enrich themselves and of leaving “ethics, integrity, and fair dealing by the wayside in their quest for ever higher revenues and thus, higher compensation and ever more lucrative incentives for themselves.”

The White House press office and Invesco (which is a corporate parent of WL Ross) did not respond to multiple requests for comment. Ocwen spokesman John Lovallo declined to respond to questions from Mother Jones, but he provided a statement about the company’s corporate governance practices. “Today, the composition, structure, experience and diversity of Ocwen’s Board, which consists of eight members, seven of whom are independent directors, is as strong as any comparable financial services company,” Lovallo wrote. “Ocwen is recognized as the industry leader in responsible home retention through foreclosure prevention.”

Ross’ ties to Ocwen date back to October 2012, when the Atlanta-based company announced plans to acquire mortgage-servicing firm Homeward Residential Holdings from WL Ross & Co. for $766 million in cash and preferred stock. Six months later, Ross joined Ocwen’s board.

The Homeward deal came during an Ocwen buying spree, as the company rapidly scooped up the mortgage-servicing units of big banks and other financial firms following the housing crisis. (Mortgage services are not lenders, but they collect loan payments and initiate foreclosure proceedings if homeowners default.) Ocwen’s business practices—including allegations that it had prematurely foreclosed on homeowners and mishandled loan modifications—placed the company on the radar of regulators, including the New York Department of Financial Services (NYDFS). The agency held up the Homeward sale until December 2012, when Ocwen agreed to two years of independent monitoring to ensure that “reforms are implemented and homeowners have a real chance to avoid foreclosure,” according to the agency’s head, Benjamin Lawsky.

In their lawsuit—a consolidated version of several previously initiated lawsuits was filed in federal court in March 2016—the Ocwen shareholders presented a timeline that they claimed supported their allegations. Through the sale of Homeward, Ross and his firm had received $162 million in Ocwen shares. In September 2013, Ross, on behalf of his private equity firm, sold more than 3.1 million Ocwen shares, at $50.19 a share, netting almost $158 million. Three months later, in December, the Consumer Financial Protection Bureau announced that Ocwen had agreed to pay $2.1 billion to settle charges of mortgage-servicing misconduct dating back to 2009, including hitting homeowners with unauthorized fees and deceiving consumers about foreclosure alternatives and loan modifications. As part of the settlement, Ocwen did not admit to or deny the CFPB’s allegations. Soon afterward, Ocwen’s stock had dropped to $44.14 per share, and it continued its downward slide from there.

The following year, WL Ross sold another large block of Ocwen stock. Once again, the sale came shortly before negative news was announced that sharply affected Ocwen’s stock. On July 14, 2014, WL Ross sold nearly 2 million Ocwen shares back to the company at about $37 a share, netting $72.1 million. On July 31, the company reported poor quarterly returns and within days its shares fell in value by more than 20 percent. Ocwen blamed its subpar earnings on the rising costs of complying with NYDFS’ required monitoring. On August 4, the NYDFS announced it was probing Ocwen for requiring homeowners to pay for “forced-placed insurance”—insurance that is taken out by the lender. By the end of December, Ocwen stock had sunk to about $15 per share. Due to the timing of his trade, Ross and his company avoided $18 million in losses. (The NYDFS investigation led to a broader December 2014 settlement, in which Ocwen agreed to pay a $150 million fine.)

Other Ocwen shareholders were not as lucky as Ross and his firm. Three Ocwen shareholders subsequently filed lawsuits against Ross and other company directors. The subsequently consolidated lawsuit alleged that Ross and two other members of the board of directors ignored “systemic and ongoing” wrongdoing by Ocwen. It claimed that the misconduct had ultimately cost the company more than $2 billion, and that Ross and his co-defendants “sold their personal holdings of Ocwen stock…while having knowledge of material, adverse inside information, in violation of state and federal law and in breach of their fiduciary duties to the Company.” And the suit charged that Ross, his firm, and its related funds “profited handsomely at the Company’s expense and thereby unjustly enriched themselves.” Ross, the suit maintained, was in a particular position to know about Ocwen’s mounting regulatory issues because he was not just a company director but a member of the board’s compliance committee.

Ross and fellow members of this committee had “total access to all documents and information bearing upon the Company’s operations,” the complaint alleged. And they were “personally aware or should have been aware that the Company was not in compliance with legal and regulatory requirements, including…applicable state and federal consumer protection laws and regulations and the multiple agreements and consent decrees made with Ocwen’s regulators, which were regularly breached by the company.”

Despite their knowledge of the company’s financial condition, mortgage-servicing misconduct, and ongoing regulatory actions, Ross and other company directors signed their names to a Securities and Exchange Commission filing in March 2014 affirming that Ocwen was successfully managing its regulatory obligations and reiterating the company’s “previously-announced financial results and financial positions,” according to the complaint.

Ocwen settled the suit in December on behalf of Ross and the other directors, agreeing to pay up to $2.2 million in attorney’s fees and other expenses and to institute a range of corporate governance reforms. As part of the settlement, Ross and the other defendants did not deny or acknowledge wrongdoing.

Lawrence Harris, one of the Securities and Exchange Commission’s chief economists during the George W. Bush administration and now a finance professor at the University of Southern California’s Marshall business school, said that because the Ocwen case was settled instead of going to trial, it is unclear what Ross knew at the time that he made his trades. “When confronted with the fortuitous timing of his sale, careful observers will certainly ask themselves whether Ross had knowledge as to what was going to happen,” Harris says. “If his knowledge was obtained through his insight, then he’s simply a disciplined investor. But if his knowledge was obtained through his position as director of the firm, of course there would be substantial concerns of the ethics of his subsequent sale.”

Harris says Ross’ combined history leaves lingering questions.

“If you had two otherwise identical candidates for commerce secretary, one has this record, the other one doesn’t, there’s no question that you would prefer the candidate who doesn’t have the record,” he says. “At some point you have to ask yourself, if you have a candidate with this type of record, who exactly are we dealing with?”

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This Insider Trading Case Raises Troubling Questions About Trump’s Commerce Secretary Nominee

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Home Buyers Are Paying a $600 Trump Tax on New Mortgages

by Chi7769ygegjc Posted on December 26, 2016

Mother Jones

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Matt Yglesias tweeted yesterday about mortgage interest rates going up after the election, and that got me curious about just how quickly they spiked upward after we all learned that Donald Trump would be our next president. The chart on the right shows the answer: pretty darn quickly.

On November 8, the average 30-year fixed mortgage was available at a rate of 3.53 percent. Within two days it had gone up 21 basis points, and within a week it had gone up 43 basis points. Adjustable mortgages spiked upward too, though not as dramatically, and both rates continued to drift upward until December 14. Then they spiked upward again thanks to the Fed’s decision to increase interest rates.

So what does this mean for your ordinary working-class joe who voted for Trump? Well, for a 30-year fixed mortgage on a $200,000 loan, the monthly payment has increased from about $900 to $950. That’s an extra $600 per year.

Generally speaking, this spike was due to the fact that everyone panicked after Trump won, causing treasury bond yields to jump 35 basis points in a week. More specifically, however, is it due to China selling US treasuries in greater quantities than usual? Maybe! But whatever the cause, if you waited until after the election to buy a house, you’re paying a pretty stiff Trump penalty.

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Home Buyers Are Paying a $600 Trump Tax on New Mortgages

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Signs of the Times

by KalaRincon29290 Posted on December 7, 2016

Mother Jones

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The view from the bottom:

The Los Angeles Unified School District has set up a hotline and opened “extended support sites” to respond to a high level of student anxiety about the election of Donald Trump as president.

And the view from the top:

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Signs of the Times

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The Paris climate accord is a big fucking deal, now more than ever

by StephanCCCG Posted on November 4, 2016

On Friday, the landmark Paris climate agreement officially goes into force. The news will surely be buried under a mudslide of U.S. election coverage, but it shouldn’t be. Paris was and still is a BFD.

Last December, world leaders reached what’s been called the first truly universal agreement on climate change, because the signers account for virtually all of the planet’s greenhouse gas emissions. More importantly, it marked the first time top polluters like China, India, and the U.S. found a way past old divides and down a shared path toward a low-carbon future.

Now that agreement is taking effect much earlier than expected. Often countries take not just months but years to ratify major international deals. It took eight years to activate the Kyoto Protocol. But the Paris Agreement was ratified by enough countries for it to become binding in less than 11 months.

China, India, the European Union, and dozens of other nations got the job done fast in part because they wanted Paris on the books before the U.S. presidential election — not because it will change Donald Trump’s mind about opposing the deal, but because it sends a clear message: The world is behind climate action. You better be, too.

The Chinese government has even taken the unusual step of saying that the next U.S. president needs to take Paris and climate policy seriously. “I believe a wise political leader should take policy stances that conform with global trends,” said China’s climate chief Xie Zhenhua. “If they resist this trend, I don’t think they’ll win the support of their people, and their country’s economic and social progress will also be affected.”

We’ll always ignore Paris.

Although the rest of the signatories to the Paris deal have been paying close attention to the United States, our politicians and media outlets have not been paying attention to Paris in return.

Just three days after the Paris Agreement was signed last December, CNN hosted a primary debate between Republican presidential contenders in which Wolf Blitzer neglected to ask anything about the climate deal (though Trump and John Kasich disparaged it without prodding).

That was just a taste of what would follow. In the three presidential debates and one vice presidential debate this fall, not a single question about climate change was asked (though Ken Bone did ask about energy and the environment).

Throughout both the primary campaigns and the general election, climate change has gotten little attention, and the Paris Agreement almost none. Did it matter whether candidates would work with our allies to make the 187-country deal a success or pull the legs from under it? Apparently, it didn’t.

But Americans need to know: Paris is huge.

It is a BFD that world leaders have agreed on ambitious goals: holding global warming to below 2 degrees C above pre-industrial levels, and ideally 1.5 C, which scientists say is needed to ward off the harshest impacts; peaking emissions as soon as possible and reaching carbon neutrality by 2050; spending hundreds of millions to help poor nations adapt and transition to climate change.

It is a BFD that countries once lukewarm on climate action have rallied around this agreement. Even a developing nation like India, which still needs to bring electricity to millions of citizens and help them out of poverty, is committing to a cleaner energy future.

It is a BFD that the U.S. and China found common ground in the lead-up to Paris and made the deal possible, forming a new bond around their shared efforts to fight the biggest threat facing humanity.

It is a BFD that the world’s nations have committed to remaking the entire global energy system. Rich nations are basically asking (and helping) developing countries to do something no developed country managed: Leapfrog coal, oil, and gas in favor of renewable energy. It’s no coincidence the oil industry is suddenly mindful of renewables again.

Yes, Paris is imperfect.

Of course, Paris has a lot of flaws and shortcomings, and as the world works to implement it, many what-ifs and hazards lie ahead. The most important components — emissions cuts and finance — aren’t legally binding, so the carefully negotiated deal could be eroded by political shifts. Brexit could make it more difficult for the E.U. to meet its promises. The Philippines is waffling on whether it will formally join the agreement, even though it signed on last December. And, yes, the U.S. election could send the whole process reeling.

Since the agreement is largely non-binding, it’s critical that the review process be as transparent as possible, because international peer pressure is essential to ensuring countries don’t miss the mark. For exactly that reason, countries don’t have a particular incentive to be transparent — which is one of Paris’ main challenges going forward.

Even if everything goes as planned and nations follow through on their first-round commitments, that alone won’t be enough to fend off the worst impacts of climate change. Countries will need to keep setting and meeting tougher goals, which will get increasingly difficult and expensive.

Nevertheless, the Paris Agreement is an essential, powerful start to what will be a long, fraught process.

The endless drama of climate change (not to mention international negotiations) is, let’s be honest, less sensational than the drama of the election. Slow, incremental change is a tough thing to fathom, much less to get excited about. The latest poll, the latest insult, and the latest email leak are easier to grasp and more fun to follow.

Even if it’s not as entertaining as a political campaign, what really counts is moving the clean-energy transition along as fast and seamlessly as possible. The Paris deal that comes into force today is helping the world do exactly that. That’s big, and that matters.

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The Paris climate accord is a big fucking deal, now more than ever

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Watch: What It’s Like to Become a Guard at a Private Prison

by JadaWentworth49 Posted on June 25, 2016

Mother Jones

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In December 2014, Mother Jones senior reporter Shane Bauer started a job as a corrections officer at a Louisiana prison run by the Corrections Corporation of America (CCA), the country’s second-largest private prison company. During his four months on the job, Bauer would witness stabbings, an escape, lockdowns, and an intervention by the state Department of Corrections as the company struggled to maintain control. Read Bauer’s gripping firsthand account here.

Bauer’s investigation is also the subject of a six-part video series produced by Mother Jones senior digital editor James West. In the first episode, Bauer gets a job with CCA and begins four weeks of training at Winn Correctional Center, which one former guard describes as “hell in a can.” Bauer also explores why a dangerous job that pays $9 an hour is attractive in an area with few employment options.

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Watch: What It’s Like to Become a Guard at a Private Prison

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California Might Close Its Last Nuclear Plant

by RolandLohman Posted on June 21, 2016

Mother Jones

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California’s biggest electric utility announced a plan on Tuesday to shut down the state’s last remaining nuclear power plant within the next decade. The plant, Diablo Canyon, has been controversial for decades and resurfaced in the news over the last few months as Pacific Gas & Electric approached a deadline to renew, or not, the plant’s operating license.

“California’s new energy policies will significantly reduce the need for Diablo Canyon’s electricity output,” PG&E said in a statement, pointing to the state’s massive gains in energy efficiency and renewable energy from solar and wind.

The most significant part of the plan is that it promises to replace Diablo Canyon with a “cost-effective, greenhouse gas free portfolio of energy efficiency, renewables and energy storage.” As I reported in February, some environmentalists were concerned that closing the plant could actually increase the state’s carbon footprint, if it were replaced by natural gas plants, as has happened elsewhere in the country when nuclear plants were shut down:

As the global campaign against climate change has gathered steam in recent years, old controversies surrounding nuclear energy have been re-ignited. For all their supposed faults—radioactive waste, links to the Cold War arms race, the specter of a catastrophic meltdown—nuclear plants have the benefit of producing huge amounts of electricity with zero greenhouse gas emissions…

A recent analysis by the International Energy Agency found that in order for the world to meet the global warming limit enshrined in the Paris climate agreement in December, nuclear’s share of global energy production will need to grow from around 11 percent in 2013 to 16 percent by 2030. (The share from coal, meanwhile, needs to shrink from 41 percent to 19 percent, and wind needs to grow from 3 percent to 11 percent.)

Michael Shellenberger, a leading voice in California’s pro-nuclear movement, estimated in February that closing Diablo Canyon “would not only shave off one-fifth of the state’s zero-carbon energy, but potentially increase the state’s emissions by an amount equivalent to putting 2 million cars on the road per year.” But that estimate presupposed that the plant would be replaced by natural gas. The plan announced today—assuming it’s actually feasible—appears to remedy that concern.

In any case, the plant won’t be closing overnight. Over the next few years we should be able to watch an interesting case testing whether it’s possible to take nuclear power offline without worsening climate change.

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California Might Close Its Last Nuclear Plant

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Lindsey Graham Seems to Have Forgotten How Much He Hates Donald Trump

by RichardWieck11 Posted on May 23, 2016

Mother Jones

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Sen. Lindsey Graham (R-S.C.) reportedly spent the weekend urging big-money Republican donors to support presumptive nominee Donald Trump. It’s a pretty shocking turnaround for a guy who was once the loudest—and sometimes only—critic of Trump in the GOP presidential field.

Before caving in to Trump’s now-inevitable victory in the GOP primaries, Graham insulted Trump, apologized to Muslims for him, called for him to be kicked out of the GOP, and endorsed two of his rivals in last-ditch attempts to block Trump from being nominated. Here’s a reminder of Graham’s greatest anti-Trump hits.

While still a candidate, Graham was essentially the only member of the GOP field to go hard at Trump from the start. He started way back on July 20 by calling Trump a “jackass” for insulting his BFF Sen. John McCain (R-Ariz.), a former POW, for getting captured after his fighter-bomber was shot down over North Vietnam in 1967.

On December 8, Graham delivered some advice for his party on CNN: “You know how you make America great again? Tell Donald Trump to go to hell.” Graham attacked Trump’s proposal to ban Muslims from coming to the United States in particular. “He’s a race-baiting, xenophobic, religious bigot” and “the ISIL man of the year” for stirring hatred against Muslims, Graham said.

During the December 15 Republican undercard debate, Graham even apologized to Muslims for Trump’s Islamophobic comments. “To all of our Muslim friends throughout the world…I am sorry,” he said. “He does not represent us.”

Graham’s finest performance probably came on February 25, when he went nuclear on Trump while talking to reporters at the Capitol. “I think he’s going to lose and he’s going to lose badly,” he said. “You can’t nominate a nut job.” He also called Trump “just generally a loser as a person and a candidate.” Despite all that, Graham foreshadowed his pro-Trump turn, saying he’d work for the eventual GOP candidate even if it ended up being Trump.

On March 7, Graham said Trump should have been kicked out of the Republican Party over his anti-immigrant comments. “He took our problems in 2012 with Hispanics and made them far worse by espousing forced deportation,” Graham said during a CNN interview. “Looking back, we should have basically kicked him out of the party…The more you know about Donald Trump, the less likely you are to vote for him.”

On March 24, Graham told The Daily Show’s Trevor Noah, a mixed-race man from South Africa, that he might have to flee the country if Trump were elected. “If Trump wins, your days are numbered, pal,” he said during an appearance on the show. “A young, black, liberal guy from Africa is not going to work with him.” By this point, Graham had grudgingly endorsed Ted Cruz—after first throwing his backing to Jeb Bush—and literally could not stop himself from laughing at the thought of backing the Texas senator, whom he disliked so much he joked Cruz could be shot on the Senate floor without anyone trying to help. “It tells you everything you need to know about Donald Trump,” he said in between giggling fits.

On May 6, with Trump fully in command of the GOP race, Graham said he still wouldn’t cast a vote for Trump. “I…cannot in good conscience support Donald Trump because I do not believe he is a reliable Republican conservative nor has he displayed the judgment and temperament to serve as commander in chief,” Graham said in a statement.

During a speech just two weeks ago, on May 11, Graham said “Crooked Hillary’s going to beat Crazy Donald. If he’s new and different, I think he could win. New and different is different from being crazy.” That may have been his final jab: the Washington Post reported the next day that the two men spoke on the phone and agreed to stop trading insults. “He obviously can take a punch,” Graham said, having thrown more of them than perhaps any other politician from either party.

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Lindsey Graham Seems to Have Forgotten How Much He Hates Donald Trump

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The bison is back and better than ever

by CathyHenson Posted on April 26, 2016

The bison is back and better than ever

By on Apr 26, 2016Share

Congratulations to the lumbering, humbling bison. It’s set to become America’s new national mammal.

On Tuesday, the House of Representatives passed the National Bison Legacy Act, the rare truly bipartisan bill that’s earned endorsements from Native Americans, conservationists, and ranchers. Since the Senate passed the bill in December, it only takes President Barack Obama’s signature to become official.

The bill launches the 10,000-year-old species to a distinction only held by the bald eagle. It’s a big upgrade for an animal that was once nearly hunted to extinction, but has recovered to a population of about 500,000 in North America.

Despite all this attention, it doesn’t mean that bison are getting special treatment. On the contrary, national designation won’t keep them from being used for food, so the mighty animal will still face hordes of jerky-hungry hipsters.

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The bison is back and better than ever

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Deadly mining blast gets coal exec Don Blankenship a maximum prison sentence: One year

by LoriRea327034841 Posted on April 6, 2016

Former Massey Energy Chief Executive Don Blankenship smiles outside the Robert C. Byrd U.S. Courthouse just moments after the verdict was handed down to him in Charleston, West Virginia December 3, 2015. REUTERS/Chris Tilley – RTX1X2SN

Deadly mining blast gets coal exec Don Blankenship a maximum prison sentence: One year

By on 6 Apr 2016 3:17 pmcommentsShare

Six years and one day after an explosion in Massey Energy’s Upper Big Branch (UBB) mine killed 29 coal workers, a federal judge in West Virginia handed the company’s former Chief Executive Officer Donald Blankenship the maximum sentence for conspiracy to commit federal safety violations: one year in prison.

At Wednesday’s sentencing in Charleston, Blankenship received an additional year of supervised release and a quarter-million dollar fine. While families of UBB victims were not permitted to speak in the courtroom during sentencing, Blankenship did. “My main point is wanting to express sorrow to the families and everyone for what happened,” Blankenship told to the court, adding the qualification to his apology, “I am not guilty of a crime.” Betty Harrah, the sister of a victim of the explosion, told a local TV station on Wednesday the disaster delivered “a lifetime sentencing” to victim’s families who “didn’t do anything wrong.”

The UBB explosion was the deadliest U.S. mining accident in four decades, and prompted a federal investigation into the coal giant’s safety practices. The investigation eventually led the Justice Department to the top of Massey’s chain of command: to Blankenship, who federal prosecutors accused last fall of creating “an unspoken conspiracy that company employees were to ignore safety standards and practices if they threatened profits,” according to The New York Times. As Mother Jones’ Tim Murphy reported in November, UBB averaged one safety violation per day; miners worked in hazardous conditions, like floods and collapsing ceilings; the company used secret codes and radios to foil federal inspectors; and Blankenship himself sent out threatening messages to managers who were concerned about safety.

Blankenship — a native of coal country who enjoyed a 18-year reign as CEO of Massey — was charged with the misdemeanor in December. It was considered a landmark in a region where King Coal has ruled for more than a century. The U.S. attorneys, reports the Times, “said it was the first time such a high-ranking corporate executive had been found guilty of a workplace safety crime.” Nonetheless, Blankenship’s jury of peers cleared him of three felony charges that could’ve put him away for 30 years instead of one.

For many, 30 years would’ve sat a lot better:

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Shell worries about climate change, but decides to continue making it worse

by JolieSearcy3815 Posted on March 14, 2016

Shell worries about climate change, but decides to continue making it worse

By on 14 Mar 2016commentsShare

Shell Oil released its 2015 annual review last week, and the most surprising thing in it may be how concerned the company is with climate change. It’s hardly what you’d expect from Big Oil, and yet the words “climate change” occur 15 times in the 228 page report. While this may seem minor, it’s a hell of a lot more than climate change is discussed by most other oil monsters (Looking at you, Exxon). Shell, unlike many oil giants, actively acknowledges and even embraces climate action — at least, on paper. “It was encouraging to see governments reach a global climate agreement in Paris in December,” the report reads. “The agreement should now encourage countries to develop policies that balance environmental concerns with enabling a decent quality of life for more people.”

Sounds great, right? But before you get too excited about the prospect of Shell transitioning to a solar company, they go ahead and ruin it: “We know that understanding the world’s future energy needs will help us improve our competitiveness. We have evolved over the last few decades from a company focused almost entirely on oil to one of the world’s leading suppliers of gas, the cleanest-burning hydrocarbon.”

While that may be true that gas is the “cleanest-burning hydrocarbon,” it’s still a hydrocarbon. That means, it still contributes to sea level rise, worsening storms, refugee crises, overseas war, epic drought, and more. Not only that, our means of extracting natural gas — fracking — is linked to cancer, earthquakes, and contaminated groundwater. A Pennsylvania company was just ordered to pay $4.2 million in damages to two families for contaminating their well through fracking. Yes, this is the business Shell wants to be in.

And it makes sense for them to acknowledge climate change, at least financially. As DesmogUK points out, “Last May, the oil company’s shareholders voted unanimously in favour of a resolution that forced Shell to consider the possibility of a 2C world in its forecasting. Until that time Shell had been using a 4C to 6C global warming scenario to guide future business operations (twice the level of warming considered safe for the planet).” Besides, the price of oil is at record lows, and Shell lost $7 billion in a failed attempt to find oil in Alaska’s Chukchi Sea the past few years — a move that has reportedly forced the coming retirement of CEO Marvin Odum, a Shell employee for over 30 years. In a recent Washington Post interview (which you should read in its entirety), Odum said:

“Through geology and seismic surveys, we had reduced the risk to where the only way to reduce it more was to put down a well,” Odum said, adding that Shell put it “where we thought there was the highest prospect” of a discovery. If they had been correct, Odum said, the reward could have been fields as rich in oil as the Gulf of Mexico, which produces 1.6 million barrels a day worth $22 billion a year, even at today’s depressed prices.

“The size of the prize was always big enough to take that next step and find out for sure,” he said.

While Shell’s decision to pull out of the Arctic was widely heralded by environmental groups, it probably had less to do with bad press created by protests than it did the bottom line. That’s the thing about oil companies: Some, like Exxon, are actively destructive, and some, like Shell, may be in denial. But we’ve yet to find an oil company that’s substantially different.

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Shell worries about climate change, but decides to continue making it worse

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