ExxonMobil and Green Energy...

Are major oil companies investing in green? Some of them are. Should they? That is hotly debated!

Some of the world's largest oil companies are ExxonMobil, ChevronTexaco, ConocoPhillips and BP. These oil companies control some of the most lucrative drilling rights in the world and have the profits to invest in virtually anything that they see fit. With all the oil companies recording record profits, the government has called the executives to testify on Capital Hill about why prices are so high. Transcript from CNN.com

The government is urging the oil companies to produce more fuel, lower costs (even thought the investment markets set prices by purchasing energy futures) and invest in alternative fuels. While most of the oil companies are investing in alternative energy sources and striving to clean up the way that they extract and refine fossil fuels, there is one company that says that investing in such alternatives in not for them. ExxonMobil!

(Disclaimer: I am a shareholder of ExxonMobil and do not have a bias against them.)

In a recent article in Fortune magazine, Rex Tillerson, Chairman and CEO of ExxonMobil, sat down with Geoff Colvin, Fortune senior editor-at-large, to discuss alternative fuels and ExxonMobil.

Tillerson explains that ExxonMobil is in the business to earn a return on its' shareholders investments first and foremost. (Isn't that why businesses exist?) If they do not believe that an investment can make the proper return that the company believes is adequate, it just won't invest in it. "What are we going to bring to this area to create value for our shareholders that's differentiating?" asks Tillerson. "Because to just go in and invest like everybody else - well, why would a shareholder want to own Exxon Mobil?" (Fortune, source is linked) They have been around so long and have rights to some of the oldest and richest oil reserves, they can pump oil for less than $1 a barrel. To harness alternative fuels, it would cost significantly more and they would not be able to invest new technology to the harnessing and refining of such energy that would create value.

They are a leader in technology and innovation for fossil fuels and can arguably produce oil for cheaper than another company pumping from the same well. Gheit, who worked for Mobil long before the companies merged, recalls being mystified by Exxon's X factor. "We [Mobil] could be pumping oil from the same platform, and they'd make more money on it than us," he says. "It was like taking the same train to work, but they got to the office first." (Fortune, source is linked)

While activist and environmental groups oppose ExxonMobil and the government is trying to keep their nose in things, ExxonMobil pays outside scientists and groups to justify their reasoning on alternative energy sources. ExxonMobil contends that alternative energy sources will never be large enough for the world's most valuable company (based on market value) to be investing in. Their payments to outsiders helps support their rationale to all of those who oppose them.

That's another reason Exxon isn't investing in alternative energy sources: They don't look big enough. For a company Exxon's size - No. 2 on the Fortune 500 - businesses of less than mammoth scale don't merit troubling with because they can't nudge the bottom line. (Fortune, source is linked)

Exxon's most stinging critics, such as Greenpeace and the Union of Concerned Scientists, have charged for years that the company has funded a range of global-warming doubters and deniers, and it's true. Public documents show that Exxon has long given money to organizations that publish papers, run websites, and write letters contending that global warming isn't happening, or isn't proven, or isn't connected to human activity. The company recently stopped funding some of those outfits - "about a half-dozen," says Cohen - though it may still be financing others. (Fortune, source is linked)

While ExxonMobil believes this way and does not agree with the opposition, other companies are making strides to appease both the activist groups and their shareholders. Stay tuned to find out who and how...