Exxon's 1Q profit falls 46 percent amid decline in oil price

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  • Baron Scarpia Logan, UT
    May 2, 2015 6:09 a.m.

    I recall headlines of years' past that declared Exxon-Mobile's profits were soaring on oil's high prices, and today's headlines of dwindling profits brings a sigh...

    There's a growing movement for institutions to divest from oil and fossil fuels that is taking off across universities (e.g., Stanford), major religious denominations (e.g. Church of England), and other investment funds centered mostly on moral grounds, such as pollution and climate change.

    However, there's also an argument that fossil fuels are increasingly risky investments. Because oil is dominated by OPEC's cartel that can grossly influence price and supply, OPEC member nations (largely run by royals and despots) have been out to knock America's booming, but expensive-to-produce oil industry out of the market. Because American oil producers can't compete on cost, their moves have been largely successful.

    Coal is increasingly being edged out by cheaper and more competitive alternatives -- from natural gas to renewables. Additionally, both state and federal pollution regulations make it difficult to burn without demands for expensive clean up.

    In short, both moral and economic reasons make fossil fuels a risky investment.