Exxon Booted From Dow As Oil And Gas Falls

Exxon Booted From Dow As Oil And Gas Falls

Exxon Booted From Dow As Oil And Gas Falls

Exxon Booted From Dow As Oil And Gas Falls2020-08-26PopularResistance.Orghttps://popularresistance-uploads.s3.amazonaws.com/uploads/2020/08/exxon-e1598456449369.jpg200px200px

Above photo: Scott Olson/Getty Images.

NOTE: We post this article for its information about the fall of oil and gas industries. We do not share the author’s regard for Exxon, a company that has ravaged and polluted the planet and interfered in climate science to portray a false narrative.

Spending 92 years doing anything is an accomplishment, so let’s cheers to Exxon Mobil Corp., which spent more than nine decades as a member of the Dow Jones Industrial Average, pillaging the planet, lying about climate change, and making rich people even richer.

Now, those days have come to an end. One of the biggest oil companies on Earth has hemorrhaged money this year, and now it’s been booted from the Dow Jones because it just isn’t the superpower it once was. I almost feel bad for Big Oil these days. Almost.

The news of Exxon’s removal from the Dow Jones comes amid a pandemic that has absolutely crushed oil. We’ve seen nearly every major oil player turn to layoffs, freak out about collapsed demand, and write down their value while smaller companies default on loans or go bankrupt. The oil industry as we know it is going through a crisis that’s basically unprecedented, and Exxon being kicked off one of the classic benchmarks of the stock market is yet another sign of the upheaval.

The Dow Jones Industrial Average is meant to reflect stocks that are doing as well as the U.S. economy as a whole. In that light, it’s not surprising that it’s been fossil fueled since its inception. The 12 original companies on the Dow when it was created in 1896 included utilities like Laclede Gas, Chicago Gas, and the opaquely named North American Company as well as the Tennessee Coal, Iron, and Railroad Company. More familiar companies like Exxon and Chevron, as well as precursors like Standard Oil and Texaco, have made appearances as well.

But Exxon has been the most venerable, which makes its fall off the average so shocking. The company was the longest-tenured firm until Monday’s announcement it would get the boot at the end of this month. The immediate driver was Apple splitting up its stock after becoming the first American company to pass $2 trillion in market value. If you’re the type that has stonks or finds them interesting, you can read all about Apple’s stock split in more detail here, but for our purposes, it’s enough to note that it affected the weight of tech stocks in the Dow Jones Industrial Average. To fix that, it shook up what companies were listed, pushing Exxon off the plank as well as Pfizer and Raytheon. It also added Salesforce, pharmaceutical company Amgen and conglomerate Honeywell.

Exxon’s fall neatly mirrors Apple’s rise. At one time, Exxon was in Apple’s position as the most valuable American company. Exxon was valued at $400 billion as recently as 2011; CNBC said in 2008 that it attained that value because it was a “safe haven” and “not going anywhere.” Fast forward 12 years, and it’s clear Exxon is anything but.

The pandemic has undercut oil demand, showing oil is going somewhere, and it’s not up. The economic collapse has also revealed the wobbly financial house of cards undergirding fossil fuels, particularly fracking. But even before that, oil was beginning to slip: Exxon’s market value had recently shrunk to $175 billion, according to Axios, though it’s hardly the only oil giant that has failed to live up to lofty financial expectations.

A growing number of major banks have pulled out of funding Arctic oil exploration. Oil sands have become increasingly unprofitable. If you’re invested in, uh, investing, oil and gas are not a super-wise place to be putting your money.

If you’re the type invested in a habitable planet for future generations, the case against fossil fuels is also pretty clear. More oil and gas-driven carbon pollution is simply not a thing we can live with, a case activists have been making for years. While the transition was already underway prior to 2020, the pandemic has accelerated it.

None of this is to say Exxon is officially done for or that it doesn’t still hold massive power. A company worth $175 billion with its tentacles latched onto the Republican party is still a formidable foe. But it does show a different world is possible. Fingers crossed the Dow Jones can get Chevron out of there next.

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