Chronicle of Higher Education, January 10, 2003 Greening the World or 'Greenwashing' a Reputation? Exxon's role in Stanford's huge environmental-research project attracts attention and questions By GOLDIE BLUMENSTYK It's hard to pinpoint what is most jaw-dropping about Stanford University's new Global Climate and Energy Project: the sheer size of the $225-million, 10-year project or that Exxon Mobil is the chief sponsor. The project, hailed by Stanford leaders as "a revolutionary collaboration," is stirring both marvel and worry among scientists and activists who focus on energy and global-warming issues. Landing a project of this size and scope is clearly a coup for Stanford. The project will involve researchers from Stanford and institutions around the world in developing a portfolio of clean-energy technologies, as well as techniques for controlling greenhouse gases produced by traditional fuels. The amount pledged to this project is greater than all of Stanford's corporate research support combined over the past 10 years. But Exxon's high profile in the venture has prompted some professors and environmental experts -- both at Stanford and elsewhere -- to question whether the company is using its pledge of up to $100-million to Stanford to "greenwash" its environmental reputation. Unlike BP and several other big oil companies, Exxon Mobil has tried to debunk some of the most widely accepted theories of global-warming science, including some advanced by Stanford's own professors. The Exxon pledge looks like a lot of money, but to a company of that size, it's like "the paper-clip budget," says Peter Altman, director of Campaign Exxon Mobil, an investor group created by religious organizations that is pressuring the company to deal more directly with global warming. The sum promised to Stanford, he notes, is just one-tenth of one percent of the $100-billion Exxon says it plans to spend on oil exploration in the next decade. Some environmental activists say they are also concerned that the project, with its 10-year horizon, fits all too neatly into the hands of the Bush administration, which has argued that the United States needs a decade more of research on the causes of climate change before committing to anything but voluntary limits on carbon-dioxide emissions. Critics also question whether Stanford will have sufficient independence from the sponsors in setting research priorities, and say that the institution has yet to make clear the procedures it will use to ensure that it does. Stanford says the companies will have the authority to approve the research topics and budgets each year, but that the university will choose the specific projects and select the researchers, although it may consult with the sponsors about those researchers. Stanford's president has said it will eventually release at least a synopsis of its contract with the companies, once it is finalized. Along with Exxon Mobil, the project sponsors include General Electric and Schlumberger. E.ON, Europe's largest privately owned utility company, has signed a letter of intent to join. Other companies may join later, says Stanford, and officials there confirm that Toyota has been invited. Franklin (Lynn) M. Orr Jr., director of the effort now known as G-CEP (pronounced "gee-sep"), acknowledges the political sensitivity of having Exxon as lead sponsor. But he says that shouldn't negate the value that could come from the project, which is to focus on research that could lead to commercially viable technologies, not the basic-science questions of climate change. Until November the dean of Stanford's School of Earth Sciences, Mr. Orr says the project will bring resources to research that the entire world needs, particularly as less-developed nations modernize and their needs for energy expand. Technology Barriers "This is one of the great challenges of the century, " says Mr. Orr. About half the research will be conducted at other institutions, and Mr. Orr says the opportunities for building links to research organizations in Asia and other places will help to ensure that the work takes into account the societies' different needs. Technology barriers in China "are pretty different" from those in Finland, he notes. One of the first four projects will cover techniques for producing hydrogen, including one in bioengineering that involves improving the ability of bugs to produce the gas. Hydrogen is considered a promising replacement fuel for hydrocarbons like gasoline and coal, but experts say there are still many issues related to capturing it, storing it, and distributing it that must be solved before a "hydrogen economy" can become feasible. Another project will use the techniques of Stanford's internationally known Energy Modeling Forum to help Mr. Orr and others to set priorities for future G-CEP research. The forum is a research institute, based at Stanford with links around the world, that uses mathematical models and other tools to evaluate the impact of policy and technology changes. The idea, says James L. Sweeney, a professor of management science and engineering and former director of the forum, is to figure out "where would you get the biggest reduction in carbon dioxide per dollar of research." Mr. Sweeney, who, like Mr. Orr, was one of the key figures in developing G-CEP, says he expects the project will help catapult Stanford into the leading edge of energy-technology research. The Energy Forum aside, he and others acknowledge that Stanford hasn't been regarded as a leading player in energy research related to climate change. Institutions like Carnegie Mellon University, the Massachusetts Institute of Technology, and Princeton University, to name a few, have had bigger reputations. In fact, G-CEP might never have been developed had it not been for Stanford's being passed over for a major grant back in 2000. BP, the world's second-largest oil company, considered Stanford, MIT, and Princeton for its 10-year, $15-million Carbon Mitigation Initiative, but ultimately chose Princeton. (Ford Motor Company later kicked in an additional $5-million.) Soon after, Stanford scientists approached Schlumberger about financing research on underground sequestering of carbon dioxide. The company, known for its advanced technology in measuring and monitoring oil and natural-gas reservoirs, was interested, but suggested that Stanford recruit other partners. The university then approached Exxon Mobil, only to discover that the oil giant was considering a technology-research project of its own, one that would look well beyond carbon sequestration. "We were conceiving a very broad technology initiative," says Brian Flannery, manager of science, strategy, and programs in the company's department of safety, health and environmental science. The project began taking shape in August 2001, though it would be more than a year before the project now known as G-CEP, complete with its own Web site and logo, was made public. Mr. Flannery, a key player in developing Exxon's participation, says the grant does not mark a change in the company's attitude toward climate change. It still believes a lot of climate-change science is "uncertain" and that forced reductions in emissions aren't realistic solutions to a 100-year problem. Creating a range of new technologies "is the way to address climate change," he says. "This is a way of expressing that in a tangible way." Exxon spends about $600-million a year on research, but most of it is related closely to the company's existing business interests. The idea for this project, he says, is to finance "fundamental, precommercial research" that would not likely be supported within Exxon itself. Exxon's 10-year commitment of $100-million is "by far" the biggest grant the company has ever made, says Mr. Flannery. He says Exxon was looking for a sum that would show "a significant contribution that would mobilize significant resources." Each year, the sponsors will decide which topics are to receive financing, and typically will allocate enough money to cover three years of research. By the seventh year, all the funds are likely to have been committed. The sponsors have agreed that once topics and budgets are approved, each will contribute a proportionate share of the money, based on their overall financial commitment. Mr. Flannery says Exxon choose Stanford because, along with the breadth of its science and engineering expertise and its international connections, the institution is known for working with industry, particularly in computer science and biotechnology. Also, says Mr. Flannery, a number of Stanford professors were willing to "change their career direction" in order to be part of the project. In academe, language like that can raise red flags, suggesting that a researcher is changing priorities because of oil-company money. But Robert H. Socolow, co-director of Princeton's carbon-mitigation program, says that Exxon and the other sponsors have more to lose than gain if they try to exert too much influence over the direction of the research. As G-CEP is now conceived, Mr. Socolow says, it appears that Princeton has "a freer hand" than Stanford will in deciding what projects to pursue, since BP and Ford provide the financial support without approving research topics. But he notes that for both efforts, it is significant that the sponsors have made a point of saying that they are supporting the work for 10 years. "The political cost of cutting us off if we're doing good work is substantial," says Mr. Socolow. The same would be true for the sponsors of G-CEP, he says. He and others who have looked at the G-CEP research agenda say the topics all seem scientifically on target, but many still question which topics on the list will really get the funds. "It covers the moon," says Stephen H. Schneider, a biology professor at Stanford with expertise in climate science. "The question is, how it's done." Mr. Schneider, whose work has been attacked by political groups financed by Exxon, says he still considers Exxon "a distorter of information" on climate science, because of its own statements, and its financial support for groups like the Competitive Enterprise Institute and the Marshall Institute. Many environmental researchers say those groups try to undermine commonly accepted theories of climate science. But Mr. Schneider says that, for now, he's keeping an open mind about G-CEP and Exxon's involvement. If wind- and solar-energy technologies don't get a lot of support, he says, "then balance is a problem." Though he was part of the group from Stanford that competed for the BP project on mitigating carbon dioxide, Mr. Schneider says he wasn't involved in developing G-CEP. He says he doubts that the kind of work he does would be supported by the project, given its focus. Still, he credits his colleagues for getting Exxon "out of the closet" in acknowledging that climate change is a problem. Reported comments from a top Exxon Mobil official the day G-CEP was announced, however, haven't given skeptics much comfort. In a story by the Associated Press, Frank Sprow, the company's vice president of safety, health, and environment, was quoted as calling G-CEP "a program that is completely detached from climate science." According to the account, Mr. Sprow also said that the cleanest energy sources -- wind, solar, and fuel cells -- would never be economical enough or reliable enough to meet future global energy demand. As a result, Exxon Mobil has requested that Stanford scientists focus on finding cleaner ways to use fossil fuels, as well as creating other "breakthrough, inexpensive technologies." A spokeswoman for Exxon Mobil says that it is true that the company questions the commercial viability of many renewable-energy technologies but adds: "It should not be inferred by reading the AP story that Exxon Mobil is dictating to Stanford which research areas it should focus on." Mr. Orr, too, insists that the project will look beyond fossil fuels. Exxon's Skeptics Environmental groups, however, remain wary. Some fear that the project, which has been praised by members of President Bush's cabinet, will strengthen the administration's go-slow approach on tougher restrictions on greenhouse gases. The project is good in and of itself, but "it's not an excuse for not doing anything now" about emissions, says Eileen Claussen, president of the Pew Center on Global Climate Change. The center works with some of the biggest energy and industrial companies in the world that do acknowledge the need for emissions reductions. BP, Shell, and Sunoco are all Pew Center partners. Exxon Mobil isn't. The focus on commercially viable technologies, rather than policy, is also of concern, says Dan Lashoff, deputy director of the Natural Resources Defense Council climate center. He says it's unrealistic to minimize the role that policy plays in getting new technologies into use. Carbon-dioxide scrubbers on power plants and catalytic converters on cars, for example, are now all well-accepted by the marketplace, Mr. Lashoff notes. "Research and development alone would have never caused that to happen." At Stanford itself, some students are wary about the project as well. One who has spoken out, Ben Abadi, says it appears that the sponsors will have too much say over the research agenda and that the name of the project is misleading. "It's really a fossil-fuels project," says Mr. Abadi, a junior majoring in economics. He faults the project for omitting topics like climate science and energy-efficiency research. "Stanford is allowing itself to be part of the fraud that it's about climate change." Mr. Abadi's views were echoed by The Stanford Daily, the student newspaper. "Either the project should include policy analysis and/or make public statements regarding policy solutions, or it should change its title so that it doesn't give undue credit to a company like Exxon Mobil for dealing with issues of climate change when the corporation still doubts the links between its actions and the problem," it said in an editorial. The Daily also called on the university to make public all areas proposed for research that are not approved by the sponsors, and to seek alternate sources of funding for those areas. Stanford's Independence Mr. Orr says some of the governance questions are still being resolved. But he insists that Stanford will not compromise its academic independence. The project's management committee, made up of the sponsors, will pick the broad research topics each year, and "we will certainly consult with them about who the players might be" who are best qualified to conduct the research. But he says the selection will be made by Stanford. "The intent is not to try to engage the management committee at the level of every principle investigator," says Mr. Orr. Deans will oversee projects assigned to Stanford professors, he says. The university also intends to appoint an internal committee of Stanford faculty members and an external advisory committee that would probably include representatives from academe, industry, and nongovernmental organizations. Mr. Flannery, the Exxon Mobil official who helped to forge the collaboration, says the relationship between the sponsors and Stanford will be more interconnected than the one between Princeton and BP/Ford. "This isn't a pure philanthropic grant," he says. It's meant to create a forum where industry and university scientists will have "direct, bench-level interactions." But in the end, he says, "it's Stanford's program." Financial Boom for Stanford The project will be welcome financial news at Stanford. Though its endowment is still well above $7-billion, the university has felt economic pressures. Many of its biggest benefactors are still suffering from the Silicon Valley slump, and the university is looking to reduce its $507-million general-fund budget by 8 percent this year. In November, it imposed a hiring freeze on nonfaculty positions. The project could also produce payoffs to Stanford in royalties if the research leads to patents with commercial appeal, although the unusually-generous licensing terms the university gave to the sponsors might diminish that. For the first five years after any patents are issued on G-CEP research, the sponsors will have exclusive rights to commercialize the inventions, without paying anything to Stanford. After five years, other companies will also be able to license the inventions, but must pay a royalty to do so. Research sponsors typically receive nonexclusive rights to use inventions developed with their funds without paying royalties, but generally are asked to pay if they want exclusive rights. Mr. Orr acknowledges that the terms provide an extra benefit to the sponsors, but he calls it a "a small one" that really amounts only to a five-year head start. In energy systems, he says, "five years isn't a lot." 'A Reasonable Return' Mr. Flannery says the five years seemed "a reasonable return" for the sponsors. More important than the money, he says, is that Exxon and the other sponsors have the financial wherewithal and the worldwide reach to truly commercialize a technology on a global scale, should G-CEP research lead to one. He says Exxon would not have gotten into the venture if it didn't believe it could benefit from all aspects of the research agenda. So even though Exxon now doesn't view renewable-energy sources as commercially attractive, a key breakthrough -- say a new technology that improves methods of storing solar power -- could change that assessment quickly. "We're a big organization," says Mr. Flannery. "If we thought there was a commercial opportunity, we'd pursue it."