Exxon, the externalizing machine

Did you know that sixteen years after the Exxon Valdez oil spill Exxon has still not paid up any of their $5 billion in damages? Alternet's story The True Price of Oil tells how Exxon is saving itself $400 million every year it delays even though its being charged 6 percent annual interest on the judgement. Not paying earns Exxon an estimated 14 percent return on capital, so they choose to delay as long as possible - the cummulative effect is to have saved them enough money to pay the entire $5 billion judgement.

The Alternet article also tells of how fines for oil spills are just a cost of doing business, and not paying those fines is just a way to avoid paying any of those costs while all the time external entities (the environment and the surrounding society) bare the cost. This is the perfect definition of externalizing your costs and makes Exxon a king of externalizing. If everyone paid the true cost of oil at the pump we'd never fill up - estimates of these subsidies go over $1000 per driver per year, around $20 per week, and that was before the Iraq war started which has probably increased that figure by 50% or more.

And while I'm on the subject of oil - I read last week that Toyota had been telling all the owners of its electric RAV4 SUV that their cars would be taken back and crushed at their end of current leases. They claim they cannot afford the cost of liability for the cars and maintaining spares inventories. The State of California has apparently twisted their arms asking them to offer California leasers the opportunity to retain their vehicles in return for a release of liability and spares supply commitments. This phenomenom of crushing electric cars is apparently rife - there's even a DontCrush.com web site with letters from owners wanting to save their cars, and photos of crushed electric cars.

I have previously heard a different theory of why car manufacturers are so eager to avoid pure electric cars on the road. Contrary to their claims they have turned out to be extremely reliable. Powered by electric motors their have far fewer moving parts and need very little maintenance. The knock on effect is less money for the manufacturers in supply spares, and far less money for dealers servicing cars. No oil changes are needed to drag buyers back to the money pit forcing dealers to sell and forget, or pray the car goes wrong. But ask yourself - how often do you service your washing machine - maybe once every few years, or even less? Electic motors just last and last - all you ever need to replace is the brushes which are inexpensive items. Thanks to regenerative braking you'll also put a lot less wear and tear on the brake pads. Really all you have to do with an electric car is replace the tyres once in a while and wash it - they are effectively like a razor with an everlasting blade, or an inkjet printer with bottomless ink cartridges. Is it any wonder car companies want them off the road?