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ExxonMobil under investigation

Staff Reporter | 8:17 PM | |
The state of New York is investigating whether ExxonMobil misled the public and investors about the risks of climate change, a move sought by environmentalists that could signal a broader reckoning with the conduct of big energy companies.

A spokesman for ExxonMobil confirmed Thursday that the company had received a subpoena from the office of the attorney general of New York, Eric Schneiderman, related to the subject of climate change and was “assessing” its response.

The investigation focuses on whether ExxonMobil intentionally clouded public debate about science and hid from investors the risks that climate change could pose to its business according to a person familiar with the matter.

Schneiderman has broad leeway to take on such a sweeping target under both consumer protection laws and New York’s Martin Act, a securities law that protects investors.

The inquiry seeks a variety of documents and records from the company, according to the person familiar with the probe, who spoke on condition of anonymity because the contents of the subpoena have not been made public.

“We unequivocally reject allegations that ExxonMobil suppressed climate change research contained in media reports that are inaccurate distortions of ExxonMobil’s nearly 40-year history of climate research that was conducted publicly in conjunction with the Department of Energy, academics and the UN Intergovernmental Panel on Climate Change,” ExxonMobil spokesman Scott Silvestri said.

Schneiderman, the New York attorney general, is also conducting a similar investigation regarding Peabody Energy, a leading coal company. The person familiar with the matter suggested that other energy companies could also face scrutiny.

Environmental advocates hailed the probes as a major victory. For well over a decade, such organizations have been probing alleged links between Exxon, the world’s largest publicy traded energy company, and the raising of public doubt about climate change. They cited not only direct statements and advertisements by ExxonMobil, but also its alleged past support for think tanks and advocacy organizations that express climate change skepticism.

“We have watched Exxon sow doubt on climate science and delay action on climate change for nearly a generation,” said Kert Davies, formerly with Greenpeace and now the Climate Investigations Center.

Similarly, in a 2006 letter to the company, the British Royal Society charged that a variety of statements in ExxonMobil’s public documents at the time “are not consistent with the scientific literature that has been published on this issue.”

“The context here is that climate activists have long accused Exxon – along with various other large energy companies – of seeking to influence the climate policy debate to their benefit. The claim that Exxon ‘suppressed’ research is part and parcel of this broader issue. Naturally, the company takes a different view of this issue,” said Pavel Molchanov, an oil industry analyst with Raymond James, in a statement.

Recent news reports have increased calls for action, as the Los Angeles Times and the online publication Inside Climate News both published articles charging that Exxon researchers were concerned about climate change from fossil fuel emissions decades ago, and yet for long periods, the company publicly raised doubts about the science.

The charges have been so prominent that senator and Democratic presidential contender Bernie Sanders recently called for a Justice Department investigation into ExxonMobil regarding “what it knew and what it told the public and shareholders about the cause of climate change.”

Naomi Oreskes, a professor of the history of science at Harvard University who has been a critic of the company, likened the investigation to past investigations of the tobacco industry in a statement Thursday.

“We are not physiologically addicted to oil, but we live inside a highly developed infrastructure that fosters fossil fuel dependency and discourages alternatives.  We could have begun to shift the incentives, and encourage alternatives, if we had implemented a carbon tax…at any point over the past 20 years,” Oreskes said. “There are many reasons we did not do that, but a significant one, in my view, is the role of Exxon Mobil and others in fomenting disinformation, undermining public support for such initiatives, and lobbying against  policies that would have begun to decrease our fossil fuel dependency.”

In the 1990s, ExxonMobil took stances that expressed skepticism about climate change. For instance, in 1997 Exxon CEO Lee Raymond stated in Beijing, “Many people, politicians and the public alike, believe global warming is a rock-solid certainty. But it’s not,” according to a contemporary media report.

But matters have changed since then and the company’s current CEO, Rex Tillerson, has called for a carbon tax.

“ExxonMobil recognizes that climate risks are real and responsible actions are warranted,” said its vice president of public and government affairs, Ken Cohen, on a press call regarding the subpoena. “We have a commitment to helping address this important societal challenge.”

Cohen said on the call that the company began in the late 2000s to inform “shareholders and investors” about climate change and how it could affect the company’s business “through regulatory filings.” In response to the series by Inside Climate News, Cohen said the company has been in “active dialogue” with the publication since the stories came out.

“Our company, beginning in the latter part of the 1970s and continuing to the present day, has been involved in serious scientific research, and we have been supporting since that time scientific understanding of the risk of climate change,” Cohen said.

“Over the last decade, whispering concerns have increased within oil and other fossil fuel companies about a wide range of possible legal vulnerabilities.  I think such concerns in fact have driven companies to take public positions acknowledging basic climate science in more recent years, and compelled them to even begin advocating seemingly progressive but politically unlikely policy approaches like carbon pricing,” says Paul Bledsoe, a former Clinton White House aide on climate change who is now an energy and climate consultant in Washington.

Schneiderman, a Democrat, has been attorney general since 2011 and like other prominent New York-based prosecutors has not shied away from tackling big targets. Over his tenure, he has taken on Apple’s foray into E-books, big mortgage banks, and fantasy sports sites. He even filed a $40 million civil lawsuit against Donald Trump, alleging that the mogul’s “Trump University” — which purported to teach real estate investment techniques — in fact offered very little education at a high cost to students.
Source:
The Washington Post