New York’s Attorney General Eric Schneiderman has been battling with Texas based oil giant ExxonMobil for nearly a year. Last year, the Attorney General launched an investigation into whether ExxonMobil had deliberately ignored its own research about the dangers of global warming and instead set about a campaign to mislead the public – and investors – about the dangers caused by burning fossil fuels, one of which is oil.
The AG’s investigation seemed focused on whether the company, as well as other oil businesses, had taken a page from the tobacco companies by twisting and mischaracterizing research to manufacture doubt and undermine the legitimate scientific evidence showing that human activities are warming the planet. Moreover, the AG was looking to see if ExxonMobil’s actions to undermine the science misled investors about the financial threats the industry faced from possible global regulatory efforts to curb fossil fuel use.
After initially looking at whether the company misled investors about the risks of climate change, the New York Attorney General is reportedly looking at the potential impact on the valuation of ExxonMobil‘s assets from a global crack down on carbon pollution.
The valuation of a company’s assets is an accounting practice used to determine the worth of the resources under its control. In this case, oil is the key asset for ExxonMobil. Yet, the company reportedly is the only one of the major oil producers which has not reduced the value of its assets despite a 60 percent drop in oil prices.
Whether that allegation turns out to be a threat to the company remains to be seen, but the fact that New York’s AG is widening his investigation is not good news for the nation’s biggest oil company. Over the past two years, as the price of oil has dropped, so has the value of Exxon’s stocks. An AG investigation adds more pressure.
And while the investigations of possible illegality will play out in the courts, what is clear is that ExxonMobil used its knowledge of global warming not as a tool to educate the world on the rising dangers to the planet, but instead to confuse the public and muddy the debate – in order to continue to maximize its profits.
According to media reports, Exxon was well aware of the dangers caused by the burning of fossil fuels at least as early as the 1980s. According to corporate documents a obtained by the Los Angeles Times, a leading Exxon researcher told an audience of engineers at a conference in 1991, greenhouse gases are rising “due to the burning of fossil fuels. Nobody disputes this fact.” The senior Exxon researcher went on to add that there was no doubt those levels would double by the middle of the 21st century.
Yet at the same time, the company was telling board members concerned about climate change that it had studied the science of global warming and concluded it was too murky to warrant action. The company said that its “examination of the issue supports the conclusions that the facts today and the projection of future effects are very unclear.”
Why would a company with well-documented research hide its conclusions and publicly argue the opposite? According to the Times, it was that Exxon feared a growing public consensus would lead to financially burdensome policies. And Exxon saw an upside to a warmer climate: Less expensive exploration and drilling in the Arctic.
According to the Times, top officials proposed “a plan for the ‘Exxon Position’: In order to stop the momentum behind the issue, Exxon should emphasize that doubt. Tell the public that more science is needed before regulatory action is taken and emphasize the ‘costs and economics’ of restricting carbon dioxide emissions.”
And they succeeded. So much so that national political figures still argue that global warming is a hoax.
Exxon now argues that their internal science led them to make statements that at the time they believed were the truth. The AG’s investigation may well shed light on the truth of that statement.
But what cannot be ignored is that climate changes are occurring due to global warming – and that such warming is primarily the result of human activity. The world has lost valuable time due to the tactics of the opponents of that scientific fact. As a result, millions worldwide will suffer.
Setting the record straight about what Exxon knew and when it knew it is important to moving forward decisively on climate change in 2016. Exxon fully understood that denying climate science was influencing not only investors and members of the general public, but the lawmakers and regulators who had the power and responsibility to craft policies to act by clamping down on climate pollution.
The world cannot ignore this rising threat. As one of the world’s leading contributors to global warming, the United States must take the lead in curbing the damage that is due to come. And it must do so by the following the advice of the world’s leading scientists: leave fossil fuels in the ground and rely on safe, non-polluting, energy sources.
Blair Horner is the Legislative Director of the New York Public Interest Research Group.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.