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Page added on March 11, 2016
Big Oil Faces Courtroom Showdown
ExxonMobil is being investigated by the Attorney’s General of New York and California with a view to criminal charges for securities fraud and racketeering over their stance on climate change. The ramifications are enormous for the course of the global energy transition.
The oil and gas giant stands accused of lying to its shareholders for many years. On the one hand it professed that climate change was a green scaremongers’ invention, and paid many millions of dollars to organisations devoted to torpedoing the international climate negotiations that began in 1991. Meanwhile, on the other hand, it suppressed its own research proving the dangers of climate change, yet built assumptions of global-warming-driven sea-level rise into engineering of coastal and offshore infrastructure.
In my book The Carbon War I documented much of what its lobbyists did and said in and around the climate negotiations through the 1980s and 1990s. I know the company is guilty of malfeasance.
Now that ExxonMobil has finally been dragged into courtrooms, its problems are likely to escalate fast. Legal experts expect other States’ Attorneys General to launch suits. Presidential candidates Hilary Clinton and Bernie Sanders have called for the federal Attorney General to investigate. Class actions by investors will surely not be far behind. Existing investigative journalism makes it almost certain that other oil majors will soon stand accused with Exxon. Ongoing investigations will surely add to their legal woes, since Exxon and Mobil alumni are beginning to blow whistles. On top of this will come the evidence that subpoened internal communications will bring into the open.
The unfolding of this drama began in September last year when journalists at Inside Climate News, the Los Angeles Times and the Columbia School of Journalism began publishing a series of articles based on eight months of investigations. Their story, spanning four decades, was based on primary sources including internal company files dating back to the late 1970s and extensive interviews with former company employees. It showed that Exxon’s own internal research since the late 1970s had proved the dangers of global warming years before the issue came to wide public attention in 1988.
In November, New York’s Attorney General Eric Schneiderman issued a subpoena demanding a library of ExxonMobil’s financial records, e-mails and other documents. Legal experts immediately drew parallels with litigation against the tobacco industry.
In December, it emerged that Exxon’s peers knew all about the dangers of climate change as early as the 1970s too. The American Petroleum Institute, the oil majors’ umbrella lobbying organisation, ran a climate and energy taskforce between 1979 and 1983. Minutes of its deliberations suggested the dangers of climate change might require research and development to “investigate the Market Penetration Requirements of Introducing a New Energy Source into World Wide Use. This would include the technical implications of energy source changeover, research timing and requirements.”
An energy transition, in other words. That would have been civil minded, not to say timely. But instead, by the 1990s, the American Petroleum Institute, its member companies, and their million-dollar lobbying budgets, had formed the Global Climate Coalition: the main assault force trying to take down the climate negotiations, using denial that climate change involved significant dangers.
All the while, the companies had been bracing for climate change, factoring projected sea-level rise and wave heights into their engineering of infrastructure. For example, Mobil and Shell strengthened exploration and production facilities along the Nova Scotia coast. Shell increased the height of its $3 billion Troll gas platform.
In January, California Attorney General Kamala Harris began investigating Exxon, suspecting securities fraud over climate risks. California is a state currently well sensitised to cavalier treatment of its citizens, and worse, by the oil and gas industry. In October last year an old gas field used for gas storage by Southern California Gas sprang a huge leak. Residents nearby complained of headaches, nausea, vomiting and trouble breathing. More than 2,000 familiies were evacuated from their homes. It soon became clear that this was a gaseous equivalent of BP’s oil spill in the Gulf of Mexico: relief wells would need to be drilled to block the escaping gas, and they would take months to complete.
On 7th January California declared a state of emergency. Apart from the known short term health impacts, and unknown long-term impacts, the leak amounted to fully of a quarter of the state’s methane emissions.
On 2nd February, the inevitable happened: Los Angeles County District Attorney Jackie Lacey filed criminal charges against Southern California Gas. Eleven local, state and federal agencies are now either investigating or suing the gas company.
The leakage was finally sealed on 18th February, after nearly four months. But in the interim it had become clear that many other gas storage fields – the main storage mechanism for gas in the USA – are poorly regulated and in grave danger of leakage.
Would all this have happened if the American Petroleum Institute had taken its own advice about the need for a new energy source, and a global energy transition, in the early 1980s?
We can only wonder, as we watch the real-life episodes of The Good Wife unfold.
Jeremy Leggett, originally published by The Carbon War
16 Comments on "Big Oil Faces Courtroom Showdown"
Boat on Fri, 11th Mar 2016 7:18 pm
So the majority of the Senate and House are climate change deniers. They also support the oil companies and nat gas. The courts vrs. political power and big money. Why do I see 50 years or more of litigation.
makati1 on Fri, 11th Mar 2016 7:49 pm
Boat, I agree with you on this one. EXXON has still not paid the fines that were placed on it 25 years ago from the oil spill in Alaska.
But it will not matter soon. I see the big oil companies going out of existence when the current financial (loan) system breaks down. Be patient.
GregT on Fri, 11th Mar 2016 11:15 pm
“Why do I see 50 years or more of litigation.”
Because you’re dumber than a sack of hammers Boat. There isn’t any other logical explanation as to why.
MrX on Sat, 12th Mar 2016 12:16 am
This should be interesting to see Americans fork over hundreds of millions of dollars to prove that climate change is real.
Anonymous on Sat, 12th Mar 2016 5:53 am
Unfortunately, the PhewS oil cartel is amazingly resistant to almost any form of law, or regulation known to man. The massive corporate welfare given over to them means even in the unlikely event of a successful judgement, americant taxpayers would still ultimately end up paying big oils fines. But its more than likely endless appeals and foot-dragging, aided by the epic corruption in the uS injustice system will mean no real penalty is ever imposed. This does not mean the uS oil cartel cant get bad press, or suffer important moral defeats, they can. Just saying they seem to survive almost anything the world can throw at them just fine.
Sad to say, but true.
shortonoil on Sat, 12th Mar 2016 8:28 am
The oil age is ending! Over the next few years the world will be subsidizing the industry to the tune of $39 trillion to keep it alive. It already has $trillions in debt that it will never be able to repay. It is discovering 1 barrel of oil to replace every 8 that is being used, and world reserves, which follow the price, have fallen by 70% in the last two years. It now requires more energy to produce it than it delivers. Since energy is the only thing that it delivers that is worth anything the industry’s net worth is now on the negative side of solvent.
If the attorneys prosecuting this case expect to get anything out of it they had better hurry it along. The tax payer who will ultimately be paying the bill isn’t going to be solvent that much longer either.
http://www.thehillsgroup.org/
bug on Sat, 12th Mar 2016 9:08 am
Short, good post
Please explain “the world will be subsidizing the industry ”
Will oil be nationalized? How will it be subsidized? Will citizens not just be paying taxes to an “industry”?
Riots
shortonoil on Sat, 12th Mar 2016 10:06 am
“Please explain “the world will be subsidizing the industry ”
The industry is already being heavily subsidized; the price of oil as a percentage of its total production cost is now the lowest it has ever been in history. Someone is picking up the difference, and at present it is probably banks, and investors by taking on greater amounts of the industries’ debt. Sovereign wealth funds are being liquidated to cover the cost of NOCs. The currencies of oil exporting nations are falling all over the world; that is a form of subsidy by making payment in local currencies cheaper for local goods and services.
More than half of the world’s production has already been nationalized. Those countries will see falling percapita incomes as funds are directed to oil production. How the privately held section will be continually subsidized will probably depend on the politics of individual regions. To be sure they will be bailed out for as long as possible; you can’t run a modern world without oil!
Dredd on Sat, 12th Mar 2016 11:18 am
They are guilty of depraved heart mass murder (Oil-Qaeda & MOMCOM Conspire To Commit Depraved-Heart Murder).
Anonymous on Sat, 12th Mar 2016 7:46 pm
This story, and Shorts comments underscore the problem with litigating against uS oil corporations. Remember the inappropriately named BP (British Petroleum)* and there little accident a little ways back? They should have been nationalized or at very least liquidated to help pay costs of the damage they did. Did anything remotely like that occur? Of course, not, if anything the uSgov could not provide cover and protection to BP fast enough. Its my opinion, that except in small trivial ways, its nearly impossible to make any kind of meaningful impact on uS oils behavior-or bottom line even.
The uS has little problem seizing or freezing assets, or otherwise disrupting the operations of oil companies based in nations that the uS gov’t dislikes(ie actively trying to otherthrow). But treats its own, or ‘allied’ oil corporations with the greatest of deference. Virtual blanket immunity from legal action is but one of the many services the uS regime offers to its oil corporations. ‘Hostile’ nations NoC, however, are different matter altogether….
*’BP’ is something of a misnomer, when you consider americans own at least 1/2 of ‘BP’ and its decisions are made as much for the benefit of the uS as the UK. The UK, like the US, Canada, Australia etc, have no national oil companies and whose energy is almost completely dominated by uS firms(or Shell). AP (american petroleum) would just as good a name as BP. In fact, I think a better name for ‘BP’ should be
Beyond Prosecution
GregT on Sat, 12th Mar 2016 7:50 pm
Just out of curiosity Anon, what does ‘uS’ signify?
Anonymous on Sat, 12th Mar 2016 7:56 pm
united Snakes
GregT on Sat, 12th Mar 2016 8:05 pm
Thanks. Stored for future reference. 🙂
Kenz300 on Sun, 13th Mar 2016 11:58 am
The top 1% want it all….. and the RepubliCON party will give it to them………..
What do RepubliCONS believe…….. depends who is paying….. follow the money……. fossil fuels….. oil, coal natural gas…, nuclear, NRA………the top 1%
Are RepubliCONS the real EVIL DOERS………..they want to end Social Security, Medicare and access to contraception…….
Practicalmaina on Mon, 14th Mar 2016 8:42 am
They won’t pay until all of TPTB have their money clear. Then it will be the sheeple that pay the bill.
This is going to be the worst disaster in human history, I would compare what exxon-mobile has done is comparable to American cos that did buisness with Hitler. Despicable, blood soaked hands.
Kenz300 on Thu, 17th Mar 2016 9:21 am
Climate Change is real…… utilities need to deal with the cause (fossil fuels)
Exxon’s Climate Change Cover-Up Is ‘Unparalleled Evil,’ Says Activist
http://www.huffingtonpost.com/entry/exxon-evil-bill-mckibben_561e7362e4b028dd7ea5f45f?utm_hp_ref=green&ir=Green§ion=green