This lawsuit is meritless and is being pursued only for political reasons. I hope the judge awards attorneys' fees to ExxonMobil.
7
Since this is likely to set a precedent for all US companies for the future, I would expect more legal assistance and legal teams to join Exxon's defense. Likewise the Attorney's General
for other states will supply assistance to NY's AG.
1
In regard to all the comments about banning anything: This country will never ban a thing if it's making the wealthy even wealthier.
They've taken a perfectly good concept like capitalism and totally corrupted it.
3
Investors can figure it all out for themselves. That is how a free market works. This case is all about government sponsored extortion of big business. That's all they have done for the past 10 years.
5
N.Y. Attorney General Underwood's case is fundamentally fraudulent. They claim they are protecting Exxon Mobil's stockholders from fraud, but in fact they are inflicting harm on those very stockholders with this baseless suit. Exxon's oil and gas reserves are fairly valued. The hypothetical future in which those reserves become valueless will not happen. Underwood's assertion that future changes in the laws (that presently allow oil and gas) are inevitable is just silly. This lawsuit is frivolous. If stockholders are truly to be protected from fraud, the Judge Ostrager should rule that Exxon's litigation costs be borne by the Attorney General's office.
6
"Indeed, it might have used that money to build a stronger portfolio in cleaner fuels."
What do the editors think this means? I sure don't know.
There is today no way to replace fossil fuels. The sun only shines during the daytime. The wind only blows when it blows. Most states have no access to hydro power and even in the states with potential hydropower, there are strong groups opposed to developing it. Battery storage is in its infancy and incapable of providing more than a tiny fraction of our needs at any point in time. The much vaunted Tesla project in Australia only serves to supply 30,000 houses for a short time, to handle temporary blackouts.
Germany, the country with the greatest amount of renewable power in its mix, has the highest energy costs in Europe, twice those in California, which are higher than the rest of the US. And Germany has found that as they decommission nuclear plants, they end up using coal. Why? Because they need reliable power on demand, day or night.
And if vehicles gradually switch from gas/diesel to electric, this will require fossil fuels to produce the power.
By the way, "Schneiderman" or generically,
NY Attorney General", is synonymous in my dictionary "with self promoter".
7
As a former ExxonMobil employee, the company I left several years ago had an insular management culture, where 'managing up' and improving one's own career prospects was a top priority. Only good news made it up the line, only smoothtalkers were promoted, presentations were famously scripted and exhaustively wordsmithed, and management was woefully unaware of what was happening in the trenches and how work was really done. Not surprised they are clueless to the true nature of the world and the problems it is facing. They are busy rearranging their chairs on the Titanic.
7
Let's put the blame where it lies, with the consumer, who is always right. We wanted our oil and nothing was going to prevent us from getting and using it. The vast majority of Exxon's customers are not shareholders, and couldn't give a hoot in a holler who was defrauding who. The profits Exxon has made over the last twenty or thirty years will in no way be impinged by the fines that the company might, might, might suffer. So hopefully, the state of New York will make back in fines the money it's investing in the trial, cause that's as good as it's going to get.
1
Is Exxon Conning Its Investors?
This is a rhetorical question, right?
4
I have a relative who works in the "oil patch" down here in Houston.
He has observed that Exxon has significantly increased the height of the berms that surround its refineries along the Gulf Coast during the past two decades.
The berms were raised to prevent potential flooding at the refineries from sea level rise and possible increased storm surge levels.
That is an obvious acknowledgement of the threats to their business from global warming and the preventive actions they found it necessary to make.
Any statements that Exxon corporate may have made to the contrary during these years were not truthful.
6
Please don't worry. The planet will be fine.
After we have foul our nest to the extent that it will no longer sustain human life.
Then the planet will heal itself. And who knows, it might try dinosaurs again, they were less destructive
4
Every BIG corporation is conning their investors. That's why markets continually crash.
Lies and insatiable greed by a small proportion of the population are at the root of every man-made problem humanity suffers.
In the end, it all comes crashing down and takes the other 99.9% of the world's population with it. Only the 0.01% who caued it profit.
There must be a special place in hell for people who would destroy the world for personal gain. Or maybe just a special place in prison.
4
I'm sure glad that North Carolina taxpayers are not having to fund this ridiculous lawsuit, and am sorry for those of you in New York having to do just that.
5
@Tim Clancy
North Carolina? Seriously?
"Florence’s Floodwaters Breach Coal Ash Pond and Imperil Other Toxic Sites"
https://www.nytimes.com/interactive/2018/09/13/climate/hurricane-florence-environmental-hazards.html
https://www.nytimes.com/2018/09/19/climate/florence-hog-farms.html
You have a very short attention span!
2
Exxon maybe valuing assets on its balance sheet based on plans to extract oil that will never be used, or will have to be sold at a price that will not afford it a profitable ROI.
Awareness of climate change is accelerating demand for alternatives to fossil fuels. Wind, solar and other alternatives are becoming increasingly competitive with energy produced from oil, gas and coal. An ever-more environmentally conscious consumer and lower priced alternatives are very disruptive to Exxon's business. The same holds true for all large oil conglomerates. It is why Saudi Arabia had to shelve plans to IPO its state-owned oil company. No one could agree on how to value the company, with a straight face that is.
If Exxon is valuing its assets based on faulty assumptions and without taking into account how climate change is and will affect the oil markets, then it is "conning" its investors.
28
@GM
You might want to look at data instead of your own wishful thinking. The use of natural gas has been soaring for decades. It is the primary fuel used now to generate power. Why? Because it can reliably produce power at night and when the wind isn't blowing, in other words when renewable power is unavailable no matter how much capacity is put in place. Here is the data:
https://www.eia.gov/energyexplained/index.php?page=natural_gas_use
Exxon, by the way, is the largest producer of natural gas in the US.
https://www.reference.com/business-finance/largest-natural-gas-companies-united-states-6ab989f62f8a78f4
6
Exxon's actions are like those of Big Tobacco. The tobacco companies knew as early as the 1950s that smoking caused cancer, but they obfuscated the data, claiming that there was no scientific certainty regarding the dangers of smoking. We now know that was a lie, meant to protect Big Tobacco's profits.
In well-documented reporting, Exxon's own scientists knew in the 1970s that unabated use if its products would wreak environmental catastrophe. Like tobacco, Exxon's acknowledgement of that fact would cut into profits and send investors fleeing. So they did exactly what the tobacco companies did - lie. But the terrible difference here is we're not talking about individual smokers, we're talking about all of us and fate of the entire planet. If withholding that information from Exxon shareholders over many decades is not fraud, what is?
Perhaps the company's army of lawyers can get the case dismissed, or mitigate the damages from the lawsuit. But as the editorial states, the public will at least have a window into how Exxon hid and obfuscated the dangers of climate change to protect its bottom line. And if that's not evil, what is?
146
@jrinsc All of your allegations have nothing to do with this lawsuit, which revolves around the complex accounting treatment of Exxon's assets measured against possible regulation. If the NY AG proves her case (which is unlikely), then she'll "recover" damages for Exxon's allegedly-defrauded shareholders. I'm one of those shareholders and I'm also a lawyer who has handled securities fraud cases. The AG is overreaching or either doesn't understand the accounting issues. In truth, however, neither she nor her predecessor cared. The last paragraph of this editorial sums up the true purpose of the litigation--to try to force Exxon and others to change their business through the courts because the Times, the AG et al. lack the votes in innumerable legislative bodies to enact the policy they want.
12
@James
Thank you for your comment, and I appreciate your perspective as an attorney who has handled securities fraud cases. As you say, we shall see what the merits of this particular case are. Perhaps it is indeed politically motivated to provide a change in business policies not available via "innumerable legislative bodies." You may well be right that my allegations have little to do with the particularities of this case. Because none of us know the details, we can't be sure without the case moving forward.
But here again, there are similarities (in certain ways) to what happened with Big Tobacco. The federal government did little to regulate or pursue tobacco companies, despite the fact that the companies hid the dangers of smoking for decades. The costs of smoking were passed along to consumers, and to the federal and state governments. It took states' AGs to pursue suits against tobacco companies. However, in those cases, the plaintiffs were easy to find. With climate change, that's difficult - perhaps necessitating what seems to be a misguided lawsuit by the New York AG on behalf of Exxon's shareholders.
I'm not an attorney. But I do breathe air, and want to see a livable planet for future generations. We're all paying the costs for the data that Exxon and other companies willfully hid for decades. Let the lawsuit proceed, and let's see what happens.
31
@James You are wrong James one of the crimes that tobacco was nailed for was fraud identical to the crime that Exxon is sued for. This is Trumpian deflection, changing the subject to obfuscate.
The issue is did Exxon said things in public that could affect the price of oil than things said in internal communications? The answer is a resounding YES. Move on to trial and hopefully convictions, fines, and long prison sentences.
The real question is whose biding are you doing obfuscating, or do you really not understand that fraud has been committed?
16
To me, as a non-lawyer, but someone who worked for Exxon for 32 years (as well as being a life-time Sierra Club member), this sounds like a political or public relations issue, not a matter of law. If Exxon is guilty of not accounting for regulations that do not yet exist, but might in the future, so must all other fossil energy producers, all electric companies that burn gas or coal, all transportation companies that move these products around, and in fact every company that benefits from the use of fossil fuel. At the same time, how can you hold a corporation accountable for predicting future regulations, when President Trump, for example is eliminating most environmental regulations, argues that climate change is a hoax, and withdraws from the Paris Accords? "Assume the worst, and hope for the best" is not part of the Generally Accepted Accounting Principles. We may all wish for a world with clean energy and one which actively combats climate change, but that does not make it a court case.
48
@Pete Like you, Pete, I am an Exxon annuitant who worked at their Florham Park location. I always experience extreme mixed emotions when I read these kind of articles about Exxon -- because on the one hand the company treated me well and enabled me to enjoy a comfortable retirement. On the other hand, I cannot forget that during my employment there (Lee Raymond’s tenure) Exxon was the wealthiest company in the world, yet they fired all their (unionized) cleaning people and replaced them with undocumented immigrants to save a few dollars.
37
@Adeland
And Lee Raymond retired with a benefit package worth about $500,000,000 and lots of Exxon-Mobil (he brought about the merger) company perks! His retirement package was then the largest in our history.
13
@Pete
It's called 'motivation'. If lawsuits are required to get fossil energy producers moving, go for it. What, you want to give them another 30 years to improve they way they do things?
12
The companies that sell fossil fuels are not the major responsible parties for CO2 emissions. Those who buy and burn fossil fuels are those causing the emissions.
The political problem in putting the enviromental cost on the consummers of fossil fuels is that most all voters buy and burn fossil fuels directly or indirectly.
If we want to decrease burining of fossil fuels, dramatically increase the cost of these fuels through fuel consumption taxes.
This is also how we can create the right incentives for consumers to reduce their use of fossil fuels and create incentives for the development and deployment of new technologies to dramatically reduce fossil fuel demand.
The real test to see if a politician is serious about climate change is to see if they are using their political capital to significantly increase the cost of fossil fuels to consumers.
24
@Richard. For reasons that are unclear (to me, anyway), the US public in general is anti intellectual and suspicious of science. Nearly 50% don't 'believe in' evolution and remain convinced that the world is less than 6,000 years old. It will be a huge effort to convince these people of the existential threat that climate change presents.
Therefore, funding fake 'science' claims that deny climate change, while formulating business plans and forecasts based upon these environmental changes, is as evil an act as any business has ever committed.
8
@Richard The proper and logical approach. But, you see, that would require thoughtfulness and effort and ingenuity. Much easier to boost one's creds by blaming big, bad Exxon.
1
@Richard Exactly. When fuel prices rise, consumers buy hybrids, turn off lights in the house, and install solar panels. When fuel is cheap they buy SUV's and don't care about waste or alternatives. I am always pleased when fuel gets expensive. It's the only way Americans connect the dots.
6
The NY AG is claiming that if governments apply high carbon taxes, Exxon-Mobil will be worth less, and its investors will have been gypped because they paid too much for the stock.
Why is it, then, that Exxon is promoting a carbon tax? It is because whatever anti fossil fuel taxes or regulations are imposed will injure its smaller and less profitable competitors more than it will injure EOM and the rest of the big boys. Add a carbon tax? Gasoline and other fuels will cost more and demand will decline. The smaller companies will go out of business and the big boy market share will increase.
In the meantime, the NY AG is hoping to enhance her future elective prospects by fighting for the people in a pointless battle to extract extortion from Exxon. It is corruption and misuse of public resources.
17
@ebmem
The NY AG who filed the lawsuit is not a political person. She was the assistant or deputy to AG Schneiderman who resigned earlier in the year. The AG who filed the case, Barbara Underwood did not seek to remain AG by running for the office this past November. So, she's not "hoping to enhance her future elective prospects" she refused to run.
And when you state that Exxon is promoting a carbon tax, sure that's NOW. This lawsuit reaches back into the past, as it should. Exxon, and other companies like it, paid members of Congress off for years to allow them to do what they want. Now that the handwritings on the wall, sure they're in favor of a carbon tax.
Like tobacco companies, BIG OIL has known for decades that they were destroying the environment. The only cared about profit/money. And just like tobacco they should be held to task for what they did and pay the piper.
Companies like Exxon and the Koch Brothers have fought tooth and nail to continue their oil and gas businesses instead of doing the right thing and developing alternative energy sources. Hey, they could have gotten in front of this and cornered the market in solar or wind. But they took the easy road and continued at the detriment to the earth and those who inhabit it.
The only corruption going here was perpetrated by Exxon and others in the industry. Think back to 2000 when Dick Cheney had closed door meetings with these companies and crafted an energy policy to suit THEIR NEEDS, NOT OURS!
88
@ebmem
This is the real problem. The oil companies keep telling investors that they have reserves worth many billions of dollars. The investors are buying stock based on the predicted future value of those reserves. But, according to climate scientists, if we use those reserves we are courting environmental disasters that (according to the government report that came out Friday) will take 10% out of the economy while making everyone's lives more difficult.
So it is not so much which exact methods the government uses to keep the fossil fuels in the ground as much as (the Party of Trump notwithstanding) with more and more extreme droughts, floods, fires, storms, and even fracking induced earthquakes occur the people are going to demand that we go to renewable energy (which is nearly free once installed, but creating lots of jobs now).
The problem is that Exxon knew that its business model was unsustainable, because it would damage the environment. Its scientists told them that forty years ago and they changed their business model in response to that information, except they neglected to tell their shareholders, even recently as it keeps adding to reserves and telling shareholders that it will be selling those reserves.
Markets are based on everyone having the same information. I'm not sure what the AG is charging them with, but lying to shareholders is bad.
If their customers burn those reserves, btw, there will be more and more freak weather. That is what the math says.
38
@ebmem
If I represented Exxon or similar, I would promote a carbon tax.
It would likely allow people to feel like they are doing something, it will keep people from getting over their fear of nuclear energy - likely the biggest threat to fossil fuels - and solar and wind would take a very long time to erode the business if they ever could...all while the carbon tax is in place.
How long will a carbon tax stay in effect? Probably as long as politicians are willing to put the long term well-being of the world ahead of a chance to score an easy and big win with a huge share of the voters. We probably need a stopwatch, not a calendar, to measure this duration.
Promote the carbon tax, endure it for at most two years (the longest possible time until the next election) and, like magic, the oil and gas business is back at the status quo while looking like it did something for the planet!
3
Exxon Mobil is an incredibly complex and large corporation that makes it difficult to glean the truth behind many suits brought against it. It is similar in complexity to a government. Some parts are unaware of what other parts are doing. But unlike a government entity, Exxon's bottom line is the acquisition of money. It's responsibilities to the planet and specifically climate change are secondary. So, while caring about the environment makes good commercials, I'm not so sure that this is even close to being a priority.
16
@MKathryn
When the corporation was invented, and even when Exxon was chartered, all of the stakeholders were supposed to benefit from the actions of the corporation. The stakeholders included the state that chartered the corporation, the local community, workers, customers, the management, and the shareholders.
The bottom line is not supposed to be money. The idea that corporations have no responsibility to anyone but the shareholders is relatively new. It was a mistake to make corporations so single minded and unidimensional. It is hurting he economy and the political situation, by giving shareholders insane amounts of political power.
You can not do a cost benefit analysis of a corporation only based on its income. There are other benefits and many costs.
Taking away the responsibility to all of the shareholders, and to the environment in which we all live, takes critical information out of the the decision making process resulting in poor decision with worse cost/benefit results, even if profits are high.
For example some companies have saved a lot of money and increased profits by letting poisons kill the neighbors. The cost of the poisoning maybe greater than the profits, but if the company is able to off load the costs onto its community its share price goes up.
Corporations are chartered by the states and can not be citizens any more than you can be your own mother. We have to reverse the idea that corporations are people with the rights of humans. It is dangerous.
25
Several readers have commented on the uncertainty of government actions that might impair the future value of Exxon's assets.
They are right to do so but they miss the thrust of the case: once climate change as a result of CO2 emissions is acknowledged as being real, and Exxon has so acknowledged it, then a prudent management has a legal obligation to plan for the strong likelihood of government legislation to curtail CO2 emissions. To do otherwise is to assert that governments will do nothing to avert an environmental catastrophe or will not act to restrict the use of fossil fuels when faced with one. Both positions are absurd.
There does not have to be certainty about the future; if certainty was a requirement no company would ever have to plan for future losses. All plans involving the future are contingent and based on likelihoods. In this case, the likelihood of asset-impairing legislation is very high because the alternative is unthinkable.
8
Not just conning them, but killing them. Ultimately the climate attack Exxon helps foist will claim all who haven't the travel and financial means to go ruin another planet.
That alone should send investors stampeding away from the former Standard Oil, but then look at all the people who outright worship the racist dotard because he's "bringing back" "American" "jobs". For some, the balance sheet is the ONLY measure of value, humanity and civilization be damned.
1
Bravo!
Having started my work on air pollution control in the U.S. Public Health Service in 1966, I can say that this Editorial needs to be read world wide. Documentation that I have provided may help resolve this lawsuit in favor of the people and the planet. Documentation is at
https://www.legalreader.com/50-years-of-legal-climate-change/
2
The title of this editorial should be "Is the AG Conning NY Taxpayers?"
3
Is water wet? Is the sky blue?
If you are an ExxonMobil shareholder you deserve to be conned and defrauded for your failure to do any reasonable due diligence.
MAGA!
3
Of course Exxon is conning its investors, just as Trump is conning the MAGA hat wearers at his rallies.
This opinion piece is conflating two things: (1) whether Exxon misled the public in its financials and regulatory filings regarding its true assessment of the risks of climate change to its core business, and (2) whether it made prudent investment decisions by ignoring the realities of climate change.
The former would clearly be grounds for a fraud and securities civil lawsuit, with even separate criminal implications. The latter is generally considered business judgment, which has safe harbor protections under the current corporate law as long as the management and board decisions are made in good faith and on an informed basis.
Either way the government has a pretty steep hill to climb to prove liability and, almost certainly, it will need one or more "smoking guns" to show intent.
I wish the editorial board made those distinctions clear. In its current form, this article reads like the semi-coherent ramblings of an angry person.
2
Is Exxon conning its shareholders [and everyone else]? Well, duh! The case cited here is useful, if the judges in it can withstand the financial and political pressure from the oil barons and their colleague in the White House. A new wave of anti-trust action, breaking up and regulating heavily companies like Exxon is the real solution, of course.
We learned several years ago that Exxon, once it became certain climate change science was real, invested heavily in denial.
This opens the company open to lawsuits on so many levels investors might come to believe they have the wrong team in charge.
The company might pay out a penalty, but all officers will walk away clean, with no danger of prison.
This is our system - you can burn people alive in a pinto, and like Lee Iaccoca, become a cultural icon
Well our priorities are very clear now. A company can poison the public with pollution and threaten Planet wide destruction and there is nothing done by the courts. However, now that a stockholder may have lost some of their investment our legal system steps up to protect those multi-million dollar investors.
20
This editorial is very important in understanding why the fossil fuels industry is dragging its feet on climate consequences. Much of their wealth is measured on the value of oil in untapped wells that will become worthless when oil is finally relegated to unsustainable old technologies.
Another factor is the cost of doing business; if the taxpayers are actually picking up the costs of cleaning up after these industries (t rump's allowing coal mines to once again dump into our rivers is a case in point) these companies are not factoring the true costs of doing business into their models.
Americans would be outraged to know that their taxes are also paying for our Navy to keep the shipping lanes open and safe for their tankers; putting the real costs of gasoline up to what petrol costs in Europe. We think we are paying $3 or $4 a gallon; we are probably paying $10+.
As Hoyt Axton wrote many years ago, "When it all comes down I hope it doesn't land on you."
1
Under current accounting rules Exxon cannot accrue for costs that might be imposed from future regulations that might be enacted that in total might be significant. Certainly the IRS would not allow a deduction for these costs. At best Exxon could (and now does) have disclosed that these potential costs were possible but impossible to estimate. This disclosure would be buried in the "kitchen sink" list of all the other potential bad things that might happen which investors routinely ignore. This case is a stunt and will do nothing to curb climate change.
3
This whole idea of blaming the oil and gas companies is ridiculous. If we did not demand oil and gas to burn for transportation, electricity and heating (and produce CO2), the oil and gas companies would not produce oil and gas. Thus, we are the ones who are at fault, not the producing companies.
The lawsuit is equally ridiculous. The implicit assumptions in the lawsuit is that government action will impair the untapped oil/gas assets and that the increased heat content of the atmosphere due to increased CO2 will cause catastrophic change. Since government action cannot be predicted with any certainty, the first assumption is clearly specious. While increased CO2 will increase atmospheric heat content, the actual impacts are unclear. All of the predictions of the impacts of increased CO2 are based on models that make numerous untested assumptions (Ex., effects on the earth's albedo, lapse rates, convective cooling, etc.). As such, the actual impact is very debatable.
2
Exxon didn't warn its investors that government agencies would wipe out its profit line due to governmental action to change the weather.
Novel legal approach.
4
It's about time!
Shamelessness, greed, looting and exploitation are not the fulfillment of "god's" promise. They are deadly, and the bill is coming due.
If we don't get our act together, the earth will reject it's greedy apex predator, the only species that takes more than it needs and thinks that's not enough.
4
I was teaching middle school in 1989 when the Exxon Valdez oil spill happened. We are still suffering the consequences of this tragic accident. How many more senseless killings of wildlife, marine animals, destruction of shoreline and ocean habitats must we endure? The companies who are killing our planet should be held accountable.
2
Climate change is real. It has been cycling for eons. Can humans do anything about it? No. It is impossible for us to alter the climate on a global scale even if we wanted to and is sheer arrogance to think we can. The sun puts out more energy in a nano-second that all humans since the dawn of time. A volcano puts out more CO2 in a day than all of the US industries in a year. The only conning going on is the people profiting from the frivolous lawsuits.
3
@George
" the world's volcanoes, both on land and undersea, generate about 200 million tons of carbon dioxide (CO2) annually, while our automotive and industrial activities cause some 24 billion tons of CO2 emissions every year worldwide."
See: Are Volcanoes or Humans Harder on the Atmosphere? From Scientific American
@George And all those wimpy scientists pretending that they know everything... Down with those IQ posers!
This former Exxon shareholder didn't need a lawsuit to decide that the company's management has been executing a strategy that, in the face of increasing, albeit too slowly, global public awareness of the necessity of moving away from fossil fuels, will lead to drastic downward revaluation of the company, probably sooner than later. The same holds true for companies engaged in other industries, but change is not as imminent in those. Savvy, conscientious, attentive investors could do a lot to help put our society back on a more sustainable track. As could such customers.
3
Making us aware of the need to hold accountable the very polluting industries in our midst is very healthy indeed. Short term profits at the environment's expense ought to be a crime, and punishable as such. Although we still depend on coal and oil for our energy needs, there must be an honest effort and contribution to develop clean renewable alternatives, Trump's efforts to the contrary, by willfully denying climate change, are shameful and stupid. And malevolent, given we have ample facts and currently worsening natural disasters biting our behinds already.
5
A lawsuit is needed to prove Exxon is a polluter? C'mon!
4
Ask Paul Krugman! I’m sure his prior ‘experience’ will come in useful here.
2
A clever and creative pumpjack illustration by Antonio Sortino!
1
Greed, lies, no surprise,
A ruling for the plaintiff,
That would be a shock
4
Publicly denying Climate Change is a crime against humanity.
4
Republicans are quite happy to see Facebook become the corporate whipping boy, so I am glad to see the finger put back where it belongs on the fossil fuel industry. Facebook deserves opprobrium, but the threat is not nearly as severe as that from our continued over-reliance on fossil fuels.
3
This is why Democrats will continue to lose elections. The lawsuit pretends to look out for the interest of shareholders, when it is little more than a pretext to peddle Leftwing religion. The man in the street could care less if rich Manhattanites got taken in the stock market casino. Get a real job like the rest of us and you wouldn't have to worry about Wall Street crooks. The working man has a keen nose for snake oil, and this is pure comedy, a crude elitist attempt to pull the wool over the eyes of plebs. In France, Macron tried to impose Leftwing religion, and his subjects are threatening to burn Paris to the ground. Let me get this straight: the state of New York (the carbon (BIG)foot print leader of the world) is suing the source of its poison? Is not this the drunk suing the distillery? And the working man is made to pay for all this with his taxes? I would be surprised if the Robert's Court doesn't put New York in the dock for a frivolous lawsuit.
3
The fact that the AG has not identified can cannot identify even a single shareholder who was defrauded is enough to put the lie to this outrageous lawsuit.
9
@Douglas Levene
I believe if you read the following you will understand the lawsuit better. The isn't just about the single person but how the company defrauded the stock market.
" New York enacted the Martin Act in 1921 to combat fraud on Wall Street, years before the federal government adopted the securities laws used so frequently today. The statue makes it a crime for a person or a company to engage in “deception, misrepresentation, concealment, suppression, fraud, false pretense or false promise.” Unlike federal securities laws, which necessitate showing that a defendant had an intent to defraud or at least acted recklessly, this provision can be proved if a defendant acted negligently. That is a much lower standard of proof."
11
I simply can't imagine that Exxon would lie about anything it is doing. That would be as outlandish as tobacco executives saying that nicotine isn't addictive. Oh, wait.
Never mind.
6
The stock market values the company at about $350 billion, pretty close to the number calculated by it's accountants and reported to financial regulators, and to the public, on the balance sheet.
“Property Plant and Equipment” is valued at $250 billion. All that stuff, more than two thirds of the total, is essentially worthless if the raw material part of it can't be taken out of the ground.
Follow the money! This company’s behavior, buying political influence and spreading disinformation to delay the transition away from fossil fuels, is predictable, and it’s totally contrary to our long-term wellbeing.
Deceiving investors? Not sure. Anybody buying shares has to be a gambler...or blessed with more money than brains. No crocodile tears if either one gets hurt.
1
Bravo!
How much were fossil fuel lobbyists paid over the past 50 years to stop and slow regulations of emissions of air pollutants?
For some documentation of legal landmarks on air pollution over the past 50 years see
https://www.legalreader.com/50-years-of-legal-climate-change/
3
Investors have a preference for being "conned" when companies deliver profits. Generally they're pleased to have plausible denial at the remove their investments give them from the boardrooms and labs. And in this case, they understand that Exxon's assets are in danger of becoming worthless in the ground, so they'll either close their positions or ignore the company's lies.
2
Suits like this are ridiculous. They are not analogous to the suits vs the tobacco companies - who stoked demand by lying to their customers, advertised to kids and tuned their product for maximum addictiveness.
Oil and gas are produced by companies because consumers need it to heat their homes, power their vehicles and spin the generators in the electric grid.
4
@Smokey geo: That "need" is based on the assurance of a plentiful, affordable supply. If any problem with the supply was acknowledged, it would be easy enough to move toward serious efficiency, and alternative resources. We are already doing this a little bit, so we know it's quite possible -- but I mean seriously serious efforts, not just the small steps we are taking. We could have been doing a lot, all these years...
The leftist strategy is that if activists and politically motivated Democrat Attorneys General file enough suits and make companies pay for enough legal talent, and divert sufficient management time from running the companies, they'll bring their enemies down like army ants defeating elephants. Leftists are using the courts as political weapons; left-leaning judges are only too willing to play along.
2
It's pretty clear that the NY AG doesn't understand business or economics. Schneiderman and now Underwood are the modern day Captain Ahab trying to catch the great white whale called Exxon. They will go down looking pretty foolish while the great white whale will go on making money - consistent with the assumptions they use and disclose in their financial statements.
Anyone who thinks regulation will price fossil fuels out of existence hasn't been watching the riots in France over a small increase in fuel taxes.
3
By now, you would think that a rational observer would deduce this much about an American corporate entity (or any entity with lawyers): they will cheat, lie and slander their way through profits and making them look good on Wall Street until they get caught. And then they will just devise better ways of lying, slandering and cheating.
It is childish to ask this question. You should assume the answer to your own question in the affirmative and go about figuring out how to prosecute them.
1
It reminds me of the long row of tobacco executives swearing to Congress that they were unaware that smoking was bad for your health. Avoiding reality is a speciality if it affects the bottom line. America has made a choice to not challenge business and has decided that the public must take a seat behind financial interests. Further, the election of an impulsive, ignorant bully to be President of the United States has send all of these public safety issues into free-fall.
2
It's the planet earth we're talking about, nearly 8 billion humans. We, the US, are 320 million and, excluding airline travel, contribute far, far less than India, Africa, and China. Yeah, go get 'em New York AG.
Bottom line: Buying an airline ticket reveals more than hypocrisy--criminal behavior, right?
2
This biggest culprit in the increase in atmospheric carbon is the Climate Mafia and this paper is the head Don. Why don't we ever read about constructive carbon solutions that are profitable? There are plenty of farmers storing vast amounts of CO2 into the soil increasing net-primary productivity by 7x and raising healthy free range grass-fed animals. Expanded to scale, and yes there is enough arable land to do this, then anthropogenic carbon in the atmosphere can be reduced to pre-industrial levels within 50 years. However, this goes against the neo-Malthusian grain of leftists brains as it would enable population growth to perhaps 30 billions, unlimited meat production, and continued use of fossil fuels.
1
It no longer matters what any person or entity believes or how it acts. Exon is lying. Who knew? I did for one. This only works on the ignorant, or only on folks whose wealth benefits by willful ignorance.
I have posted following many times in the past, time to post again:
Let us focus on the main issue, and less on the kaleidoscopic array of side effects. The facts demand that we take action, although it is likely already too late.
Population explosion: At 7.6 billion, increasing by 80 million annually.
This drives everything. This alone swamps out any and all attempts at 'damage control'. And we are not going to do anything about it. The population of this planet more than doubled in my lifetime. It's all over folks.
Climate change is simply one of many looming disasters.
The Keeling curve currently at 411 ppm CO2 and rising drives the rise in sea level, temperature, and acidity. This is already baked in, and will continue for many decades to come no matter what mitigating attempts are made.
We have already passed a number of tipping points. I'm not going to enumerate these any more. It is an exercise in futility. I will support any person or entity that will do the right things, even though it is utterly pointless at this point.
ps. Need following disclaimer: I'm well aware that the US represents 6% of world's population, and generates 25% of the CO2. It is completely disgusting, it embarrasses me to be identified as an American citizen on this point.
2
And so go the disparaging comments about the oil companies, coming no doubt from some who regularly pilot 5,200 pound SUVs, solo, on a regular basis.
Turn off your lights and TV sets and computers when you’re not using them.
Use fuel (and all forms of energy) efficiently. Teach your children how important this is. See above.
If you utilize air travel when you vacation, be knowledgeable of how many tons of CO2 are discharged into the atmosphere during a typical take-off of your carrier’s airplane of choice.
Global warming has the potential to bring our civilization to an end.
My money is on Facebook getting us there sooner.
1
If your tired of trying to short Tesla, consider shorting Exxon instead.
The time is nigh when the herd will stampede toward greener pastures.
1
The problem is the entire American oil/gas industry.
In token environmental advertising it presents itself as a planetary steward. Ad after Ad deceptive language is used.
We live in a sick society.
www.InquiryAbraham.com
17
The lawsuit is not about fossil fuel extraction or air pollution. It is about accounting rules. At present, FSAB nor any other recognized accounting structure does an adequate job of recognizing hidden, external coats--cf "paradox of the commons". Maybe this suit will produce the beginning of formal recognition of the full costs of any enterprise, including the costs distributed over the rest of society.
I worked for Exxon in an engineering position at the Bayway refinery, my first job out of engineering school. I left after 5 years to continue my education. The generation of peers I started with are the generation now retiring from running the company.
I worked in a field operations position where I got to see what was going on in the entire plant. It was unsafe, dangerous, with poor records of what was going on. Many instruments and gauges did not function properly, and those that did were therefore suspected of giving wrong readings. Such a situation resulted in the plant blowing up on December 5, 1970. Later, I was transferred to an inside engineering job. When anyone tried to bring these major shortcomings to anyone's attention, they were branded a trouble maker.
I have no idea if attitudes ever changed there, but those who looked the other way got the promotions, while those of us who spotted and reported major problems got the door. As those peers are the generation who most recently ran the company, it would not surprise me if the entire management environment was one of denial. If they lied to employees, why not shareholders?
12
@RM
Thank you for this all too familiar and yet invaluable account of your time at Exxon. It is a perfect snapshot of the corporate world that is reponsible for Deepwater Horizon and Valdez.
If shareholders were smarter they would be insisting that the company become more transparent and that environmental and safety issues are given the priority that obviously they warrant in a world threatened by environmental disaster.
3
Yes, indeed, let this case proceed because as this editorial says, it will "provide a rare teaching moment..."
But the most likely outcome will not be a lesson that the Times's Editorial Board expects. It is highly likely that the charges of Exxon's fraud against its shareholders will be dismissed as being meritless.
Instead, the lesson of this case for all to see will be that the NY Attorney General allowed its office used for obviously political posturing and intrude on what should be a reasoned public policy debate. The harm of this blatantly political pursuit will not be to Exxon and other fossil fuel suppliers but to the credibility of the NY Attorney General's office and newspapers that applaud its efforts in a quixotic, intellectually bankrupt pursuit.
4
@Leonard Miller
I agree, and I cannot see how a company that complies with FASB accounting rules is required to show another set of numbers with "proxy costs" included.
2
Meanwhile, I wonder how many people posting here who are eviscerating Exxon, drive a car with an internal combustible engine, heat their homes with natural gas or oil, and/or fly to their vacation destinations.
My guess? 99%.
4
@Erik
And that changes the fact that Exxon's shareholders were adversely effected by Exxon's conduct, how?
5
@Erik Maybe today fossil fuels are unavoidable although 99% was a few years back. But fossil-fuel-free world is not as far away as you fantasize.
Fossil fuels are losing market share daily, not make this hourly. Wind farms are coming on line in Ethiopia, solar farms in Morocco, giant wind farms were just auctioned off in Turkey. Taiwan just entered the race to clean renewable economy at a pace even faster than the mainland. In Europe many countries have legislation outlawing gasoline cars in a decade.
Why do you think the Saudi's are selling oil as if there is no tomorrow depressing the price of oil? Because there is no tomorrow! Hey $50 bucks today is better than nothing tomorrow.
https://www.ft.com/oil
Read article in Financial Times
Crude keeps plunging, and it is not just the the cost of regulation for this toxic product. Remember it is hard for parents to accept a product that hurts their kids lungs from dirty air.
8
@Erik
I am 71 years old. 66 years ago, in urban Northern NJ, I remember many homes and commercial buildings getting coal deliveries for heat. A lesser number used fuel oil. Today, predominant fuels are natural gas, with growing use of electrically powered heat pumps. With a growing percentage of the electricity sourced from renewable sources. 66 years from now, it will surprise me if any non-renewable fuel is used for general space heat.
2
This is what happens when the public walks away from its civic duty and ignores what elected officials and their adminstrtion are doing.
The average citizen is unaffected by such activity and as a result is not motivated to participate in the political oversight responsibility incumbent upon all citizens.
The ruslt: a pack of rabid progressive leftist ideologues holding public office use their positions to aggresively pursue an agenda that is outside their authority, yet remains unchecked.
There is no one - no one - on the staff of the N Y State AG's office who is even remotely qualified to discuss climate science, much less formulate charges and prosecute a court case involving climate science.
1
@Objectivist
LOL (does not mean Lots Of Love)
deflect deflect deflect.
I know Trump likes to act as an imposter (he called journalists before pretending he is someone else.) Are you Trump? If you are not it is the kind of trickery Don the Con loves like...coal.
How HIDING internal information about global climate change, while making public statements denying climate change is not stock manipulation? Exxon is being nailed for braking existing financial laws not because the much bigger crime of killing life on planet earth.
The Attorney General has the expertise to pursue such crimes. Remember Al Capone was thrown in jail NOT for murder, NOT for profiting from prostitution, NOT for racketeering. Al Capone was nailed and thrown in the clinker for ... tax evasion. Trump may go down for this crime as well.
4
Regulations may be inevitable but as of yet, they are not in place. The fact that much fossil fuel will end up staying in the ground is not a legal accounting issue, it’s a share value issue.
If your tired of losing money shorting Tesla, try your hand at Exxon. If your patient enough it’ll probably pay off.
1
@RjW
If you are too patient you will die first.
Existing laws prohibit stock manipulation by hiding from shareholders information shared ONLY internally. Tobacco was nailed for fraud AS WELL for exactly this kind of crime.
1
In an ideal world, the price of gasoline would include the cost of damage to the environment and the cost of a clean up. This will drive the free market people crazy, but it is needed. The oil companies will fight this with every tool at their disposal--bribing congress, trying to bribe scientsts and telling the people that climate change is a fake. The GOP and Trump will help in every way they can.
3
The new federal report on the effects of climate change should present a vital case for Exxon to beheld liable for the damages caused by their products that they made billions of $ on while bankrupting state treasuries to cover the costs. Trump can be a witness or charged as a co conspirator!
1
@REBCO Al Capone was nailed for tax evasion. No need to go after the real big crimes Exxon has committed. I want to say guys in jail NOT just big fines.
Exxon is a heritage industry that did not adapt to the changes of the future. They should have leveraged their enormous presence to advance alternative energy means. They never adapted and now are faced with obsolescence and failure. They were fat and happy being an old industry without innovating. The chances are very good the corporation saw this coming and put faith in their lawyers, a mistake.
4
@Shakinspear The business model of Exxon resembles that of Sears, Roebuck & Co. (Bankrupt last month). Things change, and recently they change at a greater speed. If management isn't looking out the window, this can happen to any company.
Lets be very clear. This case is a politically motivated witch hunt and nothing more. It will be thrown out of court as the other merit less lawsuits have been. Exxon is not heavily culpable for climate change and its consequences. We are. If New Yorkers don't want to to use fossil fuels then don't. Ban it. Pass legislation that prohibits the importation of oil and gas into your state. Stop whining, stop bringing frivolous cases and take some responsibility. Stop using fossil fuels. I'm sure you could power NYC using clean fuels for what- a day or two maybe. Then while we sit back in our comfy homes we can watch this progressive fantasy blow up in your face. Here's the bottom line for those of you who still have a toe in the real world. We & (the world) will continue to use fossil fuels for the foreseeable future. Maybe less but still in massive amounts. It's baked into our energy grid. It can't & won't be eliminated overnight. That will take decades. We continue to rip as much oil, coal & gas out of the ground as possible. And if our own green policies mean there isn't a market for these fuels at home, then no matter: they will be exported instead. The US is extracting carbon & flowing it into the global energy system faster than ever before. We're trying simultaneously to reduce demand for fossil fuels while doing everything possible to increase the supply. Can we bring ourselves to prioritize renewables over cheap fuels? Absolutely not. It's never going to happen.
4
@Bill Brown Amen brother!
This is a legal case about how Exxon should account for regulations which may arise in the future in valuing the worth of its holdings. It is not an argument about whether companies should continue to extract fossil fuels, nor an argument about how companies treat their employees, pay their managers, or market their products. It would be an interesting exercise for readers to make two columns, and in one count the number of posts which deal with the actual legal issue, and in the other count the number of posts which are about either either our dislike of "big oil" or our general concerns about global warming.
3
@Pete
Yes, I find it interesting how many comments on this story defend Exxon, echoing both its legal strategy and its ad hominem attacks against the New York AG's office. Who knew there were so many fans of Exxon and its legal case? Let's make two columns and compare the pro/con comments against other climate related stories in the NY Times.
Robber Baron John Rockefeller founded Standard Oil in the 1800's, eventually owning much of the oil business in America including unrefined oil, refineries, and gas stations. One of the first, most powerful, and anti-democratic corporations ever, he was literally the richest human who has ever lived. It was broken up finally as a dangerous monopoly with too much economic power. It's initials? - S. O. It became Esso, which is today's Exxon. We did not go far enough then. To paraphrase, greed is not so good.
3
Matthew 7:3:
And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye?
Liberals want to sue Exxon Mobil for drilling for oil. Yes, pollution from autos causes global warming which makes catastrophic weather events more likely. Eventually, many of the US cities, Miami, New Orleans and Houston, will be submerged under water as sea levels rise.
But what is causing global warming? Is it the use of fossil fuels, or rather the number of people who are using fossil fuels?
World population has doubled since about 1970. In 1968, Paul Ehrlich published the Population Bomb. and Garrett Hardin published a similar essay on the tragedy of the commons.
These works argued that population growth on planet earth was unsustainable. One eventual consequence would be starvation.
But starvation occurred in places like the Sudan, not the US.
So journalists and politicians alike regarded those who argued to limit population growth as crackpots, or worse. Garrett Hardin was characterized as a purveyor of hate speech by the Southern Poverty Law Center.
Why didn't starvation occur? Part of it was the Green Revolution, new more efficient ways of growing food, based partly upon oil, got from the ground by Exxon Mobil and others.
We should not look toExxon Mobil for formulation of policy.
But effective policy requires free and open discussion.
Liberals have too often labeled those fighting population growth as racist.
@Jake Wagner you make some very important points about the unsustainable population growth on our plant that is increasing our use of fossil fuels. This growth in population is also causing many other issues, and as you so correctly observed, starvation and hardship in parts of our world that result in wars and mass migration.
I do take exception to your comment, "Liberals have too often labeled those fighting population growth as racist."
It is very apparent that part of the Republican party's agenda is to reverse Roe Vs. Wade and to make access to birth control more difficult. "Liberals" strongly support access to reproductive choice not only in the US, but throughout the world.
"That which can be done will be done." The "technological imperative" as a freestanding force.
Max Weber's circa WWI caution about technology and humanity . . .seen clearly from Hiroshima to fossil fuels. And our destruction of humanity enriching creatures, like our polar bears, who had and have no power to change their ultimate demise in unimaginable habitats.
Beyond sad. Beyond disgraceful for those of us who should have done more and not strapped our kids and grandkids with the consequences of acts and failures to act . . .
1
NY Times: ...thanks to the judge, we will have a window on the world of the old fossil fuel companies that for generations have powered the global economy but that are now held heavily culpable for climate change and its consequences."
NY Times:..."Nor does the suit hold the company responsible for climate change, unlike several cases against the fossil fuel industry brought by New York City and other localities seeking damages from the rise of sea levels and other consequences of a warming world. Most of these suits have been thrown out of court."
So on one hand the Times is saying that the fossil fuels companies have been found culpable for the consequences of climate change yet in the same article it says that most of the suits holding these companies responsible for the consequences of climate change "have been thrown out of court."
In its fevered cheerleading of the idea that fossil companies are the villains in the story climate change, the Times dispenses with consistency and neglects the conclusions of sober judicial analysis.
Let's be clear, unable to make a charge of anti-social behavior stick, the pursuit of Exxon has had to be morphed by the NY Attorney General into a disingenuous championing of Exxon's shareholder's interest. What a shameful political act it is for the judiciary to intrude into what should be a reasoned deliberation of public policy.
3
Don't think Exxon has much to fear in terms of investor fraud. Exxon has over the longo haul performed at about the same level as the overall S&P 500 index. Only in the last year has the overall index surpassed Exxon and that probably has more to do with crude oil prices than anything else. It pays a nice dividend and has historically increased that dividend since the 1970's when Exxon supposedly became aware of climate change but supposedly hid the impact from investors.
And what fraud are we talking about? The demand for fossil fuels increases worldwide. Eventually we will run out of oil -- but any investor in oil companies knows this. How to account for this? It's a risk, but only a very long term one.
The NY AG's office obviously has little constructive to do and wants to inject itself into every political issue in order to political support.
Would I buy XOM today? Sure. It pays a nice dividend as noted, the stock price has dropped and over the recent time period so there's a good chance it will rebound some In the interim, I collect the div and can sell options against the shares and make more $$$. Would it be my top investment choice. Probably not, but it's not a bad choice for a few years -- although I wouldn't intend to hold forever. But then again, that's true for any stock.
2
No amount of research, press, or frivolous lawsuits will change the fact that American voters do not and more importantly will not pay more for energy. Voters are the ones who vote governments in or out, not lawyers. The overall reality is that climate change legislation is hard to pass even in good times. It's really a killer in an economic downturn where citizens & business fear higher costs, even slightly higher costs, & may see no concrete benefits. When climate policy starts to hurt economically, even the greenest states will back away. When policies on emissions reductions collide with policies focused on economic growth, economic growth will win out every time. That is the inconvenient truth in a democracy. Are we willing to vote against our own self interests & approve higher taxes on fossil fuels? No. Can we muster the restraint needed to leave assets worth trillions in the ground? No! It's delusional to think this is ever going to happen. We can't & won't stop burning fossil fuels...at least for the foreseeable future. They are relatively inexpensive & a major factor in the low cost of U.S. electricity. If we were simply forced to generate power through only clean methods at this point, there would be rolling brown-outs and power curfews like there are in 3rd world countries. The American public won't stand for this under any circumstances. While many people are in favor of alternatives they also want those alternatives to not compromise on their lifestyle.
6
@Bill Brown The French are pretty much the same. They're actually rioting over the issue.
@Bill Brown - "When policies on emissions reductions collide with policies focused on economic growth, economic growth will win out every time."
But that ain't the deal, Bill. That's the "protecting our environment = reduced economic growth" boogeyman floated by the energy companies whose vested interests encourage continued use/waste of energy.
"Policies on emission reductions" encourage reduced consumption/waste of fossil fuels which saves us all - individuals, companies, governments - money, reduces pollution, improves national security. There is no downside to the emissions reductions resulting from reduced use/waste of fossil fuels, unless one is, or one is invested in, the fossil fuel industries.
A monetized economy that takes no account of the risks to the great environmental systems the underlie all life on earth is the very definition of fatal flaw. Corporations that invent disastrous fictions and are not punished for lying grow bolder in the quest for short-term wealth. We can all see what's happening, yet corrective measures are not just ignored; they are worsened by the rush to deregulate the very statutes that could lessen or eliminate the risk. Only coming to our senses and taking aggressive actions will prevent a horrendous future.
3
How noble of NY's Attorney General to take up the cause Exxon's shareholders claiming they have been defrauded in not accurately predicting the future worldwide demand and supply of oil. It is equivalent to saying that Exxon has not been forthright in predicting the future price of oil. What nonsense.
In the 1960's Exxon's predecessor made commitments to the solar business and nuclear industries in looking for projects 30 years in the future. Subsequently they sold their interests when the demand did not unfold as they predicted. Perhaps NY's Attorney General should sue not only Exxon but all the companies who have made a commitment to the nuclear industry, only to suffer losses by their shareholders as a result of the nuclear industry being thwarted by environmentalists.
4
@Leonard Miller No, the argument is that they DO have the data to predict it, they're just choosing to ignore that data because they want greater profits today.
4
@Leonard Miller
Longstanding SEC regs require a publicly traded company to identify and disclose all risks to its enterprise present and future so investors can make intelligent and informed decisions. What nonsense?
Dear @Leonard Miller Are you not understanding or are you willfully deflecting?
Exxon is sued for saying one thing about global climate change in internal communications and a different publicly. If global climate change has an impact on trading in fossil fuels such as oil, which it does, then Exxon committed shareholder fraud pure and simple, by misinforming investors.
What is the difference with the tobacco companies that also were caught red handed in internal communications acknowledging tobacco products harm health but denied it publicly? Philip Morris Inc., R. J. Reynolds, Brown & Williamson, and Lorillard – had to pay through the nose for shareholder fraud (among other crimes) and now so does Exxon.
The editorial's last paragraph sums it up: this case has nothing to do with arcane accounting processes that can overwhelm even a CPA. It is really aimed at getting Exxon out of the fossil fuel business. As such, it is a fraudulent use of taxpayer money and lawyer's time. Probably no surprise given the lack of character of persons elected to the NY AG position.
2
@JPE You say:
"lack of character of persons elected to the NY AG position"
This is classic Ad hominem attack. Accusing someone for "lack of character" but not providing any evidence, provides solid evidence of lack of character. JPE your words raise questions about YOUR lack of character rather the NY Attorney General. Since the message is solid, JPE you attack people for lack of character attacking the messenger hoping to deflect attention from the merits of the message, the evidence.
Exxon was caught red handed giving information publicly to investors different than the information communicated internally, hiding looming problems for trading oil. Exxon is being nailed for fraud, which is a crime based on the evidence NOT the character of the person exposing the crime. Furthermore exposing a crime shows good character not bad.
I am sure the tobacco companies complained about the character of the guy who spilled the bins on them. He should have received a Peace Nobel for contributions to public health.
If the NYS attorney general really wanted to do something helpful in the fight against fossil fuels it would investigate the NY state governor's office for its mismanagement of the MTA and the NYC subway system. Instead of using the subway, millennials would rather use UBER or other ride hailing services which increase congestion and pollution-and I don't blame them. I take the subway but I find the stations dingy and smelly. Many of them seem like that haven't had any maintenance done on them since the 1930's. Almost none of them have restrooms. In the summer the temperatures in the underground stations are unbearable- yet no one is held accountable. Sue the governor if you want to help us.
I have no way of knowing if Exxon's claim that they are trying to get fuel out of algae or if their research on carbon capture is just PR but if they truly are serious about it, it sounds useful. In a country where there still aren't enough charging stations to convince me to buy an electric vehicle I would tell them to go for it. The money they have to waste on lawsuits would be better spent elsewhere.
7
They're running a cute ad talking about deriving energy from green slime - the key takeway is Green. I'm tired of this PR BS from Exxon after all their obfuscation on fossil fuel effects on global warming.
4
Amazing that focus for discussions still is on fossil fuel, since there are so many transitions made already into commercially viable production and sales of renewable fuel. Europe has it, and it is booming there . Why cannot we look a the Europeans that already has both existing rapidly growing sale and methods for production and distribution in full operation. Just wonder. European truck manufacturers have approved these alternative fuels with no reservation for use in their engines. Price is competitive, and network of gas stations is increasing rapidly.
7
@Jordan Wycombe
Why cannot the U.S.make a transition into renewable fuel,you ask ?
Because of the fact that America is very much more backward than people think and also is deeply stuck,stuck, stuck in money-making as be-all and end-all of its existence.
"And so it is and will be with these companies. They can carry on, extracting coal and oil and gas from the ground, exposing the world to the ravages of climate change. They can slowly transition from these dirty fuels. Or they can aggressively adopt a different, cleaner path."
NYT, Please refer to the graph of past and projected domestic energy consumption mix on page 9 and suggest a 'cleaner' path: https://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf
We are stuck with fossil fuels as the dominant energy source for the forseeble future, because it's the cheapest and it takes time and money to transition to alternative sources.
3
@PKW - Change your life. Work from home. Ride a bike. Take a bus. Become a vegan. Buy used clothing.
And do it all 50 years ago, because that's how long I've been hearing about the "foreseeable future".
2
@PKW Please don't confuse NYT readers with facts...it will lead to mass depression in Manhattan. They won't want to know about Germany's large and increasing use of coal for electricity production, instead insisting that German electric power now comes from nature.
2
@Skeexix - And if these examples of how to reduce energy use/waste don't work for you, dear readers, there are many other options. Small, mindful changes = big results, if each of us care enough to make the effort.
1
One of the long term problems in American litigation has been that polluters find myriad ways to avoid liability for the pollution they create. First and foremost has been bankruptcy. As when Kepone polluted the James river in the 1970s, a simple bankruptcy prevented the base company or its parent companies from being held liable. A result of that failure of liability law to protect this state of Virginia was the creation of the Superfund law which has since used tax dollars instead of corporate liability to recover damages for pollution and remediation. Your tax dollars at work.
Oil and coal have for 50 years successfully defended themselves from the idea that carbon dioxide is a pollutant. We now know it is directly contributing to climate change. It is high time that our laws and our courts encompass the idea that polluters, like other deliberate poisoners, should be liable for their pollution and for the costs and damages associated with it. We finally figured that out with asbestos and mercury. The only reason it is taking so long with coal and oil is that there is so much money and political power in play. We can solve these problems quickly as soon as there is a national will and as soon as courts are willing to rule accordingly.
22
Aggressively adopting "a different, cleaner path. That is what this case is ultimately about."
Actually, the case goes deeper than that, existentially. It's about confronting the source of nearly all political power, all wealth, all economic expansion on our planet for over 100 years as also the source of the destruction of said planet.
The great drama now is witnessing whether it's too late even for an aggressive change.
19
The U.S. should immediately broaden the definition of the Shareholder to the Stakeholder, thereby including employees -- who should have representation on the board -- and the communities -- who also deserve board representation -- and all the constituents that their corporate activity impacts. Within a fiscal year, all corporations could be stripped of their nonsensical all-purpose excuse of "in the interests of our shareholders" which my secret decoder ring translates simply as "in our own interests".
13
@Kerry Leimer -- Milton Friedman took a shareholder approach to social responsibility, in his 1962 book. This approach views shareholders as the economic engine of the organization and the only group to which the firm must be socially responsible.
That took a long time to catch on as dogma. It is not inherent in the SEC or securities laws. It is a political philosophy. It is now discredited in many other respects. Yet this hangs on, a mantra repeated endlessly without examination, as if it is a truth revealed and beyond question.
Friedman maintained that the shareholders in their private capacity are the ones with the social responsibility. There is no reason for us to accept that philosophy as the fixed doctrine of American politics or capitalism.
9
@Mark Thomason
Endless court cases and statutory law enshrine "in the best interests of the shareholders" as the guiding precept of American corporate law. It goes well beyond opinion now.
Too late now. The damage is already done.
The Swiss once owned the watch market until Japanese Swatches flooded the time-pieces market with stylish, cheap time devices - using electronics, became vogue.
We refer to the turn of events as a turning point or "point of inflection".
The U.S. is undergoing a similar point of inflection. Business-political ethics is being challenged instead of taken for granted. The merger of politics and big business was sealed through the avarice of lobbyists and their clients, including Exxon, was a wake-up call.
The next 1-2 weeks, we should be hearing from Robert Mueller's team with a list of documents that will form a (likely) serious report on the Russia-election claims that will speak truth to power that will further split a divided nation.
If Exxon got away with "conning" it's stakeholders, it should face the music. A corporate regime change should be in play, in addition to a record-breaking fine.
American voters have a clear choice in 2020. They can ignore the ethical principles embodied in the Constitution, or restore faith in the rule of law that had Made American Great in the first place.
12
@Bob Aceti -- The Swatch is Swiss, and was a major part of their fight back against Japan to save their place in the watch industry.
My point is not to quibble about the Swatch, but to see by analogy that it is possible to fight back, to gain back ground. That however requires a commitment to do it, and a serious effort, like the Swiss rethinking watches and taking a new route.
9
@Bob Aceti
Republicans, like Christy, who had greater use for Exxon funds than the people of NJ, dumped a case for clean up that had built for years through Governors of both parties.
Sort of like his use of their public parks, it was all about him.
Surely, we should not wonder that Trump wants the little piggy back at work.
@Bob Aceti This article says "much of a Swatch" is made in Switzerland - some parts are made elsewhere....
https://www.nytimes.com/2012/04/28/business/global/swiss-watch-industry-seeks-to-tighten-requirements.html
The Rockefeller Family Fund (RFF) had concluded, in 2016, that ExxonMobil was conning investors. A timeline shows that they had acquired sites that, if developed, would have conflicted with what they knew about climate change from their own research. They made some bad investments and hoped to get away with them by creating and marketing a more innocent image of themselves so, from a investment perspective, they wouldn't be found out. Well, their villainy is quite plain and we thank the RFF and the NYS attorney general for unclothing it.
31
Hopefully, the judge will allow the trial to expose EXXON's accounting practices. However the trial turns out, it will be a teaching moment.
15
@Frank McNeil Yes, it will show how state AGs abuse the legal system.
it's worth noting two important things. 1) There are 1.687 trillion barrels of oil left on earth according to the 2014 BP annual report: a 54 year supply; 2) we burn about 60 percent of the oil we extract, the rest goes to making things like synthetic rubber (7 gals petroleum for one average car tire). No matter what there will be a big market for petroleum and coal for decades to come all from non-ground transportation demand. Sadly, there's no alternative for jet fuel and someone ought to be thinking of how we fly coast to coast at the end of the century if we waste oil today on ground transport. So is Exxon conning its investors? This piece only scratches the surface.
12
In the 70s, 80s and 90s we were told we would be running out of oil soon or soon-ish. The price of a gallon of regular where I live is now $2.15. In the late 70s we were paying at least 70 cents a gallon. What product is only three times the price we paid for it 40 years ago?
They will keep finding more oil. If there was a real chance of running out of oil we might figure out how to kick the habit where possible.
2
@Duane Coyle
"THEY will keep finding more oil.."
Who is "THEY" ? Some people you hope will suddenly appear with magic wands?
And why are you thinking only of the money you can save,rather than the degradation of planet Earth and all that lives on it ?
Be part of the solution : Get together with others and work for change !
". . . when making its business decisions." Exxon's only business decision is always to maximize immediate profit. Period. Full stop. Fini.
16
Of course it is. Even worse, Exxon- along with other fossil fuel companies- has been conning the public, too, via contributions to denier websites and pretend scientists. This is criminal activity, and needs to be prosecuted.
Our leadership understands these facts, including many Republicans. What they lack is a backbone, and willingness to forego a little more cash in exchange for giving us hope that we have a future. The fact that this is apparently a difficult decision does not give us much reason to be optimistic.
27
I am pretty sure that Exxon's investors are perfectly fine with destroying the planet and denying the affects of huge CO2 releases. Just as those who invested in Tobacco were aware and the people who invested in GM when they were selling lead into gasoline were aware of the truth. Investors are not particularly moral people.
47
@Chris
Methane is a much bigger problem. Farms world wide. Where are lawsuits bringing in the cows and friends?
1
@Chris. We’re all investors today. Do you have a 401K? You’re an investor. Have a IRA or a 529 fund for your kid’s college? You’re an investor. Have a mortgage? That’s part of someone’s investment portfolio. Wall Street’s tentacles reach far and wide.
1
Alice,
It is being worked on and acknowledged.
Simple Google search...
https://civileats.com/2015/01/30/environmental-groups-to-epa-curb-factory-farm-air-pollution/
https://www.theblaze.com/news/2016/11/30/california-just-passed-a-law-regulating-cow-farts
I think this is why their subsidiary Synthetic Genomics is set up to explore genetically engineered algae to produce biofuels for the future. This program is often described in self-serving ads on TV to suggest that Exxon is working on environmental health. To my thinking this program is a lot like DuPont's initiative to promote environmentally safe chemical engineering in spite of the fact that DuPont is one of the worst polluters of our environment.
12
As a person who associated with oil&gas offshore projects of TOTAL,BG,BP, Shell and ExxonMobil on behalf of ADNOC group companies more than two decades, the stringent HSE
audit,I have experienced were from giants,Shell oil&gas and ExxonMobil Development in Abu Dhabi,UAE.
I could experience a very high standard of HSE audit with
Mr.Joe Hill,safety advisor, ExxonMobil Development,Texas. Both Shell and ExxonMobil were genuinely estimated the emission levels including the exhaust from the equipment we used in the project. Is it possible or practical to achieve the theoretical material balance industrially? Zero emission control of the substances that contribute global warming is our ambition but a minimum permitted level is the pragmatic approach. The aim of IAEA is zero radiation on any NDT but to ensure that the radiation level not exceeding 'x' mSv in the field is an industrially pragmatic approach. Bureaucrats versus Technocrats, a continuing story in the industrial field to make this world a safer place to live on but not at the cost of mainstay of the economy.
4
@N.R.JOTHI NARAYANAN I'm giving this an upvote, not because I understand much of what he's saying, but that it is the least political of any of the comments I've yet read.
But he's right. It is bureaucrats vs technocrats. And it is going to be ugly and incomprehensible.
1
So far, there are no airplanes that directly use renewable energy. The vast majority of vehicles and heavy machinery still use non-renewable energy, while more efficient hybrid vehicles slowly come online. Power plants are making progress incorporating wind and solar sources into the grid. Exxon is not hyping a useless, harmful product, like tobacco. Their harmful hydrocarbon products are used by virtually everyone in this nation, and beyond, in order to go to work and school, heat and cool their homes, use their computers, and fly for business, family, or pleasure. It’s currently a supply and demand situation, not an evil behemoth foisting Faustian products on helpless innocents. Exxon and other energy giants, as well as governments, are deeply invested in accelerating the practical production of renewable energy, as they know that is inevitably the future and they want to be the leaders. Sure, there are dimensions of greed, misleading investors, etc. that are present, as in all big for-profit companies (e.g. Facebook, Google). Those protesters against climate change and fossil fuels who have turned in their cars for bicycles, ceased to fly, and use wind and solar for their homes, computers and phones have my full respect. The others are on one rung or another of hypocrisy; e.g. ‘I continue to fly to meetings to spread the anti-fossil fuel protest. The ends justify the means’
20
@anwesend, It is not true that "Exxon and other energy giants...are deeply invested in accelerating the practical production of renewable energy." According to a Reuters article from 12 days ago, Exxon spent 0.22% of its capital expenditures on low-carbon initiatives in the period from 2010-2018Q3. If they were serious about renewable energy, Big Oil could have made a huge difference already, but they are not, and have not been, supportive of a better future.
10
@anwesend
To suggest that people who protest climate change or the malfeasance of corporations like Exxon are hypocritical unless they give up driving, flying, using computers, etc. is just plain silly. The global problems created by climate change aren't solved by single individuals giving up driving, any more than the problems themselves were created by single individuals. We all live in a culture dependent on fossil fuels. Solutions will take broad national and international cooperation
4
@anwesend. Funding fake climate change deniers seems to me more harmful than peddling tobacco or even opioids, as our entire planet is harmed by refusal to confront climate change.
4
I keep seeing "sponsored content" from Exxon on the main page of my nytimes phone app. Things such as "you'll never believe where your future energy sources are coming from!" The advertisements are designed to look like stories, but are identified as having been paid for by Exxon. They keep trying to tell us they are the good guys. If you have to tell me you are a good guy, then you probably aren't. I have to believe my fellow readers also see it for what it is, which is somewhere between distraction and propaganda.
12
That's like suing the state of Nebraska for allowing cattle to graze on public land when it is fully aware that methane gas is more of a problem than CO2, and the airlines for misleading their shareholders by knowing that distributing tons of carbon by the minute at thirty-five thousand feet is unquestionably contributing massively to "climate change".
Criminal behavior by any measure--even for those who buy shares in these companies, and worse, use the product knowing what the airlines are doing to the atmosphere when they are flying around at altitude.
And let's not forget that China and India Inc. contribute far more fossil fuel pollution than the 30% combined the EU and the US does. Seems the real bad boys are out of control when it comes fossil fuel pollution.
And then, of course, there's God. He clearly should in there somewhere for allowing such a thing to happen in the first place. He obviously knew what was coming down the road, so to speak, but did nothing to prevent it.
It would seem the fusillade of fossil fuel suits has just begun. New York's AG office needs to up its game by orders of magnitude.
10
"And so it is and will be with these companies. They can carry on, extracting coal and oil and gas from the ground, exposing the world to the ravages of climate change. They can slowly transition from these dirty fuels. Or they can aggressively adopt a different, cleaner path. That is what this case is ultimately about."
The New York Times burns fossil fuels to run its offices and its computers, to print on and distribute paper, and to send correspondents flying around the world to cover the news. Without fossil fuels, this for-profit business would not exist. Why does responsibility for climate change lie with the extractors rather than with the consumers?
12
@Joey
In being aware of that the use of fossil fuels is causing climate change it seems that the NY Times company and even individual members of the paper's Editorial Board in their use of fossil fuels are "culpable for the consequences of climate change." It would provide "a rare teaching moment" if the NY Attorney General brought suit against the NY Times for, in their use of fossil fuels, the Times was culpable for the consequences of climate change.
So what would be the Time's possible response? Is it that they have no other choice but to use fossil fuels and it is the suppliers of the fossil fuel energy that are to blame? Perhaps they would say that Exxon and others should not be dedicating their resources to supplying fossil fuels but should be supplying renewable sources of energy. Or perhaps the claim is that Exxon and others have been purposefully thwarting the advent of alternatives to fossil fuels, if by nothing else, keeping the price of fossil fuel energy down.
The Time's and its Editorial staff should defend their contributions to the consequences of climate change by defending their implicit charge that "the fossil fuel suppliers have been making us do it." The dependence on fossil fuels can be thought of as a phase of the world's long-term technological evolution and the charge would have to be made that the worldwide fossil fuel industries purposefully acted to slow this evolution down.
1
What this case is ultimately all about is incredibly difficult to discern from this editorial. Is NY state suing as a shareholder? If not, are they suing for damages for the manner in which Exxon conducts its business? What gives NY standing to challenge the way they conduct their business, unless it is unlawful. But this is reported to be a civil suit, not a criminal one. The board assures us that it is not a suit to collect damages for climate change. So please explain the basis for this suit. One hopes there is one since it got this far.
1
@James Ricciardi
Sheesh. NYS is suing for material misrepresentations on securities filings. It claims Exxon knew one thing and said another. This is serious business. NY's centrality as a securities market depends on its policing of these statements. For a bet, it also includes allegations under the Martin Act.
24
@publiusWow! So when N.Y. wins, and assume it gets a $100 billion dollar damage award, Exxon corporation writes a check to whom for the benefit of whom? There are no large founder shareholders of Exxon, only diverse mostly institutional share holders.
@publius
Isn't that the job of the SEC? Even NYC does not identify climate change as a key risk in its securities' filings. Why isn't that a material misrepresentation by the City of New York? Or is this just another headline-grabbing, money-grubbing lawsuit?
1
The case will affect all major oil companies as it may be just the start of effective valuation of assets and their cost of extraction. The conclusion that a large portion of the world's reserves of fossil fuels must be left in the ground has led to concerns about the risk of these reserves becoming “stranded assets,” and creating a dangerous“carbon bubble” with large impacts on global financial markets. There are just over 40 investor-owned oil, gas, and coal companies holding reserves with potential emissions of 44 GtC. Global reserves data concludes that one-third of oil, half of gas, and 82 to 88% of coal reserves must remain unused to 2050 (McGlade and Ekins, 2015). Analysis of many oil and gas producers’ capital expenditures highlights the vulnerabilities of their highly valued assets if restrictions on carbon emissions are put in place. Let us hope its case proven. Insurers are already acting refusing cover to the sector (FT 9th Oct 2018). Insurers who have insured oil companies for general liability may get caned.
"In an unprecedented step for a regulator of a global financial centre, the BoE’s Prudential Regulation Authority will on Monday October 15th tell boards of banks and insurers to identify a senior executive to take charge of managing climate-change risks and report to the board — or face consequences."
(sources plundered Naomi Klein, Heede&Oreke, Ploeg&Rezai FT)
4
The answer is of course NO, who is conning their investors is the state of New York who is forcing corporate resources to be wasted on defending idiotic things like this.
14
I am a liberal, I believe in climate change, I try minimize my carbon footprint, I believe that mankind should move away from energy sources that are carbon intensive and adopt renewables across the board.
Having said the above, I also believe that this lawsuit is a palliative at best and not constructive at all. Big oil companies are tanking steps towards renewables, turning a “ship” as big as XOM is not easy.
Let’s vote for candidates that will improve America’s regulations, toughen emissions standards, incentivize electric transportation; but let’s refrain from finding and singling out a scapegoat.
18
@Agnelli
Did you have the same opinion about the Big Tobacco lawsuits? That they weren't constructive, and that suing for the astronomical medical costs associated with tobacco use - passed along to consumers and to the federal and states governments - was "palliative at best and not constructive at all"? Big Tobacco knew about future costs and hid that information from the public and its shareholders, just as Exxon and other oil companies hid their information.
I completely agree with you that we need to do all the other things you suggest. But we also need legal remedies against Big Oil just like states got against Big Tobacco. Nothing but money and bad publicity will get their attention.
13
@jrinsc
Tobacco is not a vital component of everyday life in every single home, industry & business in the USA and around the world. Petroleum products are in an entirely different category. Plus, this suit seems based upon ‘what-if’ propositions about government regulation at some unspecified date in the future. Sure looks like a political/publicity move for the NYS AG and others, rather than a serious suit. This $$$ should be used to fix NYC’s subway system!
5
@Sharon Snyder
It may indeed be a meritless case. But you are echoing Exxon's ad hominen attacks against "interest groups and Mr. Schneiderman, a politically ambitious Democrat." Big Tobacco used the same tactic against states' AGs. The case isn't about the political motivations or ambitions of the person/agency bringing it forward.
Let the lawsuit proceed on its merits, and let's see how it plays out.
1
I am always amazed at these large corporations with their American flag lapel pins, who in the face of overwhelming scientific evidence from both within and without the company choose to obfuscate and litigate instead of asking their scientific staff to find a better way forward.
60
Exxon has lost 25% of its share value over the last 5 years. With an expanding economy and demand high, one would expect the share price to rise?
Could it be that shareholders are already aware of the shady financials of the company and impact that climate change will have on them.
Overstating the future revenue and assets of the company have already made a big dent in shareholder value.
8
@cherrylog754
WTI Crude oil prices are down 40% over the last 5 years. XOM's price is still tied to oil prices. Exxon's price drop is simply tied to an oil glut.
13
Our former Secretary of State was head of Exxon at one time and said he realized there was global warming, but that we could take care of it technologically when it got really bad.
I think that must be the opinion of many people. One plan is to send up thousands of reflectors to stop the sun from hitting the earth. There may be others in the works.
I am not very optimistic that our lives 50 years from now will look much like life today; but then looking back 50 years not much is the same.
1
@a reader. With respect, why would anyone think that sending up thousands of 'reflectors' would be a better idea and present less risk than cutting back on the use of coal and oil?
3
Exxon knows we're stepping up use
Of Oil and Coal, unleashed abuse,
The future is bleak
Profits shant be weak
And science reports? Just a ruse.
A Scientific Report
That get’s a derisive snort
From the Goop at the helm
Two words overwhelm
His mini-mind of an odd sort.
Once the dumbest kid in his class
Choosing Scientists to harass
A would-be dictator
Mental seventh-rater
Who sits across the Progress Pass.
42
Your meter is absolutely terrible, as usual. I really wish there were a downvote function on these comments.