Exxon probed by New York in toughest U.S. climate crackdown yet



WASHINGTON (Bloomberg) -- New York’s decision to probe climate change disclosures by Exxon Mobil Corp. marks the most aggressive state action yet on the financial effects of burning fossil fuels.

New York Attorney General Eric Schneiderman issued a subpoena to the company on Wednesday seeking a lengthy list of documents and disclosures, including communications with trade associations and industry groups, according to a person familiar with the matter, who asked not to be identified because the probe isn’t public. The request seeks information dating from the 1970s to the present, the person said.

The investigation is seeking information on whether the world’s biggest oil explorer lied to investors and the public for almost 40 years about the impact of climate change on profits, the person said. As a manufacturer of 10 million gallons of gasoline and other fuels every hour of every day, Exxon is one of the world’s largest sources of carbon-heavy energy. Environmental activists cheered New York’s action, calling for more agencies to join the probe.

Schneiderman “is leading the charge to further expose the hypocrisy of fossil fuel companies like Exxon Mobil and hold them accountable for denying climate change to the public and blocking necessary action for decades,” Greenpeace spokesman Rodrigo Estrada said in an emailed statement. “New York has taken the first step, now other attorneys general should follow suit to protect the rights of the American people against big polluters from lying to them about climate change and its impacts on our communities.”

The probe follows a series of investigative articles by Inside Climate News and the Los Angeles Times newspaper during the past two months alleging Exxon’s scientists discovered evidence that man-made emissions were damaging the climate as far back as 1977.

The reports spurred calls for investigations by a panoply of politicians and activists from Democratic presidential candidates Hillary Clinton and Bernie Sanders to Al Gore and U.S. Representative Peter Welch, a Vermont Democrat on the House Oversight and Government Reform Committee.

‘Reject’ Allegations

Scott Silvestri, an Exxon spokesman, said Thursday in a statement, “We unequivocally reject allegations that Exxon Mobil suppressed climate change research contained in media reports that are inaccurate distortions of Exxon Mobil’s nearly 40-year history of climate research.”

Long a hard-line opponent to climate-friendly carbon limits, Exxon began to soften its outlook and embrace the need to curb greenhouse gases in 2006 when Rex Tillerson succeeded Lee Raymond as chairman and CEO. Since 2009, the Irving, Texas-based company has advocated a revenue-neutral carbon tax as the fairest way to cap harmful emissions.

The company’s $35-billion takeover of XTO Energy in 2010 was inspired in part by expectations that stricter climate rules would spur natural gas demand as a replacement for dirtier coal.

Exxon Mobil General Counsel Kenneth Cohen has been waging a public-relations battle since mid-September against the accusations. In a series of blog posts on a website known as “ExxonMobil Perspectives,” Cohen said “anti-oil and gas activists” had “cherry-picked documents” to distort the company’s role in climate research.

Exxon Research

“Our scientists have been involved in climate research and related policy analysis for more than 30 years, yielding more than 50 papers in peer-reviewed publications,” Cohen wrote in a Sept. 16 post on the site. “They’ve participated in the United Nations Intergovernmental Panel on Climate Change since its inception and were involved in the National Academy of Sciences review of the third U.S. National Climate Assessment Report.”

Damien LaVera, a spokesman for Schneiderman, declined to comment on whether a subpoena was issued.

New York is examining whether the company may have violated state consumer protection law or the Martin Act, a state law that gives the New York attorney general broad powers to combat financial fraud, the person familiar with the matter said.

“We are proud of our record of disclosing to investors and the investment community material facts applicable to our business,” Cohen said during a conference call with reporters on Thursday. He declined to disclose the nature of the documents being sought because the company is still assessing the subpoena.

Tillerson, a University of Texas-trained engineer who’s spent his entire career at Exxon, told the company’s annual shareholder meeting in May that technology will provide solutions to any impacts that result from climate change, such as higher sea levels.

Climate models that seek to predict the outcome of rising temperatures “just aren’t that good,” Tillerson said during the May 27 gathering in a Dallas symphony hall. Exxon is wary of making efforts to reduce emissions that may not work or that will be deemed unnecessary if the modeling is flawed, Tillerson said.

Bill McKibben, the environmental activist who founded 350.org, called for more jurisdictions and agencies to probe what he called a “truly serious” scandal. “We hope that other state attorney generals and the federal Department of Justice, and the Securities Exchange Commission will show similar fortitude” as Schneiderman and launch investigations.

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