Mass. probing Exxon over climate change

Source: Benjamin Hulac, E&E reporter • Posted: Wednesday, March 30, 2016

Massachusetts Attorney General Maura Healey (D) said her office is investigating Exxon Mobil Corp. to determine if the oil company defrauded the public and the financial world about the physical and economic damages of climate change.

“Fossil fuel companies that deceived investors and consumers about the dangers of climate change should be held accountable,” Healey said yesterday morning in Manhattan at a meeting of state attorneys general about climate change.

“We can all see today the troubling disconnect between what Exxon knew and what the company shared with the public regarding the consequences of burning the fuel it markets,” she said. “That’s why we have joined in investigating Exxon Mobil.”

Massachusetts is the third state whose attorney general is investigating Exxon for potentially failing to disclose financial risks related to climate change.

New York State Attorney General Eric Schneiderman (D) and California Attorney General Kamala Harris (D) have launched separate investigations into Exxon’s knowledge of climate change risks.

Attorney General of the U.S. Virgin Islands Claude Walker said his office is investigating what a company knew about climate change and what it shared publicly. He did not specify which firm he’s investigating.

Healey and Walker spoke yesterday alongside the attorneys general of Connecticut, Maryland, New York, Vermont and Virginia, as well as former Vice President Al Gore, to announce an “unprecedented coalition” to combat climate change.

“Our offices are seriously examining the potential of working together on high-impact, state-level initiatives, such as investigations into whether fossil fuels companies have misled investors about how climate change impacts their investments and business decisions,” Schneiderman said.

Asked about his team’s probe, Schneiderman said they had “received a lot” of documents.

“It’s way too early to say what we’re going to find with Exxon,” he said.

A ‘preposterous’ attack

Exxon Mobil said the statements made yesterday amount to a political attack.

“The allegations leveled against Exxon Mobil again today are politically motivated and based on discredited reporting funded by activist organizations,” company spokeswoman Suzanne McCarron said in an emailed statement. Exxon is considering legal recourse, she said.

Those allegations are founded on the notion that the company arrived at “definitive conclusions” about climate change before the broader scientific community and held back those findings, she said.

“Such a claim is preposterous,” McCarron said.

“The allegations repeated today are an attempt to limit free speech and are the antithesis of scientific inquiry,” she continued. “The investigations targeting our company threaten to have a chilling effect on private-sector research.”

Before Exxon issued its statement, Schneiderman address the free-speech argument.

“The First Amendment, ladies and gentlemen, does not give you the right to commit fraud,” he said.

Staffers from 10 other states and the District of Columbia joined the attorneys general in New York.

Their offices are part of a group of 25 states, cities and counties that filed a brief in defense of U.S. EPA’s Clean Power Plan yesterday in the U.S. District Court for the District of Columbia.

Speaking to reporters, the states’ top law enforcement officials described how climate change harms their constituents but spoke vaguely about what role their newly formed coalition might take.

Walker, of the Virgin Islands, said increasingly powerful hurricanes threaten the territory’s tourism, its top industry.

“We have to do something transformational,” said Walker, speaking after Gore, whom Walker called a personal hero. That energy companies want to drill in the Arctic because receding ice caps make it easier to explore is particularly alarming, Walker said.

“How selfish can you be?” Walker asked. “Your product is destroying the planet.”

Maryland Attorney General Brian Frosh (D) said rising water levels are eroding islands in the Chesapeake Bay. Mark Herring, Virginia’s Democratic attorney general, spoke of Hampton Roads in southeast Virginia, calling the region the “second-most-vulnerable area in the entire country as climate change drives continued sea-level rise.” And New Mexico Attorney General Hector Balderas (D) said climate change has become a public health concern in his state.

“We see its drastic effects in New Mexico — its extreme drought, increased risk of severe forest fires and the ruin of our wildlife and natural habitats,” he said in a statement.

“What we want from Exxon Mobil and Peabody and ALEC is very simple,” said Maryland’s Frosh, referring to the coal company and the American Legislative Exchange Council. “We want them to tell the truth.”

A spokesman for Frosh neither confirmed nor denied any climate-related investigations.

“Since the 1990s, Peabody has widely advocated a technology approach to reduce carbon and other emissions, made hundreds of millions of dollars in clean coal investments, and taken well-articulated positions on issues over the years, such as our 2013 carbon report,” Peabody spokeswoman Beth Sutton said.

ALEC did not respond to requests for comment.

Critics take aim at Clean Power Plan

Patrick Morrisey (R), West Virginia’s attorney general, who is not participating in the climate coalition, criticized the Clean Power Plan.

“I will strongly oppose efforts by anyone to bully job producers into compliance with this illegal and unprecedented regulation,” he said in a statement. “We should reiterate that states should put their pencils down and not waste taxpayer dollars by coming into compliance with a regulation that will not be upheld in court.”

Laura Sheehan of the American Coalition for Clean Coal Electricity issued a statement with similar language. “New York Attorney General Eric Schneiderman and his allies should serve their states by putting their pens down,” she said.

Morrisey used the phrase “pencils down” in a February letter after the Supreme Court stayed the Clean Power Plan (ClimateWire, March 18).

Scott Segal, a Bracewell LLP attorney for energy companies challenging the Clean Power Plan, said yesterday’s announcement won’t do anything to lower greenhouse gas emissions.

“Some of the attorneys general seem more interested in featuring their effort to censor scientific inquiry than they do in defending the Clean Power Plan,” Segal said.

Schneiderman’s office announced a settlement Nov. 9, 2015, with Peabody Energy Corp., the coal company, finding the firm violated state laws when it publicly downplayed how carbon emissions regulation and weak coal demand could hurt business.

Under the deal, Peabody agreed to “accurately and objectively represent” financial risks associated with climate change in company documents.

“Following an eight-year investigation, other than an agreement to amend certain disclosures, there was no other action associated with the settlement, no admission or denial of wrongdoing and no financial penalty,” said Sutton, the Peabody spokeswoman. “We routinely review our disclosures and enhance them as necessary.”

“Other states are clearly trying to understand what it would mean for them to join,” Peter Frumhoff, director of science and policy for the Union of Concerned Scientists, said of yesterday’s coalition formation.

Frumhoff urged Exxon to stop funding ALEC, which has been linked to campaigns to deny climate science, and lauded the Massachusetts probe.

“Healey’s investigation should affect the way the public and lawmakers view Exxon and thereby Exxon’s ability to thwart effective U.S. climate and clean energy policies,” he said.