Exxon Under Criminal Investigation over Claims it Lied About Climate Change

The New York attorney general has begun an investigation of the company to determine whether or not the company actually lied to its customers and investors about the dangers of climate change. The New York Times reported on Nov 6, that Exxon Mobil might not be the only oil company in the cross hairs.

While the New York AG’s current efforts focus on ExxonMobil, we believe that this action represents a potential tipping point not just for Exxon but for the industry as a whole.

ExxonMobil includes information about the business risk of climate change for many years in its 10-K, Corporate Citizenship Report and in other reports to shareholders.

The investigation follows media reports suggesting that during the 1980s and 1990s, Exxon Mobil incorporated climate research into its business practices while simultaneously arguing, in newspaper ads and public statements by company executives, that climate change science was murky.

The people with knowledge of the New York case also said on Thursday that, in a separate inquiry, Peabody Energy, the nation’s largest coal producer, had been under investigation by the attorney general for two years over whether it properly disclosed financial risks related to climate change.

Attorneys-general in other states may join in Mr Schneiderman’s efforts, bringing far greater investigative and legal resources to bear on the issue.

Exxon on Thursday acknowledged receiving a subpoena and is weighing a response, according to Richard Keil, the company representative. Strikingly, not a single major American oil company was part of the group. For example, BP has been very active in wind power, and Chevron has been a pioneer in geothermal energy. Even Exxon Mobil has been working on a project that has been attempting to convert algae into a biofuel. Several companies were found guilty of the scheme in 2006. “Meeting these needs will require all economic energy sources, especially oil and natural gas”, it said.

“This is not good news for Exxon Mobil or Exxon Mobil shareholders”, said Fadel Gheit, a senior oil company analyst at Oppenheimer & Company.

Last month, 10 of the world’s biggest oil companies, including BP, Royal Dutch Shell, Saudi Aramco, Repsol of Spain, Eni of Italy and Total, made a public declaration acknowledging that their industry must help address global climate change.

Company researchers later confirmed the emerging scientific consensus that doubling carbon dioxide emissions from burning fossil fuels would warm the earth with unpalatable effects, Cushman said.

The paper also reported that a long-running investigation is underway into coal giant Peabody Energy relating to whether it has adequately reported on climate risks to investors. But he added, the record shows that the companies “have walked away from being a credible spokesman on science”.