ExxonMobil is dismissing the premise of an investigation by New York into whether it lied to the public and its investors about the risks the company faces because of climate change.
New York Attorney General Eric Schneiderman’s probe will try to determine whether Exxon accurately represented to its investors the troubles the company could face because of climate change, as outlined by its own research.
As part of the probe, first reported by The New York Times, Schneiderman’s office subpoenaed documents from Exxon on Nov. 4, the newspaper said, quoting “people with knowledge of the investigation.”
Related: Shrinking Norwegian Natural Gas Production Puts Europe In Dire Situation
Kenneth Cohen, Exxon’s vice president for public affairs, said the next day that the company is working on a full response to the probe. But he added, “We unequivocally reject the allegations that Exxon Mobil has suppressed climate change research.” He said Exxon had financed climate research since the 1970s, published many papers on the subject and had kept investors apprised of climate risks.
A key element of Schneiderman's investigation is the Martin Act, a New York law empowering the state to prosecute companies operating in the state that are suspected of financial fraud. It doesn’t require the attorney general to prove that a company intended to defraud, only that its information was inaccurate or not disclosed.
The law forbids “any fraud, deception, concealment, suppression, false pretense” or “any representation or statement which is false.”
Related: Canada’s Oil Sector Cautiously Optimistic About Late 2016 Recovery
“The Martin Act is the most powerful prosecutorial law in the nation” because it grants authority to the state’s attorney general to press for criminal as well as civil penalties against a company guilty of fraud, David Kaufmann, a former prosecutor in New York, told the Los Angeles Times. “No other prosecutor has that ability,” he said.
Schneiderman’s investigation follows reports by the non-profit Inside Climate News and by the Los Angeles Times that Exxon deliberately played down the impact of fossil fuels on the Earth’s climate, even though Exxon’s own scientists were working closely with academic and government organizations to rectify the problem.
At the same time, however, from the 1990s until the mid-2000s, Exxon also funded groups that denied the risks of climate change. Cohen said the company allied itself with these groups because both shared the goal of keeping the United States out of the Kyoto Protocol, a global climate treaty that called for strict limits on signatory countries’ greenhouse gas emissions.
Related: Is Iran Opening A “Secret Passage” To Asia For Russian Crude?
Cohen stressed that Exxon cut off funding to these groups because “a handful of them were making the uncertainty of the science their focal point. … [W]e needed to back away from supporting the groups that were undercutting the actual risk.”
As it turns out, this isn’t the first time New York has investigated an energy company suspected of downplaying the risks from climate change. The New York Times, again citing its anonymous sources, reports that Peabody Energy of St. Louis, the world’s largest coal company, has been the target of such a probe for the past two years.
So far there have been no formal charges brought against Peabody. Vic Svec, a senior vice president for the company, said in a statement, “Peabody continues to work with the New York attorney general’s office regarding our disclosures, which have evolved over the years.”
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com