The climate change crusade has turned Orwellian. Consider last week’s announcement that New York’s Attorney General was launching an investigation into whether Exxon Mobil lied to the public and to investors about the risks of climate change. Exxon Mobil is not charged with spewing harmful pollution into the air, but rather may be accused of having secreted the potential impact of doing so – conclusions that have gone mainstream only in the past few years and that are still hotly debated in some quarters. Never was Oceania’s “thought-police” so creative. Big Brother would be proud.
The New York Times reports that AG Eric Schneiderman wants to review the oil giant’s financial information, internal communications including emails, and other materials as far back as 1977 to see if the company misled investors and the public about the risks of global warming. Never mind that it was only in 2007 that the fourth Intergovernmental Panel on Climate Change (IPCC) report concluded, "Most of the observed increase in global average temperatures since the mid-20th century is very likely [90 percent confidence] due to the observed increase in anthropogenic greenhouse gas concentrations.”
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Note the use of the words “most” and “very likely.” The majority view that the globe is warming and that humans are responsible has emerged only gradually. In 2004, a flawed study purported to show that 75 percent of the papers on the topic reached that conclusion; the review excluded a large number of dissenting pieces, indicating the reality was significantly lower.
The company denies that “Exxon Mobil has suppressed climate change research” and notes that it has “funded mainstream climate science since the 1970s” and published “dozens of scientific papers on the topic and disclosed climate risks to investors.”
What management should have said was, “Last year we invested $33 billion in oil and gas exploration; does that sound like a company convinced that climate change will crush our business?”
Schneiderman’s office is apparently also concerned that Exxon Mobil has funded the work of dissenting scientists like Wei-Hock Soon, from the Harvard-Smithsonian Center for Astrophysics. Mr. Soon has produced numerous studies indicating that recent warming trends can be traced to variations in the sun’s energy. Environmental outfits like Greenpeace and the Climate Investigations Center have blasted Mr. Soon for failing to disclose that he has received financial support from numerous energy companies. Those accusing organizations are funded, as are most such groups, by foundations committed to advancing alarms about climate change. Or by other interested parties.
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For example, in one of the emails behind the so-called “Climategate” scandal, Phil Jones, a scientist associated with the IPCC writes, “Any work we have done in the past is done on the back of the research grants we get – and has to be well hidden. I’ve discussed this with the main funder (U.S. Dept. of Energy) in the past and they are happy about not releasing the original station data.”
Exxon Mobil’s response to charges that they have tried to recruit scientists to refute theories harmful to their business should be, “Since the environmental movement has attempted to close the door on alternative points of view, and because this debate is so vital to our industry, we consider it prudent to fund researchers willing to challenge the growing orthodoxy on climate change.”
Some of the ammunition for the Schneiderman probe comes from the Los Angeles Times and the left-leaning website Inside Climate News. Both have published snippets from internal Exxon documents that purport to reveal the firm’s duplicity. The company has posted the complete materials on its website, which successfully refutes the attacks.
The AG suggests that the oil and gas behemoth has not adequately warned that climate regulations could impact its business. In its 2014 10k, Exxon Mobil lists under risks, “changes in environmental regulations or other laws that increase our cost of compliance or reduce or delay available business opportunities (including changes in laws related to offshore drilling operations, water use, or hydraulic fracturing)” and “adoption of regulations mandating the use of alternative fuels or uncompetitive fuel components.”
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Exxon’s management further highlights that “Due to concern over the risk of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These include adoption of cap and trade regimes, carbon taxes, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy. These requirements could make our products more expensive, lengthen project implementation times, and reduce demand for hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon sources such as natural gas.” That would seem to cover the waterfront.
And, just for the record, the company cited environmental regulations as a risk in its 2004 10K as well.
As it turns out, Exxon Mobil is not the first company to be investigated along these lines. The AG’s office opened an inquiry into Peabody Coal two years ago, which just recently culminated in Peabody having to revise its warnings to investors, beginning with current filings; no restatements were required and no money changed hands. In other words, Schneiderman’s efforts flopped.
Like others before him, Schneiderman has used (some say abused) his office to further his political ambitions. Taking on the oil industry is a juicy opportunity – and will likely be quite popular with Democrat voters.
But having the government attack corporations for not “disclosing” science that is still (despite claims to the contrary) unsettled is a frightening effort to compel adherence to a political cause. The Attorney General is apparently modeling his energy company attack on how the tobacco companies were charged with hiding information about the health risks of smoking from the public. The difference is that people die from smoking; to date, it can’t be proved that people are dying from filling their car up with gas or from heating their house in the winter. Unfortunately, today’s anti-business and anti-carbon climate makes it dangerous for companies to speak out.
