2016: Exxon vs. Climate Change, a Battle With Many Fronts

As investigations of potential climate fraud were launched by several attorneys general, Exxon and its allies in Congress fought back, with no end in sight.

Exxon, under Rex Tillerson's leadership, found itself ensnared in climate investigations

ExxonMobil has found itself ensnared in several climate change investigations. Credit: CHARLY TRIBALLEAU/AFP/Getty Images

A report that was little more than a forgotten footnote in ExxonMobil's corporate history—a warning from a senior company scientist to top executives in 1977 about fossil fuels' possible catastrophic consequences to the climate—became the rock that started a landslide in 2016.

That paper and other documents were unearthed last year as part of an InsideClimate News investigation of Exxon's four-decade history of studying climate change while sowing doubt about it publicly and working against climate action.

At first, the disclosures did not strike Exxon as terribly threatening. There were no "smoking guns," an Exxon lawyer later said. But as the months passed the fallout included investigations from at least two states, New York and Massachusetts, potentially one from the Securities and Exchange Commission and calls for the Justice Department to intervene. A coalition of 17 state attorneys general vowed in March 2016 to hold Exxon and the fossil fuel industry responsible for its role in climate change.

It has become a partisan political fight as much as a search for the truth about what Exxon knew and did about climate change. While many on the Democratic side wanted to hold Exxon accountable, Republicans lined up to hold Exxon's adversaries accountable.

The result is a long battle shaping up in courtrooms from New York to Texas and in the politicized halls of the Capitol. The skirmishes could chart new paths for Exxon and the fossil fuel industry or continue to let the industry avoid responsibility for global warming. With Exxon's chief executive, Rex Tillerson, picked by Donald Trump to be secretary of state, the showdown takes on even more significance. The job would make him the country's ambassador to the world on climate change.

"Make no mistake about it, in my view, there's nothing we need to worry about more than climate change," said Maura Healey, a coalition member and Massachusetts attorney general who is heading her state's investigation of Exxon. "Not only must we act, we have a moral obligation to act."

Exxon, predictably, has fought back through various legal avenues. It got backup from leaders in Congress, conservative state attorneys general and organizations allied with climate skepticism. Subpoenas were even issued to climate advocacy groups and individuals accused of colluding with the investigations.

The legal and political resistance is nothing but shortsighted and dangerous, said Rep. Ted Lieu, a California Democrat who was one of the first to call for investigations into Exxon.

"I feel like they are living in an alternative reality on the issue of climate change," he said. "Every challenge to the reality of climate change is a delay that makes it much harder to fix the problem.

"Chemistry and physics do not compromise. It's deeply troubling to see there are still influential voices that cannot accept that and are standing in the way. The consequences will be horrific for the United States and the rest of the world."

From the other side of the political aisle, the attack on Exxon represents tunnel vision by liberals who fail to acknowledge there is a broader picture beyond their own views, said Rob Henneke, general counsel for the conservative think tank Texas Public Policy Foundation.

"It is the intention of the liberal attorneys general to use their investigatory powers to prosecute based on one specific viewpoint and to threaten penalties for those who hold different views," Henneke said.

"This is not allowing for an open discussion on the underlying policy issues and resolving the scientific debate on the impact of mankind on our environment."

The Subpoena That Started It All

The legal fight began in earnest last year when New York Attorney General Eric Schneiderman issued a subpoena to Exxon seeking documents spanning four decades on what the company knew about climate change and what it told shareholders and the public.

The attorneys general of Massachusetts and the U.S. Virgin Islands followed suit in early 2016 and courtroom battles erupted.

"They've targeted ExxonMobil as...a perceived political opponent perhaps because it's one of the most prominent, if not the most prominent, traditional energy company," Exxon attorney Justin Anderson said during one of the court proceedings in Texas.

The Exxon affair exploded on the national stage in March when Schneiderman and attorneys general offices from 16 states formed a coalition calling themselves AGs United for Clean Power. They staged a press conference and pledged to hold fossil fuel companies accountable for their climate conduct. Former Vice President Al Gore lauded the effort as "the best, most hopeful step in years" at continuing the progress the U.S. has made.

The House Science Committee led by Texas Republican Rep. Lamar Smith, who has a history of challenging climate science, would later open an investigation of Schneiderman and Healey, along with non-governmental organizations Smith felt were sympathetic to the attorneys general.

"This is a fight that somehow needs to get beyond the partisanship so that the climate and energy debates can proceed from a more agreed upon factual foundation," said Cal Jillson, a political analyst and political science professor at Southern Methodist University.

The first indication of the fierce battle that continues today came when Exxon filed a lawsuit in Texas in April to halt the investigation by U.S. Virgin Islands Attorney Claude Walker. Walker ultimately agreed to suspend his investigation. The probe also had targeted the Competitive Enterprise Institute (CEI), a libertarian think tank once funded by Exxon and known as one of the most prominent organizations casting doubt on climate change.

By May, Smith had launched his attack with letters to the 17 state attorneys general and eight NGOs accusing the groups of collusion. Smith and 12 fellow Republicans on the House Science Committee complained that companies that question climate science and policy were being unfairly targeted.

None of the attorneys general or NGOs complied with Smith's demand to turn over records, setting the stage for a summer of contentious bickering that culminated with an exasperated Smith issuing his own subpoenas and calling a hearing on Capitol Hill.

Meanwhile, the company filed a lawsuit in Texas in June to block the Massachusetts investigation. New York was later added to the lawsuit, even though the company had already turned over 1.2 million pages of documents to Schneiderman's office.  

A meeting of the Republican Attorneys General Association in July featured Myron Ebell, then a senior staff member of CEI, who would later lead Trump's Environmental Protection Agency transition team. Ebell lashed out at Exxon foes, saying the coalition of Democratic attorneys general and environmental organizations were colluding to "silence and defund the opponents of global warming alarmism."

Eleven Republican attorneys general have filed a brief siding with Exxon and urging the court to halt the state investigations, saying Healey is abusing her power.

At the same time, 13 Democratic attorneys general have weighed in with a brief supporting the investigation, telling the judge that states have a responsibility to protect citizens from fraudulent or deceptive practices.

In response to a call by Lieu and fellow California Rep. Mark DeSaulnier for a federal investigation, U.S. Attorney General Loretta Lynch told the congressmen she had referred their request to the FBI. The move is considered standard procedure and signals only that the FBI has been asked to do fact-finding.

Exxon and Smith have been joined in the legal arena by the Energy & Environment Legal Institute and CEI. These Exxon allies have filed lawsuits against seven of the attorneys general in the clean power coalition seeking records they believe prove abuse of authority. Backed by a sympathetic federal judge in Texas, Exxon is also wielding a court order to obtain records of environmental organizations and individuals the company believes conspired with the attorneys general.

The Tidal Pull of Politics

Even in the courts, where impartiality is a hallmark of justice, there's a whiff of favoritism. Schneiderman has generally prevailed in New York courts, while Exxon has the upper hand in Texas courts.

The federal judge in Texas, Ed Kinkeade, said Healey may have acted in "bad faith" when she issued a civil investigation demand for climate-related documents. He initially gave a green light for Exxon lawyers to question Healey about her motivation, but later canceled the deposition.

In such high stakes cases, litigants look for every advantage they can find, said Tom McGarity, a University of Texas law professor.

"It is clearly forum shopping by the parties," he said.  "It's also a strategic part of their litigation plan. They want a court they believe will be more sympathetic to their position.

"Forum shopping is unseemly, but it's part of the process."

Although the judges in Texas and New York may not harbor an intentional bias, McGarity said their respective backgrounds may foreshadow how they will rule.

Kinkeade acknowledged the tidal pull of politics.

"You know, I came up through the world of politics," he said during a hearing. "That's how I got here. I came through the world of running for election and that sort of thing, so I understand a little bit about politics."

Larger Fight Ahead

Lieu, DeSaulnier, Sen. Sheldon Whitehouse and their allies have vowed to press the fight on Capitol Hill, calling out an industry-controlled machine they say continues validating climate science denial.

Smith and his conservative cohorts on the science committee, and Republican attorneys general, remain determined to shield Exxon from those they say want to advance their climate agendas by crippling the company.

The fight is far from over, said Pat Parenteau, a professor of environmental law at the Vermont Law School.  

"But from this chaos and confusion has to come a realization that the future must be a future of decarbonization," he said.

There's more at stake than simply holding Exxon responsible for consumer fraud, he said.

"The larger issue is sending a message that there has to be a shifting away from fossil fuel and an emphasis toward alternative, less harmful, energy sources," he said. "That is the important message that has to come out of all of this."

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