Exxon’s climate change fraud trial to wrap up in New YorkPosted On: Nov. 7, 2019 11:50 AM CST
(Reuters) — Lawyers for New York state and Exxon Mobil Corp. faced off Thursday to deliver closing arguments in the closely watched trial in the state’s lawsuit charging that the oil major hid from its investors the true costs of regulations aimed at curbing climate change.
The case, filed in October 2018 in Manhattan state court, was the first of several climate-related lawsuits against major oil companies to go to trial. It featured testimony from investors, experts and former Exxon Chief Executive Rex Tillerson, who flatly denied the allegations against the company.
Exxon’s lawyer, Theodore Wells, began by calling the case “meritless” and said the state failed to offer testimony from any investor who was misled.
“The case is almost a joke,” Mr. Wells said. “But it’s a cruel joke, your honor, because the reputations of a lot of people have been hurt and disparaged by the bringing of the complaint.”
New York’s attorney general alleges that Exxon caused investors to lose up to $1.6 billion by falsely telling them it had properly evaluated the impact of future climate regulations on its business.
The company used a “proxy cost” of up to $80 per ton of carbon emissions in wealthy countries by 2040, but internally used figures as low as $40 per ton or none at all, the attorney general said.
Mr. Tillerson testified that the proxy cost represented “macro level” assessment of the likely effect of future carbon regulations around the world on demand for fossil fuels, and was incorporated into a data guide used throughout Exxon.
Separately, he said, the company evaluated greenhouse gas costs at a “micro level” for specific projects, when appropriate.
Mr. Wells said the attorney general’s case wrongly conflated proxy costs with those separate, project-specific costs.
There is no jury in the trial, meaning the verdict will be decided by Justice Barry Ostrager.
Last month, just two days after the New York trial began, Massachusetts filed a similar lawsuit accusing Exxon of misleading investors and consumers for decades about the role fossil fuels play in climate change.
Both Massachusetts and New York began investigating Exxon after news reports in 2015 saying company scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.
Exxon and other oil companies including BP PLC, Chevron Corp. and Royal Dutch Shell PLC face lawsuits by cities and counties across the United States seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by climate change.
The companies have said in court filings that they cannot be held liable for climate change.
Lawsuits over climate change proliferate across the US
A trial in which Exxon Mobil Corp. stands accused of defrauding investors out of up to $1.6 billion by hiding the true cost of climate change regulation is expected to wrap up this week.
It is one of dozens of lawsuits in the United States brought against oil companies and local and state governments over global warming. The following is a summary of how this litigation is playing out across the country:
- Exxon is the first case to go to trial against a major oil company over climate change.
- The New York attorney general has accused the Texas-based company of using two sets of books to hide the true cost of climate change from investors.
- Exxon has assailed the lawsuit as political. The company has said the two sets of figures used to calculate dollars per ton of carbon emissions served different purposes - evaluating global demand and planning for specific capital projects.
- The Massachusetts attorney general filed a similar lawsuit in October accusing Exxon of misleading investors and consumers for decades about the role fossil fuels played in climate change. Exxon has denied the allegations.
- If the New York and Massachusetts lawsuits are successful, other attorneys general could bring similar cases, said Robert Percival, who heads the environmental law program at the University of Maryland.
- In addition to the litigation by attorneys general, Baltimore, Rhode Island and about a dozen local governments have sued oil and gas companies including BP Plc and Chevron Corp over climate change. The lawsuits claim the companies created a public nuisance by producing the fossil fuels that contributed to global warming. They seek funds to pay for seawalls and other infrastructure to guard against extreme weather and rising sea levels brought on by climate change.
- The companies deny the claims. They say the lawsuits will do nothing to stop climate change and that they are working to address the issue.
- Meanwhile, teenagers across the country have filed more than half a dozen lawsuits accusing states and, in one case, the U.S. government of violating their constitutional rights to life, liberty and property by failing to implement policies that curb climate change. Governments have argued there is no constitutional right to a clean environment and that Congress and the White House, not the courts, should set climate change policy.