Trial over Exxon’s climate-change fraud due to wrap up
New York state claims the oil giant hid the true costs of curbing climate change from its investors
New York — Lawyers for New York state and ExxonMobil will make closing arguments on Friday in the closely watched trial in the state’s lawsuit charging that the oil major hid the true costs of regulations aimed at curbing climate change from its investors.
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 CEO Rex Tillerson, who flatly denied the allegations against the company.
The attorney-general alleges that Exxon caused investors to lose up to $1.6bn (R25bn) 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 tonne of carbon emissions in wealthy countries by 2040, but internally used figures as low as $40 per tonne or none at all, the attorney-general said.
Tillerson testified that the proxy cost represented a “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.
Exxon’s lawyer, Theodore Wells, said in his opening statement that the attorney-general’s case wrongly conflated proxy costs with those project-specific costs. In fact, he said, the company consistently used both and never misled investors about them.
There is no jury in the trial, meaning the verdict will be decided by Justice Barry Ostrager.
In October, 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, Chevron and Royal Dutch Shell face lawsuits by cities and counties across the US 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.