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ExxonMobil and the Price of Climate Denial

Just weeks before the commencement of COP21 in Paris, a scandal broke that could well signal a watershed in the political and legal response to climate change. Inside Climate News, the Pulitzer Prize winning media organisation devoted to environmental reporting, published a six-part exposé into Exxon Mobil, revealing that the oil and gas giant knew the risks of climate change as early as the 1970s, but chose to spend millions over the next few decades propagating climate denial.

While this alone is enough to constitute a scandal, with the hashtag #ExxonKnew trending for days on social media, what makes it particularly striking is that it has sparked a legal response that could establish a new precedence for legal action against corporations that wilfully disrupt scientific consensus for financial gain.

On 4 November, the New York Attorney General Eric T. Schneiderman announced that he would investigate ExxonMobil for fraud and issued a subpoena demanding forty-years worth of documents. While it appears now that ExxonMobil has missed the deadline set by state prosecutors, legal scholars, such as Wendy Wagner, Professor of Law at the University of Texas at Austin, have pointed out the investigation itself already represents a “transformative” move. As she explains, it concerns essentially “whether the company lied to investors and consumers in order to place its own profits ahead of the public good.” The investigation, however, draws not on tort law, as has been the case with tobacco litigation, but New York’s Martin Act, which forbids “any fraud, deception, concealment, suppression, false pretense.”

Even without the results of the subpoena, disquieting evidence of concealment and deception by ExxonMobil has already emerged. In fact, the documents released by Inside Climate News illustrate that it was Exxon’s own scientific research in the 1970s and 1980s that revealed the potentially devastating risks of climate change.

In 1977, James Black, a senior scientist from Exxon’s team, reported to the Management Committee that “there is general scientific agreement” that man-made CO2 is influencing the climate; a point he echoed a year later when he stated – in terms that are not far off the findings of present day science – that a doubling of the CO2 in the atmosphere would increase average global temperatures by 2 or 3 degrees.

Despite these warnings, or rather because of them, Exxon went on to spend more than 30 million dollars funding conservative think tanks and organisations denying the existence of global warming. Even since 2008, when Exxon gave into the public pressure from shareholders and pledged to end its funding to these groups, it has continued to donate millions to members of the US Congress, such as Jim Inhofe, who are outspoken critics of climate science.

What is perhaps most damming about these revelations, however, comes from an investigation from The Los Angeles Times published only weeks after the report from Inside Climate News. This report shows that at the same time as funding climate denial, Exxon relied on its own research into the effects of global warming to develop a long-term plan for artic drilling. As Ken Croasdale, another of Exxon’s senior researchers, has stated: “potential global warning can only help lower exploration and development costs” into the Artic, where there is an estimated third of the world’s untapped gas and 13% of the untapped oil.

Hedging its bets by funding both climate science and those institutions that deny it is ironically what has made Exxon much more vulnerable to a legal challenge than other companies that decisively chose one side or the other. While it remains to be seen whether Exxon goes the same way as tobacco and asbestos, other companies from the energy sector will be watching its progress very closely. As Fadel Gheit, a senior oil company analyst has said, “[t]his is not good news for Exxon Mobil and Exxon Mobil shareholders.”

While it may well, as Upton Sinclair once put it, be difficult “to get a man to understand something when his salary depends upon his not understanding it,” the legal landscape is changing. With the Paris deal now in place, it will increasingly be a question of how quickly these companies can adapt to a post-carbon economy and whether they still have the legal mandate to operate.

Louis Klee is the January - June 2016 Climate Change and Energy Security Fellow at Young Australians in International Affairs. He was recently the IARU-GSP Global Programs Santander Scholar at the University of Copenhagen.

This article can be republished with attribution under a Creative Commons Licence. Please email with any questions or for more information.

Image Credit: Blaine O'Neill (cropped and filter) (Flickr: Creative Commons)

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