NEW YORK – Climate change may be the defining risk for oil and gas companies in coming decades, and attorneys for New York state are saying Exxon Mobil misled investors about how it was handling that risk.
The state made closing arguments Thursday in a case that accused the energy giant of downplaying the impact of stricter climate regulations in a warming world.
Exxon countered that the company has been taking climate change risks seriously and its executives did nothing wrong.
The lawsuit, brought by New York State Attorney General Letitia James, says Exxon Mobil used two sets of books to account for how potential regulations would impact its business.
“The question in this case is whether Exxon's disclosures were accurate, and the evidence shows they were not,” said attorney Jonathan Zweig, arguing for the state.
In shareholder meetings and reports, Exxon was using two different metrics to account for stricter climate regulations: greenhouse gas costs, which measure how local regulators may tax emissions, and proxy costs, which aim to predict how demand for oil and gas may change around the world due to regulations. Exxon attorneys and executives have said the company applied appropriate costs depending on the situation.
But the state says Exxon was conflating these concepts, leading investors to believe the company was applying a projected cost of $80 per ton for its emissions when it was not, and making some oil and gas development projects look more attractive to investors, Zweig said.
“Exxon Mobil took climate risk seriously,” said Ted Wells, an attorney from law firm Paul, Weiss, Rifkind, Wharton & Garrison who represented Exxon. “This is not a case where we said one thing to the public externally and ignored it internally. We did what we said, and we showed you the model so you could see it.”