ExxonMobil: NY Attorney General’s “Reckless and False Allegations” Misstate Climate Policies

IRVING, Texas–(BUSINESS WIRE)–New York Attorney General Eric Schneiderman made “inflammatory, reckless
and false allegations” when he misstated how ExxonMobil assesses the
potential impacts of climate policy on its business to justify expanding
a politically based investigation with “ever-shifting and unravelling
investigative theories.”

“From the outset of this investigation, it has been clear that the
attorney general is working backwards from an assumption of ExxonMobil’s
guilt, searching in vain for some theory to support his prejudgment,”
the company said in a brief to the New York Supreme Court today. The
brief was filed by ExxonMobil’s lead lawyer, Ted Wells, Jr., of Paul,
Weiss, Rifkind, Wharton & Garrison LLP.

ExxonMobil’s brief explained how the company uses a proxy cost of carbon
to assist its assessment of potential impacts of climate-change polices
on global energy demand in its annual forecast, the Outlook for Energy.
In addition, where appropriate, the company considers the impacts of
current and potential future greenhouse gas (GHG) regulations as one of
many factors when assessing the economics of individual projects.

The attorney general inaccurately alleged in a court filing on June 2
that the company’s carbon pricing practice amounted to a “sham” because
the company used what he described as publicly stated figures of the
proxy cost of carbon and a “secret internal version” in its analyses.
Furthermore, he said he could find no evidence in millions of pages of
documents turned over by the company of the consistent application of a
proxy cost, but he points to no instance where a cost of carbon was not
applied but should have been.

“For a prosecutor proceeding in good faith, the absence of any evidence
of wrongdoing is grounds for closing an investigation, not expanding
it,” said the ExxonMobil brief.

“Even more frivolous is the attorney general’s claim that it was
inappropriate to use the actual cost of carbon … when assessing overall
project economics, rather than hypothetical figures. There is no basis
in law or logic to find fault for relying on actual costs when
available.”

The attorney general suggested that accounting rules known as Generally
Accepted Accounting Principles (GAAP) and regulations of the U.S.
Securities and Exchange Commission require the company to use a single
estimate of carbon pricing when evaluating impairment or estimating
reserves. ExxonMobil’s brief makes clear there is no such requirement in
the GAAP rules, and SEC regulations governing reserve estimates
“expressly bar consideration of the hypothetical impact of future
policies, which is a key purpose of the proxy cost.”

“ExxonMobil’s use of different metrics, in different circumstances, to
accomplish different goals evinces prudent financial stewardship,
applying appropriate assumptions in appropriate cases. There is nothing
untoward or surprising about any of this.”

The attorney general’s latest claim – that ExxonMobil was internally
underestimating the impact of climate change on its business – is in
direct contradiction to the thesis that led to the investigation in the
first place. When he launched the investigation at a press conference in
2015, Schneiderman accused ExxonMobil of downplaying the risks of
climate change, but secretly taking the effects of climate change into
account in its business decisions.

“This is just another example of the ‘heads I win, tails you lose’
approach to investigating employed by the attorney general,” said
ExxonMobil’s brief. “While it might be too much to expect consistency
from the attorney general, his failure to present a coherent rationale
for further investigation is fatal to his current plea to this court.”

ExxonMobil’s brief was in support of an application to quash additional
subpoenas issued by the attorney general.

“The attorney general offers one justification for his new document
subpoena: rank speculation that ExxonMobil’s public statements about a
proxy cost of carbon were false or misleading. Despite having 2.8
million pages of ExxonMobil’s documents and eighteen months to review
them, the attorney general has found no valid basis for believing
misrepresentations have taken place.”

ExxonMobil also called out the attorney general for distributing the
filing to media before submitting it to the court in a transparent
attempt at headlines.

“No further evidence is required to establish the political motivation
of the attorney general’s fruitless year-and-a-half long investigation
pursing his ever-shifting and unravelling investigative theories. It is
an abuse of the powers of his office and the court system itself,
furthering only the attorney general’s transparent political ambitions
and ultimately bound to taint a prospective jury pool, thereby depriving
ExxonMobil of a fair trial in the event this political witch hunt were
to reach that unlikely stage.”

To view the court filing, click
here.

About ExxonMobil

ExxonMobil, the largest publicly traded international oil and gas
company, uses technology and innovation to help meet the world’s growing
energy needs. ExxonMobil holds an industry-leading inventory of
resources, is the largest refiner and marketer of petroleum products,
and its chemical company is one of the largest in the world. For more
information, visit www.exxonmobil.com
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Contacts

ExxonMobil
Media Relations, 972-444-1107