Exxon’s former CEO to testify in case
Tillerson is back at heart of debate on climate change
WASHINGTON — Former secretary of state Rex Tillerson is again at the center of the climate change debate, as the former Exxon Mobil CEO prepares to take the witness stand regarding allegations his former company deceived shareholders about the financial risks posed by climate change.
More than a week into the trial at the New York Supreme Court in downtown Manhattan, the 67year-old Tillerson is scheduled to make a much anticipated appearance Wednesday to answer questions about missing emails and varying carbon pricing schemes amid a growing wave of climate change litigation against the oil industry.
“Seeing the CEO of Exxon Mobil answering questions about climate fraud is going to send a clear message to the public and the investing community,” said Carroll Muffett, president of the Center for International Environmental Law, a nonprofit law firm in Washington. “Exxon has used extraordinary political and legal maneuvers to try and keep this and similar cases from reaching trial, and now around the world these cases are starting to move.”
At the center of the case brought by the New York attorney general is the question of whether Exxon defrauded investors when it used one carbon price to estimate the potential taxes or fees the company might have to pay on greenhouse gas emissions from individual oil drilling projects and another in the economic modeling it presented to investors regarding future oil and gas demand. Taxing carbon emissions is widely viewed by economists as an effective way to reduce carbon dioxide, a byproduct of burning fossil fuels and a leading greenhouse gas accelerating global warming.
During Tillerson’s decade-long tenure running Exxon, at least one oil sands project in Canada was approved by executives using the lower carbon price, making the project appear more profitable than it would have under a higher carbon pricing scheme, prosecutors allege.
Exxon maintains it never told investors it was using the public carbon price in its internal decision making and has argued the case represents a political witch hunt by former New York Attorney General Eric Schneiderman.
“They didn’t stay in their lane of objectivity and fairness,” Theodore Wells, a lawyer for Exxon, said in
court last week, according to Reuters.
Wave of lawsuits
The trial follows what has been a relatively quiet 18 months for Tillerson since leaving the State Department, amid growing tension with President Donald Trump over the administration’s foreign policy.
In the meantime, pressure on the oil industry over climate change has only increased, with a wave of lawsuits from U.S. cities and
counties claiming that the carbon emissions that come from burning the oil and natural gas produced by Exxon and other oil companies represent a public nuisance — akin to a factory dumping waste into a river.
New York’s case against Exxon is far narrower, asking how much leeway fossil fuel companies have in warning shareholders about the risks posed by carbon prices designed to address climate change.
“That’s not super explosive, and Exxon is on sort of friendly territory. They can say maybe our internal projections were lower but the carbon price now is still zero. If anything, we were optimistic,” said James Coleman, a law professor at Southern Methodist University in Dallas. “The trouble is if the state goes further a field and asks Tillerson didn’t you have responsibility if you knew about the imDuring pact of your product to warn the public.”
Of particular interest to prosecutors is Tillerson’s private email account at Exxon — named wayne.tracker@exxonmobil.com — emails from which were deleted under the company’s email maintenance program despite a 2015 subpoena to preserve executives’ email.
In a motion earlier this month, New York prosecutors claimed Exxon chose not to preserve the emails, quoting one of the company’s attorneys, who said that the mention of the Wayne Tracker account in other documents would provide, “an interesting test of whether the Attorney General’s office is reading the documents.”
a deposition earlier this year, Tillerson defended the private email account as a necessity to manage the huge volume of email he received as Exxon’s CEO.
“That allowed people that needed to correspond to me – allowed me to look at that quickly and not have to scroll through 25, 30 screens to find an email somebody had sent me an hour ago,” he said, according to court records. Tillerson’s testimony is likely to be the first of many courts appearances for oil executives in the years ahead, as more climate lawsuits move through the legal system.
Increased pressure
And questioning them will be plaintiffs’ attorneys armed with company emails and worsening climate forecasts, at a time the American public is increasing pressure on politicians to take greater action to reduce greenhouse gas emissions.
“There’s that iconic photo of the six tobacco CEOs, and we all know they’re lying through their teeth,” said David Bookbinder, who is representing Colorado municipalities in a lawsuit against the oil industry and serves as chief counsel at the Niskanen Center, a Washington think tank. “We don’t have that visual image yet.”