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The Energy 202: New York steps up legal fight against ExxonMobil

January 11, 2018 12:46 pm

This week, ExxonMobil asked to depose 16 California state officials who sued the company over selling fuel they say is warming the planet, raising the seas and, they contend, threatening their communities - just the most recent escalation in the legal fight between the largest U.S. oil and gas firms and blue-state officials over climate change.

Undeterred, one of the most prominent members of the latter group - New York City Mayor Bill de Blasio - sued ExxonMobil and four other oil companies on Wednesday, seeking to hold them responsible for present and future damages to the city from climate change.

The suit, filed Tuesday against BP, Chevron, ConocoPhillips, Royal Dutch Shell and ExxonMobil, claims the companies together produced 11 percent of all of global warming gases through the oil and gas products they have sold over the years. It also charges that the companies and the industry have known for some time about the "consequences of climate change" but sought to obscure them.

"In this litigation, the City seeks to shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat," says the lawsuit brought by New York corporation counsel Zachary Carter, which was filed in U.S. District Court for the Southern District of New York.

The city of New York joins the state of New York in taking legal action against ExxonMobil, a company that was once headquartered in Manhattan. The Empire State's attorney general, Eric Schneiderman, is investigating whether the company misled investors about the risks climate change posed to its long-term business. ExxonMobil has tried in court to stop that investigation, along with a parallel one being carried out by Massachusetts.

The lawsuit marks a renewed emphasis among Democrats and their environmental allies on holding oil companies accountable for what they see as their role in global warming - even as much of the activist energy around climate change is being burned fighting and fuming against President Donald Trump for rolling back environmental regulations and announcing the United States would pull out of the Paris climate agreement.

The legal strategy being pursued by New York City has been embraced by several California cities and counties, but lawsuits seeking to blame companies for their alleged role have floundered.

It remains unclear whether a new wave of litigation - propelled by stronger climate science, reports about how much some companies knew about climate change decades ago, and somewhat divergent legal strategy - will succeed where those efforts failed.

Last year, California's Marin County, San Mateo County and the City of Imperial Beach similarly sued a group of fossil fuel companies over damages related to climate change - citing a theory called "public nuisance," which basically argues that companies are causing an injury to the localities under common law. The cities of San Francisco and Oakland and the city and county of Santa Cruz have also filed suit this year.

"I think the significant development here is that this is the first of these cases in this last year that's filed outside of California," said Michael Burger, who directs the Sabin Center for Climate Change Law at Columbia University. If more and more localities sue, "we might be able to see adequate pressure applied to these companies to inspire action on climate change," he said.

So far, that has not been the case. ExxonMobil has instead responded strongly to the claims by requesting depositions for "potential claims of abuse of process, civil conspiracy, and violation of ExxonMobil's civil rights."

BP and ConocoPhillips, two other defendants named in the lawsuit, declined to comment. The other three argued the court system is not the place to settle climate policy:

- "This lawsuit is factually and legally meritless, and will do nothing to address the serious issue of climate change," Chevron spokesperson Braden Reddall wrote in an email. "Reducing greenhouse gas emissions is a global issue that requires global engagement. Should this litigation proceed, it will only serve special interests at the expense of broader policy, regulatory and economic priorities."

- ExxonMobil responded to New York's lawsuit on its blog, where the firm has also challenged investigative news reports from InsideClimate News and the Los Angeles Times that showed the company was an early pioneer in climate change science in the 1980s, which were cited in the suit. "ExxonMobil welcomes any well-meaning and good faith attempt to address the risks of climate change," Suzanne McCarron, Exxon's vice president of public and government affairs, wrote. "Reducing greenhouse gas emissions is a global issue and requires global participation and actions. Lawsuits of this kind - filed by trial attorneys against an industry that provides products we all rely upon to power the economy and enable our domestic life - simply do not do that."

- Climate change "is a complex societal challenge that should be addressed through sound government policy and cultural change to drive low-carbon choices for businesses and consumers," Curtis Smith, head of U.S. media relations for Shell, wrote in an email, "not by the courts."

Several cases challenging individual companies based on a "public nuisance" theory have failed - including at the Supreme Court, which ruled in 2011 that climate actions by the Environmental Protection Agency in effect removed the ability to use the courts as a remedy.

The difference now, Burger said, is that the claims are being brought under state, rather than federal, law - and that strategy remains to be tested.

New York charges in the suit that it is "spending billions of dollars" to protect its coastlines, its infrastructure and its citizens from climate warming.

"To deal with what the future will inevitably bring, the City must build sea walls, levees, dunes, and other coastal armament, and elevate and harden a vast array of City-owned structures, properties, and parks along its coastline," the suit says. "The costs of these largely unfunded projects run to many billions of dollars and far exceed the City's resources."

The suit does not specify how much money it is asking for from the oil companies in what it calls "compensatory damages," saying that should be established by the legal proceedings.

At a news conference Wednesday afternoon, de Blasio focused on the devastation caused by Hurricane Sandy in 2012, calling it "a tragedy wrought by the actions of the fossil fuel companies." He detailed the 44 people who died in New York as a result of Sandy, as well as the estimated $19 billion in damages it caused, saying: "That is the face of climate change. That is what it means in human and real terms."

De Blasio claimed fossil fuel companies were complicit in worsening climate change because they knew of the problem decades ago but continued to sell a product to Americans that contributed to more greenhouse gas emissions.

"The city of New York is taking on these five giants because they are the central actors, they are the first ones responsible for this crisis, and they should not get away with it anymore," he said. "We're going after those who have profited. And what a horrible, disgusting way to profit - the way it puts so many people's lives in danger. It's time that they are held accountable. It's time that things change in the way we do business."

In addition to the litigation, officials said they expect to divest up to $5 billion in investments from as many as 190 companies with fossil fuel ties, even as they promised to maintain their fiduciary duty to New York's pensioners.

"We're using this moment to send a message to the world," New York Comptroller Scott Stringer said. "We believe a green economy is a thriving economy."

Bill McKibben, an author and co-founder of climate advocacy group 350.org, praised the city's actions on Wednesday.

"I've been watching the climate fight for the last 30 years," McKibben told reporters. "This is one of the handful of most important moments in that 30-year fight."

But the oil and gas lobby said that by not investing in their industry, New York was doing city workers a disservice.

"Today Mayor de Blasio turned his back millions of first responders, police officers and public employees who depend on their pensions to provide for themselves and their families in retirement," said Karen Moreau of the American Petroleum Institute, the largest U.S. oil and gas lobbying group.

"Government pension managers have a responsibility by law to seek the greatest return for their investors, and pensions that invest in oil and natural gas companies have delivered a stronger return than other investments."