Somehow that sounds believable - Jason Kenney, Athabasca Tar Sands, Exxon and the biggest of them all, Exxon, on trial for defrauding company shareholders. In fairness, Kenney isn't a party to the fraud trial but he is Booster #1 when it comes to those tar pits.
For years, Exxon had been using something called a proxy cost of carbon to estimate what stricter climate policies might mean for its bottom line. But as pressure from shareholders grew, a problem came sharply into focus: An internal presentation warned top executives that the way the company had been applying this proxy cost was potentially misleading. That's because Exxon didn't have one projected cost of carbon. It had two.
The contents of that presentation are at the heart of a trial set to start next week in a civil case brought against the company by the New York attorney general. Exxon is accused of disclosing one set of these projected carbon costs to investors while planners used an entirely different set internally for evaluating investments. The public set was more conservative and projected that climate policies would be more stringent, while the internal one assumed more modest attempts to limit emissions. The effect of using these dueling estimates, the attorney general says, was that Exxon hid tens of billions of dollars in potential costs, downplaying the risk to investors and inflating the company's value.
...Applying a lower estimate for carbon costs made high-polluting projects look more financially attractive, and it undermined the investment case for any project that would reduce emissions. Nowhere is this clearer than in Exxon's tremendous investments in Canada's oil sands, a vast expanse of low-grade hydrocarbons that now make up about 30 percent of the company's oil reserves.
"The oil sands crystallizes, at least from my perspective, everything about this issue that is concerning with Exxon," said Andrew Logan, who runs the oil and gas program at Ceres, a nonprofit that works with investors to push for more sustainable business practices. "Oil sands tick all the boxes when it comes to a carbon-risky asset."It's hard to fault Exxon for cooking the Tar Sands books when our governments have been doing the same thing for years to pretend there's vast wealth in that bitumen. Let's call it "creative bookeeping" so that we don't have to call any Canadian prime ministers out for fraud.
How so, you say? Here's just one example. Let's look at government subsidies for the enormously profitable fossil energy industry. The feds admit to subsidies of a couple of billion plus change every year. Even the Auditor General dismisses that as horse shit. What the feds and provinces do is keep most of their largesse off the books.
What about those tailing ponds and thousands of "orphan wells" that all need costly cleanup. The Alberta government's internal studies put that at over a quarter Trillion dollars. Yeah, that's with a "T". Have they been collecting that remediation cost from the energy giants as they haul that bitumen and oil out of the province? Of course not. When Big Fossil bails out of Athabasca they won't be writing any cheques. Somebody else - that's you - will be on the hook.
How much are our own governments stiffing us for? The most recent numbers the International Monetary Fund has crunched are for 2017 and that came in at $60 billion annually. On the one hand we have among the lowest royalty rates for this garbage and that revenue stream only looks good if you hide the real costs. Ah, screw it. Some future government will inherit it. Let them break the bad news to the public when and where.
Wouldn't it be just grand if these governments were as generous to the renewable energy industry as they are to the fossil fuel industry? Hint: ain't gonna happen. Not so long as our political caste are in the tank for the oil giants. And that's where they're planning on staying.
"The oil sands crystallizes, at least from my perspective, everything about this issue that is concerning with Exxon," said Andrew Logan, who runs the oil and gas program at Ceres, a nonprofit that works with investors to push for more sustainable business practices. "Oil sands tick all the boxes when it comes to a carbon-risky asset."
"The oil sands are this very concrete, specific example — and very big example — of the kind of asset you wouldn't invest in," he said, "if you actually believed the rhetoric of Exxon and others about climate risk."
But the trial may prove to be about much more than Exxon's risky investments. Climate change has abruptly shifted in the public consciousness from a future threat to a present danger, and many people and even local and national governments have begun demanding that courts step in to assign liability for the enormous costs they are facing. In the United States alone, more than a dozen local and state governments have sued energy companies seeking damages. Exxon is a defendant in many of these cases.
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