Exxon faces the lawyers

Exxon and The Law​

Picture the scene in Exxon’s headquarters in New York in late 1982, as CEO Clifton Garvin’s secretary peers around his door and says: “There’s a guy out here who says that if we don’t stop producing oil and gas, we will blow up the planet in 2035, because it is overheating. Shall I let him in?” “By all means, Miss Partridge, send him in and cancel all my meetings for the rest of the day!”

This, of course, is fantasy. In fact, Garvin was almost certainly more preoccupied by the fall in global oil consumption, which had started in 1981. It was called a “glut of oil” by the US press, which Garvin regarded as typical of “our American penchant for exaggerated language”. Unhappily for Garvin, the collapse in consumption of oil and its price, went on for another four years. Equally, following deep snow in April 1982 in his city, the winter of 1982-3 turned out to be one of the coldest in relatively recent US history.

The guy in question was M.B. Glaser, who was then Manager of Environmental Affairs Programs at Exxon and he had just produced a memorandum stating a remarkably good outline of the then state of play regarding climate change, dated November 12th 1982. This was to be circulated to Exxon management to “familiarise” them with the subject. It was to be used as “a basis for discussing the issues with outsiders as may be appropriate”, but it should not be distributed externally.

It has now come to light and triggered off a set of lawsuits whose numbers have risen pretty much exponentially since, numbering some 714 in the US since 2017 alone. More of that later, but it is at least worth looking at what Glaser actually said. After outlining the greenhouse effect, his analysis puts the increase in CO2 concentrations at 8% above the levels found 25 years earlier as part of a rising trend since the industrial revolution. He divides the effect between fossil fuel consumption and deforestation, but does not define which is more important. He puts CO2 concentrations at 340 parts per million (ppm).

He goes on to point out that the predictions are dependent on various mathematical models and goes on to say: “The scientific community generally discusses the impact in terms of doubling the current carbon dioxide content in order to get beyond the noise levels of the data. We estimate doubling could occur around the year 2090 based upon fossil fuel requirements projected by Exxon’s long term energy outlook.”

“Our best estimate is that doubling the current concentrations could increase average global temperatures by about 1.3° to 3.1°C. The increase would not be uniform on the earth’s surface with the polar regions of the order of 10° C and at the equator little.” Having gone on to mention the impact on agriculture of a low temperature change, some of which might be good, Glaser comes up with a real surprise: “At the high end, some scientists suggest that there could be considerable adverse impacts including flooding of some coastal land masses as a result of a rise in sea level due to the melting of the Antarctic ice sheet. Such an effect would not take place until centuries after a 3°C global average temperature actually occurred.”

He goes on to say that there is no unambiguous scientific evidence that the earth is warming and that we are not likely to detect it before 1995. “This is about the earliest projection of when the temperature might rise the 0.5°C needed to get beyond the range of normal temperature fluctuations. It is possible that it won’t be detected until 2020 at the earliest.” 

The memorandum then goes on to say that “potentially serious climate problems are not likely to occur well into the 21st century or perhaps beyond at projected energy rates.” This in Glaser’s opinion gave plenty of time, which we now know is not the case. “Making significant changes in energy consumption patterns now to deal with this potential problem amid all the scientific uncertainties could be premature in view of the severe impact such moves could have on the world’s economies and societies.”

There is such a lot wrong with this analysis of climate change that it is difficult to know where to begin. The first and foremost is that if this is the basis of Exxon’s legal liability for climate change and their guilty knowledge of it in 1982, their lawyers shouldn’t have too much of a problem in their defence. Their real legal problems actually started much later, around 1997.

For a start, the memorandum bases its analysis on a doubling of CO2 concentrations on the then figure of 340 ppm raising it to 680 ppm, before anything happens to the climate. It is now 418 ppm and things are undoubtedly happening. Meanwhile, Exxon’s projections of the world’s energy requirements, during a downturn in demand, may not have foreseen the enormous increase in oil production that has actually occurred. Oil consumption has risen by 31% since 1982, being 62 million barrels a day (mbd) in 1979 and reaching 81.6 mbd in 2022; a figure probably beyond Garvin’s wildest dreams.

The result is that Glover’s dates start going all over the place. It may indeed be the case that CO2 concentrations could double to 680 ppm by 2090, if matters continue as they are, but given what 418 ppm can do, we can only pray that they do not. The notion that the climate will only be affected if concentrations double is clearly mad. We are pretty near a 1°C warming now at a 23% increase in such concentrations.

He was obviously right that we could detect global warming in 2020, but it was not “at the earliest”. And what on earth is this stuff about finally noticing the impact of ice melting in the Antarctic as a result of a 3°C rise in global temperatures only centuries after the temperature increased? The ice is melting now at both poles and we are not remotely at a 3°C rise.

It is clearly not Glover’s fault that his perceptions were rather optimistic. His views were probably in line with much scientific opinion at the time, but suggesting that Exxon knew for a certainty in 1982 about our current problems is patently absurd. To describe what Exxon knew about climate change as “breathtakingly accurate in the 1970s and 80s” as a Guardian headline did recently is nonsense.

If Glover was right about anything it was that solving the problem could have a severe impact on the world’s societies and economies. At the time solar panels were $20 a watt, the first wind farms started in the early 1980s and wave power has been coming backwards and forwards ever since. Renewables were not remotely seen as capable of answering the challenge at that time.

So, to return to the question of suing Exxon for climate change damage, the matter is not so much what they knew in the 1980s, but how they have lobbied against doing anything about it, under CEO Rex Tillerson. This included forming the Global Climate Coalition and lobbying successfully to keep the US out of the Kyoto Agreement. Meanwhile, the company is being sued by fisherman for the decline in both salmon and crab populations in Washington State and California and wild fires in Colorado. The people of Imperial Beach, California want them to pay for their sea wall.

In New York state, the argument is that Exxon defrauded investors by giving them insufficient warning of the greenhouse effect, while there is a major argument in Rhode Island brewing over whether the state or the federal judiciary should handle the cases. In Massachusetts, Attorney General Maura Healey is arguing about misleading information too, while New Jersey concentrates on sea level issues.

Well, we all know that litigation is as American as apple pie, but to outsiders there is something rather puzzling about all this. For a start, the crab and salmon fishermen would have to be using rowing boats not to be contributing to climate change themselves and so would every car driver in America. And why particularly Exxon, apart from Tillerson’s sceptical leadership? Why not have a go at Saudi Aramco, which alone produces twice as much? And what about coal, which as Glover pointed out all those years ago, produces 18% more CO2 on combustion than oil?

Given the role of cars and planes in America’s past and present life, it is not difficult to see the level of hypocrisy in all this litigation, whose logical outcome will be to make a lot of lawyers wealthier than they already are. Furthermore, it is all about the past, not the future. By comparison, the European legal approach seems much saner. Back in May 2021, Shell was abruptly told by a Dutch court to cut its emissions by 45% on 2019 levels by 2030 or face the consequences. The US and climate problems might be better off, if the US did something similar at the federal level. Meanwhile, in a move that will make America great again, the state of Wyoming has just voted to ban the use of electric vehicles there from 2035.