The Exxon Shakedown

COMMENTARY Environment

The Exxon Shakedown

Aug 30th, 2016 3 min read

Commentary By

Stephen Moore @StephenMoore

On Temporary Leave of Absence |Distinguished Visiting Fellow

Tim Doescher

Associate Director, Coalition Relations

Liberal attorneys general from 17 states have put a big red bull's-eye on the chest of Big Oil.

Their bizarre claim is that for years energy companies fraudulently covered up their knowledge that greenhouse gases from fossil fuels cause catastrophic climate change. The most recent chapter of this witch hunt is a remarkable subpoena filed by Massachusetts Attorney General Maura Healey, which would require ExxonMobil to turn over 40 years of internal company documents. It also demands that ExxonMobil produce all its internal communication with conservative-leaning think tanks.

This is nothing more than an old-fashioned, political mob shakedown of a deep-pocketed industry for money. The AGs are hoping for a repeat of the multibillion-dollar tobacco company settlement in the 1990s. The big and obvious difference here is that tobacco companies sell a product that is dangerous to one's health. The oil and gas companies sell energy that makes all modern industrial life possible.

Worse, they want to use the steel-heeled boot of government to get energy companies to stop giving money to free-market institutions that the left doesn't agree with. But they are permitted to donate to the Sierra Club, the Wildlife Federation and the Center for American Progress. The goal is to silence any opposition on the right to the climate-change industrial complex. The way to create a scientific consensus on an issue is to muzzle anyone who dares disagree with the scientific consensus. If these science police had been around several hundred years ago, we'd all be forced to believe that the Earth is flat.

To enforce the global warming consensus, the AGs want more than money -- they want to figuratively hang the oil and gas company CEOs in effigy in the public square. New York Attorney General Eric Schneiderman hinted that he'd like to see criminal prosecution and jail time for the energy company executives, saying "financial damages alone may be insufficient.…The First Amendment does not give you the right to commit fraud."

The end game here could hardly be more sinister. The AGs are following the example set by the Obama administration and the EPA to bleed and "bankrupt" oil- and gas-producers in America as they are doing now to the domestic coal industry.

All the while, there has been no factual basis for these allegations, just conjecture and speculation. First, there is no evidence that the companies produced global-warming research; second, there's no evidence that they covered it up; third, there is no evidence whatever that this research (if it happened) confirmed or denied global warming; and fourth, there is no consensus among leading scientists about whether global warming is happening, why it is happening, or what its effect might be (positive or negative) on the planet.

Moreover, unlike the tobacco company litigation, which concerned smokers who got cancer and heart disease, who is the victim here of the purported fraud by the energy companies?

While these AGs are using their positions of power to intimidate Big Oil, ExxonMobil, Chevron, BP and others have been busy creating millions of energy-related jobs, helping the USA become the largest energy producer in the world, driving down the cost of energy, and adding to U.S. growth. Without the energy companies and the shale oil and gas boom of the last decade, the U.S. would not have escaped the Great Recession of 2008-09.

But in Washington, no good deed goes unpunished.

Now for the ultimate irony of these AG witch hunts.  The oil and gas companies are reducing their greenhouse gas emissions already. In part, because of fracking, and the new boom in natural gas, carbon emissions have rapidly declined over the past decade. So where is the fraud?

What’s more, because natural gas burns clean, and because of its availability, affordability and abundance, it is more and more the fuel that powers the engine that drives our economy. The more we burn, the more emissions trends are declining (see chart). ExxonMobil and all the other energy producers should be honored and given medals for environmental cleanup, not demonized.

So fracking is reducing greenhouse gases, and yet the state AGs who say global warming is an imminent crisis threatening the future of the planet are trying to stop the energy companies that they are suing from fracking.  States like New York, California, and Maryland have banned fracking, thus depriving themselves and the rest of the market of greater access to clean energy.

‎All of this suggests that maybe it is the AGs who should be sued for fraud. We're pleased to report that ExxonMobil is indeed fighting back. The company has admirably called the bluff of these AGs, and filed a lawsuit against Massachusetts' attorney general and the U.S. Virgin Island's attorney general, charging that the AGs are guilty of harassment. In recent days, the Virgin Islands AG ran for cover and dropped the subpoena. ‎

Here's hoping that the rest of these ‎shakedown artists drop their witch hunts too.

Disclaimer: ExxonMobil is not currently a contributor to The Heritage Foundation; however, their last contribution amounted to .05% of The Heritage Foundation budget.

First appeared in Investor’s Business Daily.