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Why is that a waste? This is NYC and it's where shares are traded. The purview of the AG as well as the U.S. Attorney for the Southern District of New York is quite extensive and this is not new at all. Maybe if you're talking about restructuring the entire judicial system which in some ways I can get behind, but I also don't think things should sit idly while that happens. Additionally, if you looked at the court case, it's not on the back of global warming where the case is going, but on deceiving shareholders. You should try actually reading what's being filed.
Give me a break. First of all, this whole lawsuit is nonsense because it's not factual. Climate Change is not a 'proven' fact. Second, if ANYONE should go after Exxon, it should be the Feds.
Give me a break. First of all, this whole lawsuit is nonsense because it's not factual. Climate Change is not a 'proven' fact. Second, if ANYONE should go after Exxon, it should be the Feds.
Give me a break. First of all, this whole lawsuit is nonsense because it's not factual. Climate Change is not a 'proven' fact. Second, if ANYONE should go after Exxon, it should be the Feds.
You need to read the actual court filing because that is not the legal basis on which the case resta. I believe I already stated this previously but you haven’t actually made the effort to look into this. What possible insight can you add to the conversation if you don’t even understand what the case is?
You need to read the actual court filing because that is not the legal basis on which the case resta. I believe I already stated this previously but you haven’t actually made the effort to look into this. What possible insight can you add to the conversation if you don’t even understand what the case is?
Before resigning this year amid allegations of sexual abuse, former New York Attorney General Eric Schneiderman spent nearly three years trying to harpoon his great white political whale— Exxon Mobil . His hunt failed to uncover malfeasance, but the AG’s office is suing Exxon anyway in a case that should be laughed out of court.
Acting Attorney General Barbara Underwood alleged in a civil suit this week that Exxon defrauded shareholders, including those in the state workers’ pension fund, by failing to incorporate the projected costs of future climate regulation in its planning and investment decisions. The lawsuit says Exxon essentially kept two sets of books—one for public disclosures and another for internal purposes.
Mr. Schneiderman initiated the roving investigation of Exxon’s business practices in November 2015. Exxon has since produced millions of pages of documents, but none have corroborated the political conspiracy theory that the oil and gas giant publicly downplayed the risks of climate change while preparing for them internally. No matter. The state AG’s office is now floating an alternative theory that is even more far-fetched.
Lo, the AG says Exxon’s public disclosures projected a “proxy cost” of climate regulation of $80 per ton of carbon in 2040 in developed countries and between $20 to $40 per ton in developing countries. Yet Exxon allegedly applied internally a “much lower price per ton to a small percentage of its GHG emissions, based on then-current regulations.” In other words, the AG claims Exxon was telling the truth to the public but lying to itself.
But as Exxon explained in a July motion challenging an AG subpoena, the two cost projections are used for distinct purposes. The “proxy costs” are used to forecast global energy demand while “greenhouse gas costs” projections are used internally to make particular investment decisions. Exxon has proprietary reasons for not publicly disclosing these internal estimates. And it must be accurate in cost projections if it wants its enormous and multiyear projects to earn a profit.
Each cost “is employed differently in Cash Flows,” Exxon added. “While Proxy Costs are indirectly reflected in line items associated with a commodity price, GHG Costs are incorporated, where appropriate, in various project economic metrics, including, but not limited to, operating expenses.”
Exxon says it has submitted no fewer than seven letters identifying more than three dozen documents “that show beyond legitimate dispute that the Company applies each cost in accordance with its statements” to investors. The charitable explanation is that this nuance eludes prosecutors who have no experience in business.
The lawsuit cites Exxon’s projects in the Alberta oil sands, which the AG says could lose billions of dollars due to future government climate regulation. Alberta this year imposed a $30 per ton tax on greenhouse gas emissions. Yet Alberta’s conservatives have pledged to repeal the unpopular tax if they win next year’s election, as they’re widely expected to do.
***
The reality is that nobody knows the future cost of carbon, and it will hinge as much on politics as on the evolving science and facts of climate change. President Trump sharply reduced the regulatory cost of carbon in the U.S. by rescinding Barack Obama’s Clean Power Rule, fuel-economy (Cafe) standards and methane regulations.
Liberals claim oil will become obsolete as electric cars replace vehicles that run on fossil fuels. But these are the same people who said in 2006 that cellulosic ethanol would soon be an economic alternative to fossil fuels.
The International Energy Agency reported this year that more oil investment is needed to keep up with increasing global demand: “Each year the world needs to replace 3 mb/d of supply lost from mature fields while also meeting robust demand growth. That is the equivalent of replacing one North Sea each year.”
Ms. Underwood is charging Exxon under New York’s notorious Martin Act, which doesn’t require evidence of intent to prove fraud in civil cases. She may be hoping that Exxon agrees to settle and pay a fine so she can declare victory. Yet in this case there’s not even evidence of fraudulent conduct, much less intent. The only party guilty of misrepresentation in this lawsuit is the New York AG.
Before resigning this year amid allegations of sexual abuse, former New York Attorney General Eric Schneiderman spent nearly three years trying to harpoon his great white political whale— Exxon Mobil . His hunt failed to uncover malfeasance, but the AG’s office is suing Exxon anyway in a case that should be laughed out of court.
Acting Attorney General Barbara Underwood alleged in a civil suit this week that Exxon defrauded shareholders, including those in the state workers’ pension fund, by failing to incorporate the projected costs of future climate regulation in its planning and investment decisions. The lawsuit says Exxon essentially kept two sets of books—one for public disclosures and another for internal purposes.
Mr. Schneiderman initiated the roving investigation of Exxon’s business practices in November 2015. Exxon has since produced millions of pages of documents, but none have corroborated the political conspiracy theory that the oil and gas giant publicly downplayed the risks of climate change while preparing for them internally. No matter. The state AG’s office is now floating an alternative theory that is even more far-fetched.
Lo, the AG says Exxon’s public disclosures projected a “proxy cost” of climate regulation of $80 per ton of carbon in 2040 in developed countries and between $20 to $40 per ton in developing countries. Yet Exxon allegedly applied internally a “much lower price per ton to a small percentage of its GHG emissions, based on then-current regulations.” In other words, the AG claims Exxon was telling the truth to the public but lying to itself.
But as Exxon explained in a July motion challenging an AG subpoena, the two cost projections are used for distinct purposes. The “proxy costs” are used to forecast global energy demand while “greenhouse gas costs” projections are used internally to make particular investment decisions. Exxon has proprietary reasons for not publicly disclosing these internal estimates. And it must be accurate in cost projections if it wants its enormous and multiyear projects to earn a profit.
Each cost “is employed differently in Cash Flows,” Exxon added. “While Proxy Costs are indirectly reflected in line items associated with a commodity price, GHG Costs are incorporated, where appropriate, in various project economic metrics, including, but not limited to, operating expenses.”
Exxon says it has submitted no fewer than seven letters identifying more than three dozen documents “that show beyond legitimate dispute that the Company applies each cost in accordance with its statements” to investors. The charitable explanation is that this nuance eludes prosecutors who have no experience in business.
The lawsuit cites Exxon’s projects in the Alberta oil sands, which the AG says could lose billions of dollars due to future government climate regulation. Alberta this year imposed a $30 per ton tax on greenhouse gas emissions. Yet Alberta’s conservatives have pledged to repeal the unpopular tax if they win next year’s election, as they’re widely expected to do.
***
The reality is that nobody knows the future cost of carbon, and it will hinge as much on politics as on the evolving science and facts of climate change. President Trump sharply reduced the regulatory cost of carbon in the U.S. by rescinding Barack Obama’s Clean Power Rule, fuel-economy (Cafe) standards and methane regulations.
Liberals claim oil will become obsolete as electric cars replace vehicles that run on fossil fuels. But these are the same people who said in 2006 that cellulosic ethanol would soon be an economic alternative to fossil fuels.
The International Energy Agency reported this year that more oil investment is needed to keep up with increasing global demand: “Each year the world needs to replace 3 mb/d of supply lost from mature fields while also meeting robust demand growth. That is the equivalent of replacing one North Sea each year.”
Ms. Underwood is charging Exxon under New York’s notorious Martin Act, which doesn’t require evidence of intent to prove fraud in civil cases. She may be hoping that Exxon agrees to settle and pay a fine so she can declare victory. Yet in this case there’s not even evidence of fraudulent conduct, much less intent. The only party guilty of misrepresentation in this lawsuit is the New York AG.
Right, what I'm referring to is exactly what the Wall Street Journal is also outlining. Where the WSJ article and myself agree on is that the case is not on the grounds of climate change and its impact but on potential shareholder misrepresentation when Exxon Mobil essentially made its own internal studies which projected a certain degree of shareholder risk but then gave different estimates in terms of what it communicated publicly to shareholders. The pursuit of such a court case does bring that in light while the argument of the different accounting practices and the level of murkiness involved is something to be decided in court. As a shareholder, I disagree with WSJ's opinions on this even if it may ultimately mean a bit of money out of my pocket as I believe there is some degree of technical merit and that this is ultimately better practice.
Right, what I'm referring to is exactly what the Wall Street Journal is also outlining. Where the WSJ article and myself agree on is that the case is not on the grounds of climate change and its impact but on potential shareholder misrepresentation when Exxon Mobil essentially made its own internal studies which projected a certain degree of shareholder risk but then gave different estimates in terms of what it communicated publicly to shareholders. The pursuit of such a court case does bring that in light while the argument of the different accounting practices and the level of murkiness involved is something to be decided in court. As a shareholder, I disagree with WSJ's opinions on this even if it may ultimately mean a bit of money out of my pocket as I believe there is some degree of technical merit and that this is ultimately better practice.
Bottom-line is that the NYS AG office should allocate their resources into other issues, like CORRUPTION IN ALBANY!
Bottom-line is that the NYS AG office should allocate their resources into other issues, like CORRUPTION IN ALBANY!
I am completely for prosecuting corruption in Albany which is why I wish Preet had run and would love to see another Moreland Commission and this time protected from being disbanded mid-run. This doesn't mean that the pursuit of one case means being incapable of pursuing another. If it is in the office's jurisdiction and there is reasonable cause to pursue a case, then it is the job of that office to do so and I support the idea of a public servant actually doing the job they were elected to do. I'm trying to see what merit you think comes from dropping the case against ExxonMobil here.
It is certainly within the purview of the NYS AG office, and regardless of the outcome, it is important to signal that murkiness in how a publicly listed company does its accounting practices and what it publicly states as its operating procedures and value is vital to a functioning free market where investors can have as great a level of confidence as possible that they are not being mislead in their investments. It's fine to not know the future, because there is no crystal ball, but that's different from simply stating something to shareholders on how they operate and are valued and then operating in a different way. I understand this is not a completely straightforward case, but this is why there is an investigation and a trial. The short of it is that your original posts on this completely missed what the investigation and lawsuit are about, but somehow you read some headline about climate change and the AG and started foaming at the mouth without knowing much of anything. That's very unfortunate, but as far as I know, not too bad since it's unlikely that you are a candidate for AG or will be anytime soon.
Last edited by OyCrumbler; 11-06-2018 at 12:53 PM..
America really is great, isn't it? I stand by my "all politicians are crooks".
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I stand by my "all politicians are crooks".
