Why Big Oil faces court cases that echo the litigation against Big Tobacco in the ’90s
How much did the oil industry know about the impact of fossil fuel emissions on the climate? When did they know it? And what did they do with that knowledge?
Those are the central questions in a series of court cases attempting to hold companies accountable for their role in climate change.
It’s been called Big Oil’s “Big Tobacco” moment, echoing the famous litigation that exposed how tobacco companies deliberately generated scientific uncertainty even though they knew that cigarettes cause cancer.
“They are brought under very similar legal theory,” said Ann Carlson, an environmental law professor at the UCLA School of Law. “That is that the companies are creating a public harm or public nuisance by misleading the public about whether their product actually causes harm.”
After years of pretrial wrangling, the first Big Oil case began in civil court in New York on Tuesday. Lawyers for Exxon Mobil face accusations from the state’s attorney general that the company misled shareholders about how it was calculating the cost of future government policies to limit carbon emissions.
“The New York attorney general’s allegations are false,” Exxon Mobil spokesperson Steven Soper told CBC News in an email. “We tell investors through regular disclosures how the company accounts for risks associated with climate change. We are confident in the facts and look forward to seeing our company exonerated in court.”
Meanwhile, a similar investor case is being investigated by the attorney general of Massachusetts.
There are more than a dozen other lawsuits in the U.S. against the industry at various stages in the legal process. Those cases have been launched by municipal and state governments, including New York City, Baltimore, San Francisco and Rhode Island, all attempting to hold oil companies accountable for climate-related damages.
The details of the cases differ, but they share a common thread.
“They are based on allegations that the oil companies engaged in systematic misrepresentation of information, [that they] kept sort of one set of information internally and then told the public something else,” said Carlson.
In Rhode Island’s complaint against nearly two dozen energy companies, the state describes “a co-ordinated, multi-front effort” by the industry “to conceal and deny their own knowledge of those threats.” It alleges the companies “have known for decades that those impacts could be catastrophic and that only a narrow window existed to take action before the consequences would be irreversible.”
Canadian cities considering climate litigation
In Canada, there are similar legal rumblings against the industry.
Toronto city council has referred a notice of motion to staff to research “the long-term cost implications of climate change to City of Toronto’s infrastructure and programs.” Staff are also instructed to examine “any legal avenues to pursue compensation for these costs from major greenhouse gas emitters.”
Victoria is currently getting a legal opinion, which will be offered free to other cities.
And more than a dozen B.C. municipalities have sent a letter asking various oil companies to pay their share of climate-mitigation costs.
Andrew Gage is with West Coast Environmental Law group in Victoria, which is urging municipalities to launch court cases against the industry to try to recover damages from sea-level rise and other climate-related impacts.
“Municipalities can’t afford to not try to clarify the legal obligations of these companies,” he said. “What we’ve suggested is the local governments in B.C. need to be looking at a class action lawsuit that would allow a number of communities to pool their resources and work together to hold these really large global companies accountable.”
What Big Oil knew and when
The essential argument for most of the lawsuits is that the oil industry knew that its products were affecting the climate, but instead of alerting the public and changing their business model, companies deliberately promoted scientific uncertainty about climate change to delay laws that might limit carbon emissions.
For evidence, many of the cases rely on a series of internal company documents uncovered by investigative journalists that suggest oil industry scientists and executives were aware, decades ago, that fossil fuel emissions were changing the world’s climate.
He published a confidential Shell report from 1988 called “The Greenhouse Effect” that contains a dire warning: “By the time the global warming becomes detectable it could be too late to take effective countermeasures to reduce the effects or even to stabilize the situation.”
Mommers said the document illustrates that the company accepted the climate predictions being made by independent scientists.
“This is a very detailed analysis of what the science at that point is saying about CO2 emissions and about their impact on climate,” he said. “And it’s a very explicit report and issues very strong warnings.”
Mommers also uncovered a film Shell produced in 1991 called Climate of Concern, warning about the risks of climate change and suggesting possible solutions.
“[Shell] made it as a documentary to be seen by the public,” he said. “They showed it in libraries, in schools, in universities, and the explicit purpose was to sort of issue a warning and tell people that this is going on, this is threatening our future, and we should act on it.”
Mommers said he was amazed by how much the company knew about climate change at the time.
“Already Shell in 1991 could sum up all the facts about climate change, all the threats that we all know by heart nowadays,” he said. “It was very shocking actually to see how much knowledge was already there.”
Shell Canada says the film was part of an education series made by the company’s documentary film unit.
“Shell’s position on climate change has been publicly documented for more than two decades,” spokesperson Jana Masters wrote in an email to CBC News.
Other investigative reporters have published industry documents from Exxon that suggest company officials were aware of the scientific consensus on climate change in the 1970s.
“There is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon-dioxide release from the burning of fossil fuels,” a senior scientist with Exxon told company executives in 1977.
Instead of telling the public what they knew about the impending risks from their products, the court documents accuse the industry of trying to delay potential policy changes by fuelling political uncertainty and climate skepticism. Baltimore’s official court filing states:
“Defendants concealed the dangers, sought to undermine public support for greenhouse gas regulation, and engaged in massive campaigns to promote the ever-increasing use of their products at ever greater volumes.”
Mommers said the oil companies realized that if governments were to take real action to reduce carbon emissions, it would hurt their business.
‘Emphasize the uncertainty’
An Exxon memo from 1988 acknowledges the climate threat, stating: “The greenhouse effect may be one of the most significant environmental issues for the 1990s,” and that “the principal greenhouse gases are byproducts of fossil fuel combustion.”
But the same memo also reveals “Exxon’s position” was to “emphasize the uncertainty in scientific conclusions” and to “resist the overstatement and sensationalization of potential greenhouse effect which could lead to noneconomic development of nonfossil fuel resources.”
Exxon Mobil told CBC News in an email that the news reports based on those internal company documents do not accurately reflect the company’s position on climate change.
“News reports that claim we reached definitive conclusions about climate change decades before the world’s experts are simply not accurate,” Soper wrote. “Climate change is a serious issue that will require the collective efforts of governments, individuals and companies to address in a meaningful way.”
If one of them succeeds, we’re going to see the floodgates open and all sorts of new cases.– Ann Carlson, environmental lawyer
Shell Canada spokesperson Jana Masters said the company doesn’t believe “the courtroom is the right venue to address climate change.”
“We agree that action is needed now on climate change, so we fully support the Paris Agreement and the need for society to transition to a lower-carbon future,” she wrote in an email to CBC.
“We believe that smart policy from government, supported by inclusive action from businesses like ours and from civil society, is the best way to reach solutions and drive progress.”
Ann Carlson, the environmental law professor at UCLA, said she has provided pro bono consultation for some of the municipal cases but is not otherwise involved in the litigation. She said if those cases make it to trial, government lawyers will be able to interrogate oil company executives, which could reveal more information about what the industry knew about climate change and when.
‘Decent chance of success’
So far, the New York attorney general’s case against Exxon is the only one that is actively unfolding in an open courtroom. The other cases are at various stages in the legal process.
“I think the cases do have a decent chance of success,” said Carlson.
She said the cost to industry could be enormous if companies are forced to help municipalities pay to adapt to rising sea levels, or for the costs of wildfire and storm damage.
And all it would take is one successful case, she said.
“If one of them succeeds, we’re going to see the floodgates open and all sorts of new cases filed by other municipalities, other states, alleging damages caused by the oil companies’ failure to warn, failure to do anything about their own behaviour that was causing climate change.”