Congressional, Court Climate Probes Put More Pressure on Big Oil

Sept. 28, 2021, 10:00 AM

Congressional Democrats are wading into the battle over climate misinformation claims against oil companies, a move that parallels a sea of litigation from states, counties, and cities looking to put those companies on the hook for the local impacts of global warming.

Though climate litigation has been moving slowly in U.S. courts, some experts see the growing pile of calls for energy company climate liability in and out of court as a pressure-point to speed the process.

Democrats on the House Oversight and Reform Committee—led by Chairwoman Carolyn B. Maloney (D-N.Y.) and Ro Khanna (D-Calif.)— sent letters to the heads of Exxon Mobil Corp., BP Plc, Chevron Corp. and other major oil and gas companies looking to dig up information on a “coordinated effort to spread disinformation” on climate change.

The leaders were also asked to testify at an Oct. 28 hearing. Both actions come after a top Exxon lobbyist was secretly filmed by Greenpeace earlier this year, acknowledging that the energy giant fought against early climate efforts.

“At one point the chickens are going to come home to roost, and I think those hearings will probably accelerate it,” said Robert Percival, director of the environmental law program at the University of Maryland.

Court Parallels

The request isn’t a new one. Plaintiffs in long-running climate liability cases want that same information, but have been fighting lengthy courtroom battles over technical jurisdiction issues that have caused delays.

“Congress is aware of all these cases, and it’s aware of all the information that’s coming out of them,” Loyola University New Orleans law professor Karen Sokol told Bloomberg Law. “Potentially, what comes out in these hearings could be used as evidence.”

The American Petroleum Institute, one of the groups targeted in the investigation and litigation, “welcomes the opportunity to testify again before the House Oversight Committee and advance our priorities of pricing carbon, regulating methane, and reliably producing American energy,” Bethany Aronhalt, a spokesperson for the group, said in a statement on the hearing.

The probe for information isn’t only congressional climate liability push in recent weeks. As in the litigation, lawmakers floated the prospect of companies paying damages for climate impacts.

Democrats led by Sen. Chris Van Hollen (D-Md.) introduced draft legislation in August that would tax “the largest U.S.-based fossil fuel extractors and oil refiners and foreign-owned companies” based on their emissions.

Such legislation is likely to face an uphill struggle, with predominately Republican opposition to imposing taxes or targeting the energy industry.

Tobacco Deja Vu

Court watchers have long said that climate liability litigation is following a similar playbook to landmark tobacco class actions targeting cigarette advertising.

Percival noted that embattled companies in those cases also underwent congressional scrutiny while enmeshed in waves of litigation over claims including negligent advertising and consumer protection.

Former Rep. Henry A. Waxman (D-Calif.) spearheaded many of those efforts, including one well-known hearing before a subcommittee of the House Energy and Commerce Committee at which tobacco executives said under oath they didn’t think nicotine was addictive.

“The parallels to tobacco litigation are just absolutely striking—the same sort of thing of coordinated disinformation campaigns to conceal the dangers of climate change, just like they did they conceal the dangers of smoking,” Percival said.

Coordinated Efforts

Energy companies insist that climate lawsuits are without merit, arguing in part that the cases target legal oil and gas production for a problem with a global scope.

Oil and gas companies and trade groups also claim that climate liability actions are a coordinated “conspiracy” by legal and environmental groups, and funded by the Rockefeller Family Fund.

The fund was named for business tycoon John D. Rockefeller, founder of Standard Oil, yet divested its holdings in fossil fuel companies.

“The idea for this hearing stems from the same activist conference that spawned climate litigation, where activists hashed out their strategy to enlist both Congress and state attorneys general to subpoena companies’ documents,” according to Will Allison, a spokesperson for Energy In Depth, a project of the Independent Petroleum Association of America.

‘Sound and Fury’

Moves like this propel the U.S.-based misinformation movement forward, though the substantive impacts of both the litigation and the probes have yet to be realized.

The House probe may amount to political “Sturm und Drang,” according to Vermont Law School professor and senior counsel Pat Parenteau, adding that the real impacts of these battles comes from the noise they make to risk-averse financial institutions like banks and brokerage houses that fund energy projects.

“They’re paying attention to the news, they’re watching what’s happening with these cases, they’re watching investors asserting more control,” Parenteau said. “It’s a cumulative weight of evidence that the world really is changing.”

Other countries and international actors have been much more successful in courts holding energy companies and even governments to account over climate, so some observers see actions like these keep the pressure up for financial institutions while U.S. litigation trudges through a jurisdictional slog.

Probes are necessary in this “critical juncture” at the edge of a fossil fuel economy and transition, Sokol said.

“What comes out and congressional investigations, what comes out if these do get to trial we get through discovery, will be part of telling a much-needed story,” she said.

To contact the reporter on this story: Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloombergindustry.com; Chuck McCutcheon at cmccutcheon@bloombergindustry.com

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