Fmr Exxon CEO: Climate Change With Us Forever More



Fmr Exxon CEO: Climate Change With Us Forever More
Ex-Exxon Mobil CEO Rex Tillerson took the witness stand and explained that the company knew for years how climate change was a significant threat to the world.

(Bloomberg) -- It’s rare for a current or former leader of one of the world’s largest energy producers to testify under oath about climate change. That’s why a New York courtroom was packed on Wednesday to see ex-Exxon Mobil Corp. Chief Executive Officer Rex Tillerson take the witness stand and explain that the company knew for years how it was a significant threat to the world.

“We knew, we knew it was a real issue,” Tillerson said. “We knew it was a serious issue and we knew it was one that’s going to be with us now, forevermore, and it’s not something that was just suddenly going to disappear off of our concern list because it is going to be with us for certainly well beyond my lifetime.”

Tillerson, who resigned in 2016 to become President Donald Trump’s first Secretary of State, was testifying in a trial over a securities fraud lawsuit by the New York attorney general. The state alleges Exxon intentionally misled investors about the way the company accounted for the financial risk of climate change. Tillerson rejected the claim, but also took the opportunity to weigh in on the existential threat of global warming.

During 3 1/2 hours of testimony, he cast Exxon in a favorable light, in contrast to claims by environmentalists and some government officials that the company helped trigger climate change and exacerbated the crisis by hiding it from the public.

Tillerson didn’t deny Exxon’s role in creating the problem -- which wasn’t what the trial was about -- but in his nuanced view, the company had done its best to address the issue once it became apparent. He also said there may be plenty of blame to share, given that Exxon was providing products demanded by society.

Humanity has a hard time making changes to address the impacts of climate change because of the world’s never-ending demand for economic development and improved standards of living, which is tied directly to fossil fuels, he said.

‘Keep Growing’

“If the economies are going to continue to not just perform, but grow, if people are going to continue to want to improve their quality of life, sustain their quality of life, they’re going to have to have energy, a lot of it, and the demand is going to keep growing,” Tillerson said.

“So there’s this natural tension” between that desire for growth and fixing climate change, “and that’s really the challenge that policymakers and legislators are confronted with,” he said.

One example of that challenge may be in Alberta, Canada, where Exxon has multibillion dollar oil sands projects. It may not be unrealistic to assume that those projects will operate for decades without an increase in provincial taxes on greenhouse gas emissions, he said.

“We have been through many changes in Alberta provincial government,” Tillerson said. “What I do know is the Alberta government doesn’t want to put the oil sands out of business. It’s important to them from a jobs, economic, tax revenue. And they always -- in Alberta, the industry has always had a very kind of healthy dialogue with them, and they listened.”

The Alberta projects were part of the case brought by New York, which claimed Exxon was deceiving investors by predicting the province’s tax on greenhouse gas would remain steady, even as the company predicted rising levies on other projects through 2040.

Estimating Cost

The ex-CEO was also asked to explain why Exxon put in place proxy costs for carbon to estimate demand and greenhouse gas costs for expenses when it wasn’t required to do so. (Those costs are at the center of the New York lawsuit. The state claims they were a sham.)

“We would have been irresponsible in our positions if we didn’t think about the strategic implications of this,” Tillerson said.

But such costs weren’t the same everywhere Exxon operates, he said.


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