Monthly Archives: December 2016

Going the rounds

Received from a friend:

Obama, Hillary and Trump are standing at the throne of heaven.

GOD looks at them and says, “Before granting you a place at my side I must ask you what you have learned, what you believe in. God asks Obama first: “What do you believe?”

He thinks long and hard, looks God in the eye, and says,
“I believe in hard work, and in staying true to family and friends. I believe in giving.  I was lucky, but I always tried to do right by my countrymen”.
God can’t help but see the essential goodness of Obama, and offers him a seat to his left.
Then God turns to Hillary and asks, “What do you believe?”
Hillary says,
“I believe in passion, discipline, courage and honor are the fundamentals of life. Like Obama I believe in hard work.  I, too, have been lucky, but win or lose; I’ve always tried to be a true patriot and a loyal American.”
God is greatly moved by Hillary’s high-pitched eloquence, and he offers her a seat to his right.
Finally, God turns to Trump and says, “And you, Donald, what do you believe?”
Trump replies,
“I believe you’re in my seat.”

EXXON CEO for Secretary of State?

Today’s NY Times seems to think Trump Is going to select Rex Tillerson, CEO of EXXONMobil, to be Secretary of State. An interesting consideration, not mentioned by the press, is that the Rockefeller Foundation Fund has requested that state’s Attorneys General investigate to determine whether ExxonMobil should be found guilty of fraud for claiming their booked reserves are safe from being invalidated by the reaction to global warning.

Here’s an excerpt from an article in The New York Review of Books giving background on the matter.

The Securities and Exchange Commission requires companies to disclose known business risks to their investors, and Exxon’s leaders have been acutely conscious of the changing climate’s danger to the oil business for almost forty years. The company didn’t start telling its shareholders about that danger until 2007,16 however, and in our opinion has never disclosed its full scope. To take just one very important example, the valuation of any oil company depends largely on its “booked reserves,” meaning the quantities of buried oil and gas to which it owns the rights.17 Ultimately, however, ExxonMobil may not be able to sell most of its booked reserves, because the world’s governments, in trying to prevent catastrophic climate change, may have to adopt policies that make exploiting them economically unfeasible.

In 2013 the Intergovernmental Panel on Climate Change (IPCC) formally endorsed the idea of a global “carbon budget,” estimating that, to keep warming to the two degrees Celsius then considered the largest increase possible without incurring catastrophe, humanity could only burn about 269 billion more tons of fossil fuels.18 (We are currently burning about ten billion tons a year.)19 As of 2009, however, the world had 763 billion tons of proven and economically recoverable fossil fuel reserves.20

If ExxonMobil can sell only a fraction of its booked reserves—if those reserves are “stranded”—then its share price will probably decline substantially. The company has long been familiar with the concept of a carbon budget, but claims to believe it is “highly unlikely” that the world will be able to comply with the IPCC’s recommendation for such a budget. In 2014 it stated, “We are confident that none of our hydrocarbon reserves are now or will become ‘stranded.’”21 Because it is a matter of the highest urgency that humanity find a way to adopt the IPCC’s global carbon budget, however, it seems to us that ExxonMobil has been much too sanguine about its business prospects.22 As a Baltimore Sun editorial about the company’s long history of climate deceptions put it, “Surely there ought to be consequences if a for-profit company knowingly tells shareholders patent falsehoods (and then those investors make decisions about their life savings without realizing they’ve been lied to).”23

It is up to government officials, not public interest advocates, to determine whether ExxonMobil’s conduct has violated any state or federal laws within the relevant statutes of limitations. Recognizing this, the Rockefeller Family Fund (RFF) informed state attorneys general of our concern that ExxonMobil seemed to have failed to disclose to investors the business risks of climate change. We were particularly encouraged by Schneiderman’s interest in this matter, because New York’s Martin Act is arguably the most powerful tool in the nation for investigating possible schemes to defraud.24 If ExxonMobil fully complies with Schneiderman’s subpoena, he will be able to make a thorough review of the company’s disclosures to shareholders on climate change and the history of its internal knowledge. He will then be able to decide whether or not to hold ExxonMobil legally responsible based on all the facts.

No state AG’s office can easily compete with ExxonMobil’s legal resources, however, not even New York’s. Schneiderman has been intrepid so far, but would benefit greatly from cooperation from the AGs of Massachusetts, California, and other states, as well as from the federal government. ExxonMobil has already launched aggressive legal actions against the Virgin Islands, Massachusetts, and New York in response to their investigations, and this may deter others from joining Schneiderman’s efforts.25 Still, we hope that other AGs will recognize how dangerous it is when a corporation can use its wealth to discourage enforcement of possible violations of laws governing securities and consumer protection. If they believe the laws of their states may have been violated, they should initiate investigations of their own.

Much of the rest of the article is devoted to an analysis of actions that have been taken by ExxonMobil that indicate that significant company internal policies have reflected a belief in the reality of global warning.