Wednesday, October 20, 2021
67.8 F
Fort Worth

Fighting suit, Exxon says it is accounting for climate rules

🕐 2 min read

NEW YORK (AP) — Exxon Mobil says it has prepared itself for the impact climate change regulations will have on its finances, denying allegations from New York’s attorney general that the energy giant has deceived the public about how stricter emissions rules will affect its business.

Attorney Ted Wells said in a trial that began Tuesday that former Exxon CEO Rex Tillerson created a robust, effective system to account for increasing climate regulations in 2007.

The state has accused Exxon Mobil Corp., which is based in Irving, Texas, of misleading investors about its financial health as governments impose stricter regulations to combat global warming.

“Exxon Mobil did nothing wrong. Absolutely nothing wrong,” Wells said. “The evidence will show that the allegations in the complaint are bizarre and twisted and not connected to the reality of the truth.”

Exxon has not always applied the appropriate regulation costs when estimating the increasing price of climate rules on its carbon-intensive business, said Kevin Wallace, an attorney arguing for New York’s Attorney General Letitia James.

In some cases, Exxon used existing local regulations to calculate the cost of new projects, when it should have assumed regulations would become stricter, and more costly, over time, Wallace said.

“The company failed to manage the risks in the ways it promised,” Wallace said. “The cost of that failure is staggering.”

Wallace asked for a comprehensive review and $476 million to $1.6 billion in damages to shareholders.

“Having been misled on these issues, investors are entitled to an accurate picture,” Wallace said.

Wells countered that Exxon has two distinct ways of accounting for increasingly strict climate regulations. One metric, called “proxy costs,” deals with the demand side of Exxon’s business, and attempts to predict how demand for oil and gas may decrease around the world due to regulations. Another measure, known as “GHG costs,” or greenhouse gas costs, measures how local regulators may tax, for example, emissions from a refinery.

Exxon examines those costs, where appropriate, when it evaluates new projects, to determine the project’s viability, Wells said.

“This notion that we would be using lower costs than are appropriate, it makes no sense,” Wells said. “We would not be in the business of cheating ourselves.”

Wells also said the state’s planned witnesses could not have been materially harmed as they claimed, because they were not making investment decisions.

Related Articles

Our Digital Sponsors

Latest Articles

Texas Rangers
Fort Worth Business Press Logo
This advertisement will close in
00
Months
00
Days
00
Hours
00
Minutes
00
Seconds
seconds..
Click here to continue to Fort Worth Business Press

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

This field is for validation purposes and should be left unchanged.

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate