Alberta oilsands part of second U.S. lawsuit vs. Exxon over carbon pricing

Company accused of misleading investors about what climate change measures could cost operations

The logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange, Monday, April 23, 2018. THE CANADIAN PRESS/AP-Richard Drew

There is a second fraud lawsuit in the United States against ExxonMobil involving Alberta’s oilsands.

The lawsuit, filed on Thursday by the state of Massachusetts, accuses the oil multinational of misleading investors about what climate change measures could cost its operations — especially those in the oilsands.

“ExxonMobil’s misrepresentations falsely justified to investors its riskiest long-term investments, including Canadian bitumen oilsands projects,” says the state’s complaint, which has not been tested in court.

A similar action by New York’s attorney general went to trial this week.

An Exxon lawyer, calling them “bizarre and twisted,” has denied the accusations in that case. He said the allegations fail to take into account all the ways Exxon priced carbon risk into its decisions.

As in the New York case, Massachusetts alleges that Exxon told investors it evaluated its projects with a high and increasing price on carbon when it used a much lower figure that remained stable.

It points to extensive public documents and speeches by company executives assuring investors that projects were assessed with a carbon price as high as $80 a tonne.

It cites internal company directives suggesting the price that Exxon actually used was no more than $40 a tonne.

The lawsuit alleges the misrepresentation was even bigger for the oilsands, where Exxon is a major player through its Canadian subsidiary Imperial Oil.

Imperial has declined comment on the fraud cases and referred questions to its parent company.

The lawsuit quotes internal documents referring to an “alternate methodology.” It alleges the company would evaluate risk based on legislation that was in place at the time.

“For certain Canadian oilsands projects … ExxonMobil assumed … that existing climate legislation would remain in place, unchanged, indefinitely into the future.”

Alberta rules in place in 2015 were based on emissions intensity and have been calculated to have imposed a cost of $15 a tonne on carbon emissions.

“ExxonMobil applied these flat, lower proxy costs to both investment decisions at Canadian oilsands projects and reserves assessments,” the lawsuit claims.

“For the purposes of evaluating company reserves, ExxonMobil assumed that no new costs would be imposed in Alberta and that only 20 per cent of emissions would be taxed, indefinitely into the future.”

The “alternate methodology” had the effect of reducing apparent carbon costs at Imperial’s Kearl oilsands mine by 94 per cent, the lawsuit alleges.

READ MORE: 15 Canadian youths to sue Ottawa for not acting on climate change

The lawsuit also accuses Exxon of deceiving the public.

“ExxonMobil claims that it is ‘working to decrease our annual carbon footprint,’ while in fact the company continues its unabated, business-as-usual rapid exploration, development and production of fossil fuel reserves, including its most carbon-intensive reserves, such as those in the Canadian oilsands.”

The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Looking back – the enduring legacy of Clark Burlingham

Burlingham was the Town’s first recreation director

Alberta reports 257 new cases of COVID-19

Central zone has 157 active cases

New hospice suite officially opened at Points West Stettler on Aug. 7th

“As soon as you walk into it, it’s comfortable which makes it easier for a guest to settle into right away.”

Much to explore at the Big Valley Historical Society Museum

Plenty of history packed into a diverse and extensive collection

Update: Possible drowning at Pigeon Lake involved man and woman from Edmonton

Bodies recovered from Pigeon Lake’s northeastern shores.

Canada to match donations to Lebanon relief

Canada is directing all of its aid for this crisis directly to humanitarian organizations, not the Lebanese government

Rent-relief program becomes new front in fight between Liberals, opposition

Opposition trying to draw parallels between decision to have Canada Mortgage and Housing Corp. run program and the WE controversy

Ottawa sets minimum unemployment rate at 13.1% for EI calculation

Statistics Canada says the unemployment rate was 10.9 per cent in July

Oilers 50/50 raffle delayed as team resolves errors, offers refunds

Alberta fans who want to void any ticket purchases will have until noon Thursday

Sylvan Lake couple donates $850,000 to AACS

The doantion will be put towards a new X-Ray machine for the facility

Who can dismiss the Governor General? A look at protocols and possibilities

The Governor General is appointed by the Queen, on the advice of the prime minister

Second phase of NHL draft lottery set for Monday

Each club eliminated from qualifying round has a 12.5 per cent shot at the No. 1 pick

Collapse of Nunavut ice shelf ‘like losing a good friend:’ glaciologist

The ice shelf on the northwestern edge of Ellesmere Island has shrunk 43 per cent

13-year-old charged in death of boy, 10 in Maskwacis

The RCMP Major Crimes Unit have laid a manslaughter charge against a 13-year-old boy from Maskwacis.

Most Read