69.49 +0.12 (0.17%)
After hours: 6:48PM EST
|Bid||69.42 x 3100|
|Ask||69.46 x 1000|
|Day's range||69.33 - 70.18|
|52-week range||64.65 - 83.49|
|Beta (3Y monthly)||0.98|
|PE ratio (TTM)||20.21|
|Earnings date||30 Jan 2020 - 3 Feb 2020|
|Forward dividend & yield||3.48 (4.99%)|
|1y target est||79.02|
The Zacks Analyst Blog Highlights: ExxonMobil, ConocoPhillips, Valero Energy, Marathon Petroleum and Phillips 66
Papua New Guinea's petroleum minister on Friday flagged a standoff in talks with Exxon Mobil Corp tied to a $13 billion gas expansion, saying the U.S. oil giant was unwilling to negotiate on the country's terms. The state's negotiating team had set out draft terms for negotiations on developing the P'nyang gas field, which Petroleum Minister Kerenga Kua said were in line with international standards and would ensure a "fair deal" for PNG. "It is disappointing Exxon has refused to even consider these terms and we urge them to reconsider their position," Kua said in a statement emailed to Reuters.
Investing.com - The Saudi theatre act to prop up the oil market ahead of taking Saudi Aramco public is already working with crude prices getting another 2%-plus pop on Thursday on a news leak that OPEC’s existing production cuts will be extended until June.
The federal government's EIA report revealed that crude inventories rose by 1.4 million barrels, compared to the 1.6 million barrels increase that energy analysts had expected.
Exxon Mobil plans to sell up to $25 billion of oil and gas fields in Europe, Asia and Africa in its biggest asset sales for decades, seeking to free up cash to focus on a handful of mega-projects, according to three banking sources. It would represent an ambitious attempt by Chief Executive Darren Woods to catch up with competitors who carried out sweeping portfolio reviews and sold swathes of assets following the 2014 market crash. Exxon's shares have underperformed its major rivals' in recent years.
In the third quarter, global dividends hit a record, but the annual growth has decelerated sharply, signaling that "a marked slowdown is under way."
Investing.com – Volatility was back forcefully in oil Wednesday with the market jumping nearly 3% to recoup almost all it lost in the previous session.
Oil majors have piled into America’s large shale plays and picked up the slack where smaller drillers have failed, but it remains to be seen if they can turn a profit in the sector
(Bloomberg) -- When Securities and Exchange Commission Chairman Jay Clayton handed a policy win to corporate executives this month, he pointed to a surprising source of support: a mailbag full of encouragement from ordinary Americans.To hear Clayton tell it, these folks are really focused on the intricacies of the corporate shareholder-voting process. “Some of the letters that struck me the most,” he said at a commission meeting in Washington, “came from long-term Main Street investors, including an Army veteran and a Marine veteran, a police officer, a retired teacher, a public servant, a single mom, a couple of retirees who saved for retirement.” Each bolstered Clayton’s case for limiting the power of dissenting shareholders.But a close look at the seven letters Clayton highlighted, and about two dozen others submitted to the SEC by supposedly regular people, shows they are the product of a misleading -- and laughably clumsy -- public relations campaign by corporate interests.That retired teacher? Pauline Yee said she never wrote a letter, although the signature was hers. Those military vets? It turns out they’re the brother and cousin of the chairman of 60 Plus Association, a Virginia-based advocacy group paid by corporate supporters of the SEC initiative. That single mom? Data embedded in the electronically submitted letter says someone at 60 Plus wrote it. That retired couple? Their son-in-law runs 60 Plus.“I never wrote a letter,” said one of the retirees, Vytautas Alksninis, reached by phone at his home in Connecticut. “What’s this all about?”Then there’s the public servant Clayton mentioned. Marie Reed’s letter has sharp words for proxy advisers, firms that counsel fund companies on how to vote at shareholder meetings. But when reached by phone in California, the retired state worker said she wasn’t familiar with the term. She said the letter originated with a public-affairs firm that contacted her out of the blue.“They wrote it, and I allowed them to use my name after I read it,” she said. “I didn’t go digging into all of this.”The SEC declined to comment on any irregularities with the letters. In a Tuesday interview, Clayton sidestepped a question about how the agency ensures comment letters are genuine. He did emphasize that the regulator’s potential revamp of shareholder voting rules are proposals, adding that there will be ample time for people on both sides to weigh in before any changes are finalized.“We welcome input in all ways,” Clayton said in the interview with Bloomberg Television’s David Westin. “On this issue, where there are a lot of different views and a lot of different interests, we encourage people to come in and talk to us, send us their comments.”Unusual ErrorEven a casual reading of the letters shows something amiss. Four of the seven bear the same unusual error -- an out-of-context phrase inserted into the SEC’s mailing address. The same mistake turns up in at least 20 other letters submitted by supposedly ordinary Americans in support of the change. It’s an inadvertent digital fingerprint revealing the scope of the campaign.At issue is the proxy process, the rules for how corporations conduct shareholder votes, such as when directors stand for re-election at annual meetings. Most of the time, management wins in a landslide. But shareholders occasionally revolt over excessive pay or mismanagement, or a small investor forces a vote on an issue that management doesn’t endorse.In recent years, more small shareholders have been proposing resolutions about social or environmental issues such as climate change. And investment managers that control large numbers of votes, such as BlackRock Inc., have begun prioritizing these topics as well, arguing that they’re relevant to the long-term sustainability of business models. That’s an unwelcome change for some corporate boards, especially in the fossil-fuel industry.Last year, the National Association of Manufacturers helped form the Main Street Investors Coalition to oppose what it calls the “politicization” of the investment process and to argue that fund managers and boards should focus on maximizing profits. One of its priorities is changing shareholder voting rules.Although the coalition has other members, NAM provided most of its initial funding, according to a person with knowledge of the arrangement who spoke on condition of anonymity. The manufacturers’ association represents corporate giants such as Exxon Mobil Corp. and Chevron Corp.NAM said in a statement that it didn’t fund 60 Plus or direct any advocacy efforts on the SEC issue. Chevron wouldn’t comment on the coalition but acknowledged in a statement that it sometimes works with trade associations to “help inform their understanding of issues.” Exxon Mobil said it had no immediate comment.Public CommentsLast year, Clayton signaled he was considering changes to the rules and issued a call for public comments. Letters poured in. Most were from investment firms, corporations, trade groups and other interested parties that openly identified themselves. Many fund managers wrote to say some of the changes under consideration would be counterproductive.The National Association of Manufacturers, Exxon Mobil and Chevron all called for new limits on shareholders’ proposals. So did two ordinary citizens who identified themselves as members of Main Street Investors. Other letters were ostensibly written by regular folks.But more than two dozen of them appear to have ties to 60 Plus, a member of the Main Street Investors Coalition. While the nonprofit group calls itself an advocate for senior citizens’ issues, it routinely takes money from corporations and advocates for their causes on issues as varied as sugar subsidies and Alabama utility commissioners.The group didn’t cast a wide net in recruiting letter-writers. Names included those of a woman who used to work at 60 Plus’s accounting firm; a former secretary at 60 Plus; and various friends and relatives of Saul Anuzis, the 60 Plus president. None mentioned a connection to the organization.One letter bore the name of Chad Connelly. In an email, Connelly acknowledged being friends with Anuzis but disavowed the letter. “Someone apparently used my name,” he wrote. “That’s not a letter I’ve ever even seen.”Even Scott Hogenson, a contractor for 60 Plus who has appeared in the press as its spokesman, submitted a comment. The letter gives his name as S. Alan Hogenson and doesn’t mention his relationship to the group. In an interview, Hogenson said he wrote the letter and stands by it.Anuzis, the 60 Plus president, acknowledged that his group recruited submitters, provided drafts and, in two cases, sent letters on members’ behalf. He also acknowledged getting money from members of the coalition. “We don’t get paid for specific projects,” he said in an interview. “We get contributions from members who are part of the coalition. We’re not getting paid for a specific letter.”Anuzis said the project aligns with 60 Plus’s policy goals and that no names were used without permission. Those who said they hadn’t agreed, such as his in-laws, were mistaken. “They are 80-some-years old,” he said. “This happened months ago. I’m sure it’s not top of their minds.”Clandestine AidTwo letters point to another source of clandestine aid for the coalition. Reed, the retired state worker from California whose letter was cited by Clayton, said the man who provided her with a letter worked at FSB Core Strategies, a California public-affairs shop, and said he was working on behalf of a group called Protect Our Pensions. Another SEC letter containing similar phrases, also cited by Clayton, came from a California sheriff who said in a 2017 interview that he was introduced to Protect Our Pensions by the same FSB staffer. An FSB executive didn’t respond to requests for comment.Protect Our Pensions, whose talking points align with those of the fossil-fuel industry, was the subject of a 2017 Bloomberg Businessweek article showing it was put together by corporate public-affairs employees and that some of its alleged members, including the retired firefighter identified as its founder, said they had nothing to do with it or couldn’t remember agreeing to join.Opponents of changes to the voting system stuffed the SEC’s mailbox too. The agency reported getting more than 18,000 identical form letters supporting the current rules. Those letters were obvious duplicates and are grouped together on the SEC’s comments page. Clayton’s speech didn’t mention them.In his Nov. 5 remarks, Clayton unveiled proposals along the lines of those pushed by Main Street Investors Coalition and its corporate backers that would shift power from investors to corporate boards. In addition to Clayton, who was appointed by President Donald Trump, the changes are backed by two Republicans on the five-member commission. For the changes to take effect, the SEC will have to vote again to finalize the rules after a 60-day public comment period.The SEC’s proposal would increase the amount of stock newer shareholders must own to get a proposal on the ballot, aligning with corporate claims that many resolutions are wastes of time and money. Under current rules, investors must have owned at least $2,000 of stock for a year before they can submit resolutions. The SEC’s proposal would raise that dollar threshold to $25,000 for shareholders of less than two years and $15,000 for shareholders of less than three years, while leaving the $2,000 threshold in place for longer-term holders.The proposal also would impose new restrictions on proxy-advisory firms, whose recommendations are often decisive on shareholder votes. Corporations complain that their advice is sometimes poorly reasoned or inscrutable. Clayton would require the firms to show their recommendations to companies before issuing them.Fund managers warn the measure may have a chilling effect on proxy advisers, because a corporation could threaten a lawsuit if a draft recommendation isn’t revised.Anuzis said he was glad to hear that Clayton had cited letters generated by his organization. “I’m extremely proud that we were very effective,” he said. “If four of our letters were quoted, that means we did a great job.”(Adds comment from Jay Clayton in the eighth and ninth paragraphs.)\--With assistance from Ben Bain.To contact the reporters on this story: Zachary R. Mider in New York at email@example.com;Benjamin Elgin in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Robert Friedman at email@example.com, John VoskuhlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- You’d expect most companies accused of a longstanding fraudulent scheme to be thrilled if the government dropped those claims against them. Not so for Exxon Mobil Corp. -- at least not today.The energy giant unleashed a torrent of criticism against New York Attorney General Letitia James in court filings Monday, more than a week after the state sought to drop two out of four claims on the last day of a civil trial that has yet to be decided by the judge. Exxon says the government couldn’t prove the fraud claims and only made them “to score headlines and political points.”New York had used the now-abandoned claims to allege Exxon intentionally misled investors for years about the company’s use of “proxy costs” to account for the risks of future climate-change regulations on its business, and that investors had relied on those false statements when buying Exxon stock.New York Supreme Court Justice Barry Ostrager, who oversaw 11 days of testimony that ended Nov. 7, should block the attempt to drop the two claims and instead rule in favor of Exxon for the entire case to finally “set the record straight” after four years of disparaging comments from the state, the company said in the filing.The attorney general “directly and repeatedly impugned the corporate reputation of Exxon Mobil and the personal reputations of its employees,” whose names were dragged “through the mud,” the company said. The state “cannot now erase these past four years because its fraud theory was completely debunked at trial,” Exxon said.New York’s remaining allegation is that Exxon violated the state’s Martin Act, an anti-fraud securities law, by issuing materially misleading statements about proxy costs. Under that narrower claim, the state doesn’t need to prove intent or show that investors actually relied on the information.Read More: Exxon Climate Plan Wasn’t Fake, Tillerson Says In N.Y. TrialJames’s office declined to comment on Exxon’s filing or explain why the state wanted to drop two fraud allegations.In the state’s post-trial court filing on Monday, the attorney general argued that even without the fraud claims there is sufficient evidence that Exxon misled investors for years by issuing confusing and contradictory information about its carbon metrics. New York claims Exxon said publicly it was using a conservative proxy cost to appease investors while a lower figure was frequently used to make internal decisions on projects like the oil sands in Alberta, Canada.Exxon contends that New York’s diminished case is a far cry from what the state has been saying publicly since New York began investigating in 2015 until the end of the trial. New York had claimed that Exxon’s proxy costs were a “longstanding fraudulent scheme” that was “sanctioned at the highest levels of the company,” court records show.Former Exxon Chief Executive Officer Rex Tillerson faced years of particularly harsh allegations by the state, which accused him of knowingly spearheading the scheme and trying to cover it up. On the witness stand, he denied the claim and said the case was unfair to the company.In its Monday filing, New York said Exxon’s alleged misstatements were repeated and persistent. But the government didn’t attempt to explain its decision to abandon the two fraud claims.“Climate change regulatory risk is a critical risk in the oil and gas industry, and as a consequence, Exxon’s misleading statements about its management of that risk are clearly material to investors,” the AG said.(Updates with James’s office declining to comment)To contact the reporter on this story: Erik Larson in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Glovin at email@example.com, Steve StrothFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Saudi Aramco set a valuation target for its initial public offering well below Crown Prince Mohammed bin Salman’s goal of $2 trillion and pared back the size of the sale after the government decided to make the deal an almost exclusively Saudi affair.The initial public offering will now rely on local investors after most international money managers balked at even the reduced price target. The deal won’t be marketed in the U.S., Canada or Japan and on Monday bankers told investors roadshow events in London and other European cities, planned for this week, were canceled.Aramco will sell just 1.5% of its shares on the local stock exchange, about half the amount that had been considered, and seek a valuation of between $1.6 trillion and $1.71 trillion. As well as slimming down the deal, the Saudi authorities relaxed lending limits to ensure sufficient local demand to get the share sale done.While the new valuation means Aramco will overtake Apple Inc. as the world’s biggest public company by some distance, the plans are a long way from Prince Mohammed’s initial aims: a local and international listing to raise as much as $100 billion for the kingdom’s sovereign wealth fund.At the lower end of the price range, the offer would fall short of a record, coming in just below the $25 billion raised by Alibaba Group Holding Ltd. in 2014.Aramco Chief Executive Officer Amin Nasser kicked off the IPO’s final phase at a presentation for hundreds of local fund managers in Riyadh on Sunday.This is “a historic day for Saudi Aramco,” Nasser said. “We are excited about the transition to being a listed company.”With the offer price putting Aramco’s maximum valuation at about $1.7 trillion, there should be room for investors to make some money, said one local investor, who like all the people attending asked not to be identified.Aramco will need to lean heavily on local investors, large and small, to get the job done. The Saudi Arabian Monetary Authority will allow smaller retail investors to borrow twice their cash investment, double the normal leverage limits the regulator allows for IPOs, according to people familiar with matter.The kingdom’s richest families, some of whom had members detained in Riyadh’s Ritz-Carlton hotel during a so-called corruption crackdown in 2017, are expected to make significant contributions to the IPO.Cornerstone InvestorsThe final version of the prospectus didn’t identify any cornerstone investors, though the company is still in talks with Middle Eastern, Chinese and Russian funds.Foreign investors had always been skeptical of the $2 trillion target and recently suggested they would be interested at a valuation below $1.5 trillion. That would offer a return on their investment close to other leading oil and gas companies like Exxon Mobil Corp. and Royal Dutch Shell Plc.The new valuation implies Aramco, which has promised a dividend of at least $75 billion next year, will reward investors with a yield of between 4.4% and 4.7%. That compares with just under 5% for Exxon Mobil and 6.4% for Shell.“Institutional investors are unlikely to find this valuation range attractive,” analysts at Sanford C. Bernstein said in a research note Sunday, adding that the price range implies a premium to Western oil majors on most metrics, including price-to-earnings and free cash flow yield. “Cornerstone investors, sovereign wealth funds and local investors could still provide enough support to support the IPO given some of the strategic interests.”Saudi Arabia has been pulling out all the stops to ensure the IPO is a success to a skeptical audience. It cut the tax rate for Aramco three times, promised the world’s largest dividend and offered bonus shares for retail investors who keep hold of the stock.“Aramco’s price range takes into account some uncertainties that weren’t fully absorbed when the IPO was first floated,” such as governance, said Jaafar Altaie, managing director of Abu Dhabi-based consultant Manaar Group. “The lower range reflects uncertainties. It takes into account issues of supply that are very fluid, and demand that doesn’t look so good now.”Aramco has also faced the challenge of the strengthening global movement against climate change that’s targeted the world’s largest oil and gas companies. Many foreign investors are concerned the shift away from the internal combustion engine -- a technology that drove a century of steadily rising fossil fuel demand -- means consumption of oil will peak in the next two decades.Speaking in Riyadh on Sunday, Nasser acknowledged the prospect of peak demand, but argued that with the lowest production costs in the industry, Aramco would be able to win market share from less-efficient producers.The IPO is a pillar of Prince Mohammed’s much-hyped Vision 2030 plan to change the social and economic fabric of the kingdom and attract foreign investment. The prince, who rules Saudi Arabia day-to-day, is trying to recover his reformist credentials after his global reputation was damaged by the 2018 assassination of government critic Jamal Khashoggi in the kingdom’s Istanbul consulate.Proceeds from the IPO will be transferred to the Public Investment Fund, which has been making a number of bold investments, plowing $45 billion into SoftBank Corp.’s Vision Fund, taking a $3.5 billion stake in Uber Technologies Inc. and planning a $500 billion futuristic city.No matter what the final valuation, the share sale will create a public company of unmatched profitability. Aramco earned a net income of $111 billion in 2018 on revenue of $315 billion.\--With assistance from Nayla Razzouk, Abbas Al Lawati, Filipe Pacheco, Archana Narayanan, Dinesh Nair, Ramsey Al-Rikabi, Jack Farchy and Swetha Gopinath.To contact the reporters on this story: Matthew Martin in Dubai at firstname.lastname@example.org;Javier Blas in London at email@example.comTo contact the editors responsible for this story: Nayla Razzouk at firstname.lastname@example.org, ;Stefania Bianchi at email@example.com, Bruce StanleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Saudi Arabia has accepted the reality that the initial public offering of its state oil company, Saudi Arabian Oil Co., won’t generate a trillion-dollar valuation beginning with “2.” Moreover, there is tacit acknowledgement that investors outside the kingdom think Aramco is worth even less than the $1.6 trillion to $1.7 trillion now sought. The transaction is going to fall short of its original ambitions, both strategic and financial.The $100 billion gulf in the valuation range announced Sunday represents a 6% spread over the midpoint. This is tight for an IPO. Usually, when bankers set very narrow price ranges, it's because they think the shares will sell easily at a higher price and, therefore, perform strongly once listed. That assumption faces a severe test.For overseas investors, it appears $1.5 trillion was their limit. Saudi Arabia may feel the company is worth more, and not want to give it away at what it thinks is too cut-rate a price to outsiders. But that is the reality of any IPO: A company is sold a bit cheaply, in return for the owner monetizing a stake and obtaining a liquid currency.In any event, much of that conversation has now ended, with Aramco’s shares no longer marketed actively in North America. Hotels in Boston and New York should brace for a spate of cancellations. Sure, other international investors may yet be treated to the pitch, and qualifying overseas funds can still proactively buy in, or purchase the shares once listed. But the hurdles deterring them remain.While Aramco generates more profit than any other company in the world, it is also the biggest producer of hydrocarbons, a sector from which investors have been running away. It is also impossible to treat the investment decision to buy Aramco as somehow unaffected by the fact that it’s controlled by the repressive Saudi regime. And, as with most national oil companies, there is a tension between market demands and political imperatives, with the latter usually winning. It is hard to see Aramco as being able to make big moves that aren’t in step with the wishes of the kingdom.Meanwhile, Aramco offers a dividend yield below that of western oil majors like Exxon Mobil Corp. and Royal Dutch Shell Plc. True, those companies don’t have Aramco’s supercharged profitability. On the other hand, they don’t have to fund a country with their earnings.The shortage of international interest means local demand, and passive buying by index funds, will have to do the heavy lifting. A retail offering of 0.5% with a further 1% institutional float must meet a total offer size of roughly $25 billion. That is a lot of orders to find. The free-float of Saudi Arabia’s local exchange, the Tadawul, is only $260 billion — less than Exxon’s market cap.We are a long way from where this all started almost four years ago. The headline then was a possible $100 billion issue, comprising 5% of the company at a $2 trillion valuation endorsed by the world’s biggest fund managers. Now, selling about 1.5% for $25 billion at home, the risk is that the shares end up being highly illiquid once listed. They have been marketed almost like bonds, with guaranteed dividends and bonus shares for retail investors who hold on for six months. This may dampen selling pressure, but could lead fresh investors to sit tight until it’s clear where the price and volumes are settling.Having failed to live up to the hype, it may have been embarrassing to pull Aramco’s debut. But a mainly Saudi transaction doesn’t help establish Aramco’s independent commercial identity. And if simply harvesting cash for Saudi’s sovereign wealth fund was the primary objective, cutting the price and finding more buyers would probably raise a bigger sum.To contact the authors of this story: Chris Hughes at firstname.lastname@example.orgLiam Denning at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Does the November share price for Exxon Mobil Corporation (NYSE:XOM) reflect what it's really worth? Today, we will...
The federal government's EIA report revealed that domestic crude production climbed to yet another record high of 12.8 million barrels per day.
(Bloomberg) -- When New York’s climate change lawsuit against Exxon Mobil went on trial last month in a Manhattan courtroom, the energy giant’s lead lawyer took great pains to emphasize that the state’s allegations weren’t really about climate change.After all, Theodore Wells said, Exxon was accused of hatching a cynical, arguably pedestrian scheme to mislead investors. The alleged securities fraud may have been intended to mask the impact global warming will have on Exxon’s finances, but it wasn’t a grand reckoning of its responsibility for the man-made phenomenon.The reason, of course, was that New York couldn’t find enough evidence to back up its initial contention that Exxon hid its knowledge of global warming. In the end, however, that may not matter: Regardless of who wins, there are states, municipalities and environmental groups lined up around the block, suing or planning to sue Exxon and other energy companies for being the main perpetrators of a planetary catastrophe.And while a victory for New York could be a public relations boon for plaintiffs in those pending cases, a win for Exxon is unlikely to stop their litigation—most of which is based on very different legal arguments.Just as the New York trial was getting underway last month, Massachusetts Attorney General Maura Healey hit Exxon with a new consumer lawsuit. Her complaint cut to the chase, accusing the company of withholding dire climate warnings from its own scientists for decades and duping the state’s consumers with bogus “green” gasoline ads, among other things.“It’s well past time for Exxon to tell the truth and be held accountable for the misrepresentations it has made to every investor, at every gas station, on every television, and online,” Healey said in a statement. Exxon has repeatedly denied any wrongdoing.Additionally, more than a dozen “public nuisance” lawsuits seek to hold energy companies responsible for billions of taxpayer dollars spent on acclimating to a warming world, or picking up the pieces following unprecedented hurricanes, floods and wildfires.Rhode Island filed such a complaint last year, while a dozen city governments from California, Washington, Colorado, Maryland and New York have also sued. In just the last few weeks, the mayor of Honolulu said his city would soon file a nuisance suit of its own, comparing the litigation to lawsuits against Big Tobacco that led to a $246 billion industry settlement. The Hawaiian island of Maui, it’s own county, has also said it plans to sue. Since the cost of slowing global warming (and acclimating to damage already done) could reach tens of trillions of dollars, the stakes in these cases—if they survive—may be significantly higher than those faced by cigarette makers.Patrick Parenteau, an environmental law professor at Vermont Law School, said the growing number of nuisance cases are supported by claims of a well-funded “campaign of deception” and Big Oil’s history of opposing legislation intended to address the problem.So far, nuisance cases have met with mixed success, as the companies fight to move them from state to federal courts, where they often get more favorable treatment. Last month, the U.S. Supreme Court let officials from Maryland, Rhode Island and Colorado press ahead with three state lawsuits that accuse more than a dozen oil and gas companies, including Exxon, of contributing to climate change.Local governments have won rulings in California, where a federal judge moved a climate change lawsuit by the City of Imperial Beach and San Mateo and Marin counties back to state court. (The companies have appealed.)Plaintiffs have lost nuisance cases as well. In a federal lawsuit filed in early 2018, New York City accused Exxon, Chevron, BP, Royal Dutch Shell and ConocoPhillips of promoting fossil fuel sales despite knowing the damage it poses to the planet. A U.S. district judge threw out the lawsuit, which was based on a state law, saying federal law governs carbon dioxide emissions. The city appealed, with arguments scheduled for Nov. 22.A spokesman for Shell said the company doesn’t “believe the courtroom is the right venue to address climate change.” None of the other defendant companies responded to emails seeking comment.Lawsuits filed by the cities of Oakland and San Francisco met the same fate when they were dismissed. Appeals are pending in those cases as well.“Unless governments take adequate action against climate change, which is highly unlikely, lawsuits will continue to pile up,” said Michael B. Gerrard, director at the Sabin Center for Climate Change Law at Columbia Law School. But states and cities seeking redress in the courts say it is the only avenue open to them. The federal government under President Donald Trump has spent the past three years trying to undo climate regulations put in place by President Barack Obama, including taking the U.S. out of the landmark Paris Agreement intended to reduce fossil fuel emissions globally.Hana Vizcarra, a staff attorney at Harvard Law School Environmental and Energy Law Program, said nuisance lawsuits are difficult to make because plaintiffs must “draw the line” from a company’s actions to the damage done. The continued fight over state jurisdiction will be crucial, she said.“If they survive the fights over venue, there will be a continued appetite to bring these cases,” Vizcarra said.Read More: How Exxon’s Climate Change Trial Became a Battle Over NumbersAs for the New York case, it’s now up to Supreme Court Justice Barry Ostrager, who presided over the non-jury trial. He is scheduled to hand down a verdict in the coming weeks. Whoever loses is almost certain to appeal.The trial turned on the two ways Exxon measured how much climate change—and specifically climate change-related laws—would affect its bottom line. According to the company, its so-called “proxy cost” was a public number representing how much fossil fuel prices would fall as those regulations diminished fossil fuel demand. The other number was an internal “greenhouse gas cost” associated with new extraction projects, such as fracking or oil sands, it said. New York said the proxy cost was at one point $80 a ton while the greenhouse gas cost was $40.New York said the two gauges were like keeping two sets of books—clear evidence that Exxon was lying to the investing public. The proxy cost made the company look like it was being fully transparent about its financial future, New York argued, but since Exxon used the lower cost when deciding whether to dig up more oil, it was a classic case of securities fraud, since investors were buying stock based in part on a lie.Exxon responded that New York’s case made no sense, since the greenhouse gas cost was narrowly focused, used to measure the viability of specific projects, and—most importantly—more optimistic. What, Exxon argued, would it gain by fooling itself? Read More: Why New York Doesn’t Need a Smoking Gun to Win the Exxon Climate TrialDuring the course of the trial, former Exxon CEO Rex Tillerson took the stand in what may have been the most dramatic point of the three week-proceeding. New York often elicited testimony intended to show that Exxon sought to defraud investors, a strategy that seemed to annoy Ostrager.The lawsuit was filed in part under New York’s powerful Martin Act, which doesn’t require a showing of intent. It only requires that New York show Exxon shareholders could have been misled by the company’s actions. As the trial ended, the state dropped counts based on common law fraud alleging that Exxon’s statements about its accounting were intended to defraud investors, and that investors relied on them when buying stock. The remaining two counts, brought under the Martin Act, require the judge find only that Exxon’s statements were sufficient to mislead to investors, regardless of whether Exxon meant to do so.Robert McTamaney, a New York-based corporate attorney, calls the Martin Act “an atrocity,” given how low the bar for victory can be. As for the nuisance lawsuits, he concurred that they may gain traction if they are allowed to proceed in state courts. Nevertheless, he said he believes the courts are the wrong place to settle the question of climate change.“The correct outcome, in my judgment, is to leave this area to the Congress and legislatures,” McTamaney said. “And in any event, it is a global problem which demands a global solution.”Others are intent on using the courts to make those responsible for the global crisis pay to fix it. New York’s lawsuit against Exxon, said Daniel Rohlf, a lawyer at Earthrise Law Center, is the first battle in a larger war. A professor at Lewis and Clark Law School in Portland, Oregon, Rohlf said a ruling against Exxon would have a big impact on pending litigation elsewhere.“It would send a loud and clear signal to both corporations and the public that carbon emissions aren’t free,” he said. “The time has come to account for those costs in the way we do business, and in the way we live.To contact the author of this story: Erik Larson in New York at email@example.comTo contact the editor responsible for this story: David Rovella at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Elizabeth Warren unveiled a new policy proposal Tuesday to prosecute large corporations for perjury if they mislead the public and government regulators.The Democratic presidential candidate’s proposal takes aim at companies such as Exxon Mobil Corp., which she said had spent millions of dollars to spread misinformation about the effects of fossil fuels on climate change.If Warren’s idea becomes law, companies would be subject to as much as $250,000 in fines, and executives could face jail time if regulators determined they knowingly submitted false or misleading information to regulatory agencies. Her latest policy roll-out is part of a larger anti-corruption plan that she has made a centerpiece of her campaign.“If bad actors like Exxon break the rules and deliberately lie to government agencies, my plan will treat them the same way the law treats someone who lies in court – by subjecting them to potential prosecution for perjury,” Warren wrote in a Medium post on Tuesday.Exxon’s scientists work “in an open and transparent way,” the oil producer said in a statement. The Irving, Texas-based company “has supported climate science in partnership with government and academic institutions for nearly 40 years,” it said, citing dozens of peer-reviewed publications and work with Stanford University, the Massachusetts Institute of Technology, the U.S. government and the United Nations.A New York judge is currently presiding over a case in which the state’s attorney general’s office is accusing Exxon of making misleading statements about the financial effects of climate change policies. Last week, the state dropped two claims that formed part of the original case.Warren would also ban federal agencies and courts from considering research that has been financed by a specific industry and has not been peer-reviewed. Corporations would be required to disclose how their research was funded and make clear any financial relationships between the researchers and their corporate backers before being considered by federal agencies. Any conflicts of interest would exclude that research from the rulemaking process, she said.She also assailed tobacco companies for backing what she called misleading information on the health risks of smoking.Warren’s proposal comes a few weeks after she stepped up her criticism of major U.S. corporations, including Facebook Inc., Wells Fargo & Co., BP Plc and Walmart Inc. and singled out senior-level government officials who accepted jobs with them after working for the federal government.The Massachusetts senator has vowed to increase oversight of lobbying and to impose hiring restrictions for people who have worked in top government posts.(Updates with Exxon comment in fifth paragraph.)\--With assistance from Kevin Crowley.To contact the reporter on this story: Misyrlena Egkolfopoulou in Washington at email@example.comTo contact the editors responsible for this story: Wendy Benjaminson at firstname.lastname@example.org, Carlos Caminada, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.