New York State takes aim at Exxon's assets in the oil sands
After several years of investigation, New York's attorney general officially filed a lawsuit against ExxonMobil for underestimating the cost of carbon in the evaluation of its assets.
The lawsuit is being filed on behalf of all ExxonMobil shareholders, which include public and private pension funds, life insurance companies and institutional buyers.
In recent years, several US municipalities have unsuccessfully tried to sue Exxon and other oil majors for weather-related events thought to be caused by climate change. Government lawyers have now shifted their focus to much more stringent shareholder-rights regulations, that require publicly-traded companies to disclose all risks to their balance sheets.
State attorneys allege Exxon promised to use a carbon price of $80/t by 2040, but insists the company's figures currently reflect something closer to $5/t. The lawsuit specifically points to Exxon's large oil sands assets in Alberta - Kearl and Cold Lake. The state alleges the company failed to account for over US$25 billion in GHG-related expenses over the life of the two projects, and grossly overestimates recoverable reserves.
The US Securities and Exchange Commission (SEC) launched a similar investigation in 2016, but dropped the case in August. Exxon calls this latest court challenge "baseless" and will be seeking to have the lawsuit dismissed.
New York State filed its paperwork with the New York Supreme Court on Wednesday, asking the company to "tell investors the truth." If the lawsuit proves successful, Exxon would be forced to re-evaluate its assets and accounting practices.