ExxonMobil’s stock gains, reflecting little reaction to Wall Street Journal report on climate-change denial

ExxonMobil’s stock gains, reflecting little reaction to Wall Street Journal report on climate-change denial

A Wall Street Journal investigation has uncovered internal documents that contradict Exxon’s public stance on the effect of fossil fuels on global warming

The price of shares in oil-and-gas giant ExxonMobil advanced Thursday, seemingly unaffected by a Wall Street Journal report reviving what’s long been suspected to be a concerted effort among Exxon’s executives and board members to downplay evidence that climate change is accelerated by burning fossil fuels.

The Journal, in a feature article out Thursday, reported on internal documents from Exxon and interviews with former executives that had never been made public.

ExxonMobil’s stock XOM, -1.54% bounced back Thursday from a day earlier, when it lagged the broader market, and was recently trading up 1.6%, adding to a roughly 25% gain for shares over the past year. In the same one-year timespan, the Dow Jones Industrial Average DJIA has advanced by roughly half, up 13%.

Crude-oil prices CL00, 0.56% are up more than 5% over the past year and in Thursday trading crossed back above $90 a barrel for the first time in 2023, gaining ground amid news of tighter supplies. The market is also absorbing a report this week from the International Energy Agency saying global demand for oil will peak as soon as 2030, in part as greener alternative sources like solar, wind and nuclear take up some of the slack. The Organization of the Petroleum Exporting Countries has countered that assessment, saying the IEA’s target date is “not fact-based.”

The Wall Street Journal story centers on the contrast between Exxon’s public-facing softening of its previous denial of climate change and a reinforced tack within the company’s leadership ranks to downplay or selectively release scientific findings that pin dangerous global warming on the emissions created by the combustion of coal, oil and natural gas NG00, -0.15%.

According to the Journal, executives strategized over how to minimize concerns about warming temperatures and sought to muddle internal scientific findings that might hurt the company’s oil and gas business, according to the documents the newspaper reviewed.

Exxon’s public acknowledgement in 2006 of the risks posed by climate change was an early move by Rex Tillerson, a longtime Exxon employee who became CEO that year and would later serve as U.S. secretary of state in the Trump administration.

The documents reviewed by the Journal contradict what, in 2006, was considered in public spheres to be a relatively forward-looking view from Tillerson on climate-change findings and a marked shift at the oil giant. The article cites internal documents, which had not been previously reported on, that instead show that Tillerson, as well as some of Exxon’s board members and other top executives, sought to cast doubt on the severity of the effects of climate change and to generate criticism of mainstream scientific findings.

Those discussions took place even after the company said it would stop funding think tanks and other organizations that promoted climate-change denial, the report said.

Current ExxonMobil CEO Darren Woods, who has been at the helm since 2017, did provide comment to the Journal.

“I know how this information looks — when taken out of context, it seems bad,” he said. “But having worked with some of these colleagues earlier in my career, I have the benefit of knowing they are people of good intent. None of these old emails and notes matter though. All that does is that we’re building an entire business dedicated to reducing emissions — both our own and others — and spending billions of dollars on solutions that have a real, sustainable impact.”

Exxon is a defendant in dozens of U.S. lawsuits, including some brought by investor groups and communities, that accuse it and other oil-and-gas companies of deception over climate change and that seek billions of dollars in damages. Prosecutors and attorneys involved in some of the cases want access to some of the documents reviewed by the Journal, which were part of a previous investigation by New York’s attorney general but were never made public.

One of the lawsuits was filed by Hawaii’s Maui County in 2020. This summer, fast-spreading wildfires killed at least 100 people on Maui, and some residents are still unaccounted for. The Maui suit alleges the island faces increased climate-related risks, including more dangerous wildfires, due to the actions of fossil-fuel companies.

While the August fire is still under investigation, early analysis points at drought conditions linked to climate change, along with abandoned pineapple farms that produced vegetative fuel for the flames and freak high winds from a tropical storm hundreds of miles away.

Some of the U.S. lawsuits may go to trial as soon as next year.

In 2021, in a first-of-its-kind action, a Dutch court ordered Royal Dutch Shell SHELL, -0.02% to cut its emissions faster and more deeply than planned. The precedent-setting ruling is seen as having potential consequences for the global fossil-fuel industry.

A study published in the journal Science at the start of 2023 was the first to systematically measure how climate-change-impact models generated by Exxon’s internal scientists matched up against other scientific studies.

Researchers at Harvard University and the University of Potsdam in Germany found that Exxon’s estimates from 1977 to 2003 proved to be just as precise as those from independent academics and government scientists. Between 63% and 83% of Exxon’s projections, varying by how they’re measured, accurately predicted how the world would warm in the coming decades, the study showed.

This research, dismissed in part by the oil concern’s representatives as simply fueling claims by the campaign known as #ExxonKnew, may also play a role in legal action against the company for allegedly misleading investors and the public about the dangers of global warming for decades.

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