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New York Mayor Challenges Oil Companies

The city’s plan would drop $5 billion in fossil fuel holdings from city pension funds while suing major oil companies

Posted on Jan 16 2018 by Scott Gibson

State and regional leaders trying to fill a leadership void in combating climate change now include New York City Mayor Bill de Blasio, who last week announced that the city would revamp city pension funds to eliminate holdings in fossil fuel companies and file a lawsuit against five big oil companies.

The New York Times reports that de Blasio, a Democrat, said the oil companies should be held accountable for damages related to climate change, such as the widespread destruction from Hurricane Sandy in 2012. He said BP, Chevron, Conoco, Philllips, Exxon Mobil, and Royal Dutch Shell all have been aware for years that burning fossil fuels was responsible for global climate change but hid that information from the public. As a result, he said, New York has spent billions of dollars and will be forced to spend billions more in the future.

"This city is standing up and saying, ‘We’re going to take our own actions to protect our own people,' " he said. "We're not waiting."

The lawsuit, filed in a federal district court in New York, "seeks to shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat," The Washington Post said. The lawsuit alleges that the five companies collectively are responsible for 11% of all greenhouse gas emissions through the fuels they have sold over time.

The Post points out that several California cities and counties also have gone to court with similar complaints, but their legal efforts to hold oil companies accountable for the damaging effects of climate change have failed.

The New York Times noted in a recent editorial, “Whatever the obstacles, the suit and the discovery process will be useful for many reasons, not least in spotlighting evidence that companies like Exxon had long known from their own scientists about the damage their products would cause the environment while at the same time underwriting advocacy groups whose main purpose was to confuse the public by denying the very existence of climate change.”

Exxon Mobil said in its blog Energy Factor that lawsuits like this one weren't helpful in reducing greenhouse gas emissions, which it called a "global issue" that required "global participation and actions."

"We believe the risk of climate change is real and we are committed to being part of the solution," the blog said. "That is why we have invested $8 billion since 2000 on energy efficiency and emissions reduction."

Shell said in a statement to The Post the courts are the wrong place to address climate change.

Moves to change New York pension funds

The other volley from de Blasio was his promise to divest city pension funds of some $5 billion in holdings of companies connected to the fossil fuel industry.

But as city comptroller Scott Stringer explained, the move is not as simple as a press conference announcement. Stringer, who sat next to de Blasio, said that the city was setting a formal goal of dumping the investments but that the process could take five years to complete. He said the divestitures would have to be considered in the context of "sound fiscal stewardship."

There are five city pension funds, and trustees would have to approve any decisions on divesting certain holdings. The boards were asked in a resolution to "initiate a process" to come up with a plan for ridding the funds of the investments while balancing the need for fiduciary responsibility. Previously, the pension funds dumped investments in the coal industry and private prison companies, but the scope of those changes was much smaller, accounting for only $60 million of the funds' $189 billion total.

Reaction was predictably mixed. Bill McKibben, co-founder of the advocacy group 350.org, told The Post that New York's latest effort is one of the most important moments in the fight over climate change in the lat 30 years. Lobbyists for the gas and oil industry charged de Blasio had "turned his back" on policy officers and other public employees who are counting on their pensions in retirement.

New York governor also active

Earlier, New York Governor Andrew Cuomo had some energy-related announcements of his own, namely a call for 800 megawatts of offshore wind contracts by 2019, tighter standards for small fossil fuel generators, and 1,500 megawatts of energy storage by 2025, the website Energy Wire reported.

Cuomo said that he wanted to work with officials in California and Washington state to rebuild a climate science advisory committee that President Donald Trump disbanded. New York also said it will work with other states on energy efficiency standards for home appliances.

In his 2017 State of the State address, the governor proposed the development of 2.4 gigawatts of offshore wind by 2030. That would be enough to supply electricity to about 1.25 million homes. The offshore wind projects are part of the the state's goal of meeting 50% of its electricity needs with renewable sources by 2030.

Maryland, Massachusetts, and New Jersey also are pressing ahead with offshore wind development, each wishing to become the hub for the U.S. industry, Energy Wire said.


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Image Credits:

  1. Kevin Case via Flickr

1.
Jan 16, 2018 9:08 AM ET

Another great example of why The State can be so dangerous
by John Clark

The lawsuit is so absurd that it borders on lunacy. Why raise taxes on your constituents when you can shake down multi-nationals instead?


2.
Jan 16, 2018 9:44 AM ET

Edited Jan 16, 2018 11:55 AM ET.

Response to John Clark
by Martin Holladay

John,
The lawsuit is not lunacy, although my comments are unlikely to convince you to alter your current opinion.

Exxon Mobil hired in-house scientists to report on the connection between burning fossil fuels and global climate change. The in-house scientists wrote confidential reports, delivered to Exxon Mobil executives, explaining the the connection was convincing. Exxon Mobil spent several decades funding groups that deliberately spread falsehoods; these groups and Exxon Mobil (in expensive newspaper and magazine ads) falsely claimed that there was little convincing scientific evidence to support the connection between CO2 emissions and climate change.

The purpose of Exxon Mobil's propaganda campaign was to pump up their profits. A legal case can be made that this amounts to fraud.

While Exxon Mobil profited from this scheme, there were many victims. All of us face higher taxes as we confront rising sea levels, more intense storms, and deadly heat waves. So I can certainly understand that the victims, looking at the fat profits enjoyed by Exxon Mobil during the years when the company spread falsehoods about climate change, feel resentment. And I believe it's possible that lawyers can convince a jury that Exxon Mobil's actions were reprehensible, and that the company is responsible for some portion of the costs related to climate change.


3.
Jan 16, 2018 10:09 AM ET

Why stop with the oil industry?
by DAN VANDERMOLEN

Why not include the entertainment industry as well? Isn't there a connection to drugs and guns not to mention how the directors treat women. When it gets right down to it isn't it capitalism and a thriving consumer market the real source of climate change. It is time to divest in all corporations and allow the elites to do whats best for us.


4.
Jan 16, 2018 12:21 PM ET

@Martin
by John Clark

Seriously? NYC and the surrounding metro area practically owe the oil industry and other large multinationals for the wealth it created for its citizens and the consequent tax revenues sent to the public coffers. The oil industry along with all the downstream industries have bettered the lives of billions of people.

Why not sue Apple, Entertainment industry, Berkshire Hathaway, DOW Chemical, Ford/GM/Chrysler Fiat, IBM, Wall Street, the Department of Defense? All of them have "profited" off the "fraud" perpetrated by "big oil".

If the mayor of NYC was so concerned about AGW then perhaps he should've forgone having children.

AGW is a fools errand when we don't have the ability to meet future demand for food.


5.
Jan 16, 2018 7:23 PM ET

Edited Jan 16, 2018 7:27 PM ET.

Dark money
by Bennett Sandler

Too bad, GBA normally attracts decent and well-intentioned discourse. We don't get a lot of trolls in these parts.

The argument that we owe the conveniences of modern life to fossil fuel is undeniably true, and also completely irrelevant to the question of whether fossil fuel companies have engaged in a massive campaign of fraud and corruption in order to keep us addicted to a poisonous product.

Similarly, most normal people will recognize that there is no contradiction between the fact that the mayor of NYC has children, and the fact that he is bravely trying to govern with the best interests of the next generation in mind.

If you've read Jane Mayer's _Dark Money_ this announcement actually looks pretty significant. What de Blasio et al are going up against is without question the most powerful, greedy, ruthless, secretive, anti-democratic political force in US history. The Kochs and their dozens of media holdings, front groups, and think tanks spent as much as the two major political parties in the last election cycle--almost a billion dollars. They spent that money to protect enormous fossil fuel profits extracted at the expense of the public good and the future of life on earth.

It's surprising to me when people defend their right to be robbed, lied to, and disenfranchised.


6.
Jan 17, 2018 2:48 AM ET

@Bennett
by Eric Habegger

I agree with everything you said. However, I think you'll find that if you would have said that John Clark is a troll here, instead of just suggesting it, you would be banned from commenting. At least temporarily. That's what happened to me when Mr. Clark blamed the citizens of Flint Michigan for the lead being leached into their water. I said that it wasn't true and that he was racist for even saying it. It's an old story so I won't rehash it except to say that Mr. Clark continually denies facts and reality when it suits him. That's what he does. But Bennett, you can't say that because that will upset Mr. Holiday. I got banned after saying my piece and now Mr. Clark is more bold than ever because he knows that "he" won't be the one that suffers for denying reality. Blame Martin for his encouraging trolls through GBA's ridiculous milquetoast policy that won't take a stand when it really counts.


7.
Jan 17, 2018 6:28 AM ET

Response to Eric Habegger
by Martin Holladay

Eric,
Thanks for your comments.

Here is GBA's policy: We are happy to publish comments that focus on the issues under discussion -- whether green building issues, building science issues, or political issues.

No one is interested in reading one reader's personal attack on another reader. We will remove comments, and warn readers, when any reader posts a comment that consists of a personal attack on another reader. In other words, no name-calling.

Let's focus on the issues, not the people.


8.
Jan 17, 2018 10:18 AM ET

Focus on the issues
by DAN VANDERMOLEN

I few years back when I suggested that GBA should focus more on building and less on the political issues I was called a Nazi on this site. If a large majority of the stories posted are of a political slant then some people may have a different perspective then you should expect for people to express their ideas.

I stand by my comments that why stop with divesting in the oil companies? Why not cars, airlines and travel industries as well?

A suggestion for a different type of article GBA might include is an article on the new pickup trucks coming out like the Dodge that uses a semi hybrid technology to reduce fuel or Chevy's new truck that reduces the weight to improve millage. Even Tesla announced a design stage for a new pick up.

Then again probably not that many readers of GBA that drive a truck and actually build stuff these days. Maybe design and engineer homes but actual get dirty and work with their hands probably not so much.


9.
Jan 17, 2018 10:58 AM ET

@Bennett
by John Clark

Crony capitalism has been standard fare in the US for a long time. When companies/industries become large they look to the State for protection from competition and when paid the State accommodates. I am by no means defending the oil industry. The have an abysmal record with regards to pollution and I've seen it first hand during a short stint working in the field for ERM. The point I was making is that the decision by the Mayor of NYC is a political one and by definition hypocritical. The "oil industry" is seen by his peers/constituents as the boogieman so it's politically convenient for the mayor to go after them when there are other industries that are at least as complicit. When industries aren't paying homage to the State they open themselves to being punished (Apple, Google, Facebook are finding that out). That's a problem and it's what's going on in NYC.

Finally I take exception to the suggestion that I'm a climate change denier. I have a BS in Environmental Science (SPEA-IU) and after working in the field for a short time I came to the realization that when taken in a global context AGW is sexy, profitable, controllable, but largely irrelevant problem. People profit from it and "feel good" about fighting/regulating it and governments throw plenty of taxpayer money at it. It's the easy issue to fixate on but AGW is just a symptom of the larger but less pleasant issue of population growth.

Off soapbox.....


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