New York Attorney General Eric Schneiderman’s probe into Exxon Mobile Corp. includes scrutiny of why it didn’t write down the value of oil and gas reserves during a global collapse in prices, according to a person familiar with the matter.
The avenue of inquiry is related to larger questions of whether Exxon knew decades ago about the dangers of climate change and failed to alert investors to the financial risks it could pose to the company, said the person, who asked not be named because the details aren’t public. The investigation began last year and states including Massachusetts have joined.
A call to Irving, Texas-based Exxon wasn’t immediately return.
Asset writedowns have taken a toll on companies’ earnings after the plummet in crude prices — and oil majors were no exception. In January, Chevron Corp. reported $1.1 billion in charges, including writedowns on the value of its oil and natural gas fields. Independent driller Chesapeake Energy Corp. saw an $853 million write-down in the value of its gas fields.
The states, led by Schneiderman, want to know if Exxon misled investors by hiding how climate change may affect the company’s finances, burying internal reports that warned global warming would damage the U.S. economy and the company’s assets. The probe is also looking at whether Exxon ignored how global and domestic regulations, such as a carbon tax, might prevent it from tapping valuable reserves that are listed on its books, and whether Exxon has accounted for changes to the industry that will be required under the Paris accord on climate change.
Republicans including Texas’s Lamar Smith, chairman of the House of Representatives Science Committee, have said that Schneiderman’s investigation poses a risk to the free speech of scientists who disagree that humans are causing the climate to change — a findings backed by the vast majority of the world’s climatologists.
Smith’s committee has subpoenaed Schneiderman and other attorneys general demanding information about the investigations, which the states view as a political attempt to derail them. Schneiderman refused the demand.
The Wall Street Journal earlier on Friday reported on the area of inquiry.