Issue Briefs

Is Exxon’s Obfuscation About Climate Change A Crime?

Is Exxon’s Obfuscation About Climate Change A Crime?

Paolo von Schirach

September 29, 2016


Here is the thing. We know now that ExxonMobil’s internal documents reveal that experts working for the company years ago admitted that burning fossil fuels would cause unwanted higher temperatures, and therefore climate change.


Exxon’s top management was well aware of these findings. But quite obviously it chose to ignore them. In fact, it did much worse. The oil and gas conglomerate for years funded research organizations that either minimized the impact of fossil fuel emissions on temperature changes, or denied it altogether.

There is no question in my mind that Exxon knew exactly what it was doing. It was engaged in a big lie in order to protect its enormous economic interests. It fought against those who would want to drastically curb the use of fossil fuels, and therefore harm or kill its business, on the basis that burning fossil fuels increases CO2 levels in the atmosphere. There is no doubt that Exxon’s behavior is unethical and despicable.

Is this a crime? 

But is it also criminal? Well, many U.S. public officials think so. Led by New York State Attorney General Eric Schneiderman, they maintain that Exxon’s actions are in fact fraud. By denying evidence that it knew to be true about the harmful impact of its products, Exxon Mobil willfully cheated its investors.

They were told that the company was engaged in safe activities, while it turns out that they are unsafe, given the global warming impact derived from using the fossil fuels that Exxon produces. According to Schneiderman this behavior is very similar or equal to the pattern of conduct exhibited by the tobacco companies when for years they denied that nicotine was addictive and that smoking cigarettes greatly enhances health risks.

Just like the tobacco companies 

The tobacco companies quite clearly knew the truth about the consequences of smoking. But they engaged in a massive disinformation campaign because they wanted to protect their market. If, by doing this, they allowed millions of Americans to die prematurely because of lung cancer and other cigarettes caused diseases, so be it. They just did not care. In order to keep their immense profits, they kept obfuscating for as long as they could. Later on, this was considered criminal behavior. And so the tobacco companies were forced to pay enormous fines.

Well, Exxon’s critics now say that the oil company did pretty much the same. The company withheld from its investors and from the American public the content of internal studies that acknowledged that global warming is the result of humans using fossil fuels on a massive scale, while publicly claiming that the data and the evidence supporting this thesis is ambiguous and inconclusive. Very simply, they knew the truth; but in public they declared the exact opposite.

It is not fraud 

Anyway, is all this criminal? I do not think so. Most investors knew exactly what they were buying when they purchased ExxonMobil stocks. Even though Exxon was engaged in a robust disinformation campaign, people –including investors– had access to plenty of publicly available studies that clearly stated the opposite.

Which is to say that people who bought Exxon stock knew the facts. More broadly, it is clear that Americans keep using fossil fuels and their byproducts (gasoline) out of their own free will, notwithstanding the efforts of scores of NGOs and the Greens who on a daily basis warn everybody that this behavior will lead to planetary catastrophe.

In fact, even those who believe the green arguments against fossil fuels continue to use them simply because as of today there is no plausible, truly cost-effective alternative. Nobody forces the average American to drive a car powered by an internal combustion engine fueled by gasoline produced by Exxon or by any other energy company. But millions drive these vehicles simply because for most people there is no practical alternative.

Immoral but not criminal

So, here is the thing. Exxon’s behavior is clearly immoral and unethical. It had information that would have harmed its business and it chose not to disclose it, while pretending in its public statements that there was no conclusive evidence that burning oil products harms the environment. This is bad behavior.

But this behavior does not amount to fraud on a massive scale. Indeed, if people wanted “the facts” on the relationship between the use of fossil fuels and global warming, they were out there. There were and there are plenty of widely available sources that state the dangers.

It is completely disingenuous to affirm that the poor, innocent investors were duped into buying stocks of a company that makes harmful products only because ExxonMobil lied to them.


Paolo von Schirach is President of the Global Policy Institute and an Adjunct Professor at BAU International University. A different version of this article first appeared in the Schirach Report


The views and opinions expressed in this issue brief are those of the authors and do not necessarily reflect the official policy of GPI.