The Journal. - Inside Exxon’s Strategy to Downplay Climate Change

Episode Date: September 18, 2023

In 2006, after years of denial, ExxonMobil publicly acknowledged climate change for the first time. But internal documents show that behind the scenes, Exxon officials pushed to diminish concerns about climate change. WSJ’s Christopher M. Matthews breaks down the new findings. Further Reading: - Inside Exxon’s Strategy to Downplay Climate Change  - Exxon Predicts World Will Miss Climate-Change Targets  Further Listening: - An Activist Investor and the Showdown Over Exxon’s Future  Learn more about your ad choices. Visit megaphone.fm/adchoices

My name is Chris Matthews. I am the U.S. Energy Editor. Our colleague Chris spends a lot of time covering the oil and gas giant ExxonMobil. They are the biggest Western oil company, and they are really the face of the industry in many ways and have been for some time. And I think when a lot of people think of oil and gas, they think of Exxon. Over the past few months, Chris and his team have been working on a major investigation into Exxon. They reviewed internal Exxon documents that have never been made public before. You know, it was one of those things where I think, in all honesty, I probably didn't understand what we were looking at initially. And the more time I spent with it, the more significant I realized it was.

And what does your recent reporting uncover about Exxon? I think what we realized was we were getting a really unvarnished look into the senior-most levels of the company and what they really thought about climate change and what they were really doing to put their finger on the scale of the conversation about climate change. And it was clear to us that there was discrepancies between what the company was saying publicly and what it was saying behind closed doors. The new reporting outlines Exxon's efforts to diminish people's concerns over climate change

and challenge the scientific consensus on rising global temperatures. And those efforts went on for longer than we previously knew. The documents cover several decades. From the 80s into around 2016, it summarizes emails, board meetings, edits of speeches, and goes to the very top of the company. and goes to the very top of the company. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, September 18th. Coming up on the show, a new look at Exxon's years-long strategy to downplay climate change. talk. Suddenly, you spot something different. The Bold Seagram 13, a 13% cosmopolitan cocktail.

You grab a can and take a sip. Suddenly, you're on a fresh adventure, becoming the hero of your own night. Unapologetically full-flavored cocktails with a 13% punch. Seagram 13, dare to make your own luck. Must be legal drinking age. Please enjoy responsibly. Available at the LCBO. The idea that the climate is warming because of human activity, especially the burning of fossil fuels, entered the public conversation in the late 1980s, when a top NASA scientist, James Hansen, gave a groundbreaking testimony to the Senate. In 1988, during what was then the hottest summer on record, he went up to Congress to the Hill and testified that the globe was warming rapidly and that it presented existential issues for our species. And the next day, it was on the front page of every newspaper in the country. From the greenhouse effect to the floods devastating Bangladesh to the forest fires sweeping the American West,

the culprit may be man himself. Quickly, climate change became a major topic of conversation in Washington. The greenhouse effect is here. It's alive and well, and it's with us today. We have had the hottest five years since we started recording temperatures in the 80s, and 1988 promises to be the hottest of all. It is here now. It was really seen as, I think, among the first alarm bells ever really issued on climate change. And up until that point, how did the public view climate change?

I don't really think the public was thinking about it. It had been identified as an issue, but I don't think it had ever been put in such stark relief that it was a true threat. Exxon was paying attention. According to the documents Chris reviewed, there was a push inside the company to downplay climate change in the months after Hansen's testimony. One example is this memo written that same year by Exxon's then head of corporate research. He said, if a worldwide consensus emerges that action is needed to mitigate against greenhouse gas effects, substantial negative impacts on Exxon could occur. Any additional R&D efforts within corporate research on greenhouse should have two primary purposes.

One, protect the value of our resources, oil, gas, and coal. Two, preserve Exxon's business options. So basically, protect the bottom line, no matter what they say about climate change. That's right. It's hard to read that document any other way. That former Exxon executive told the Wall Street Journal that he acknowledged the climate was changing, but that he questioned to what extent human activity was causing it. When the Journal asked Exxon's current CEO about these documents, he said, quote, I know how this information looks. When taken out of context,

it seems bad. But he added that the documents are old and don't matter, because Exxon is dedicated to reducing emissions. Through the 1990s and into the 2000s, Exxon didn't publicly recognize the growing science connecting fossil fuels and warming temperatures. Their stance was that climate science was uncertain. The world may be warming, but it wasn't clear that fossil fuel emissions were contributing to that. And therefore, taking drastic action to address it wasn't warranted, especially because it would increase energy costs for everyone around the globe. And in the meantime, over that same period, how is public opinion on fossil fuels changing?

It changed quite dramatically. I mean, I think it's fair to say that during that period, the public shifted on climate change and began recognizing it as a real issue. The United States has got to be committed to realistic and binding limits on our emissions of greenhouse gases. You know, during the Clinton administration, you had the Kyoto Protocol, which is really one of the first global efforts where countries in a coordinated way committed to fighting climate change.

The agreement is environmentally strong and economically sound. It reflects a commitment by our generation to act in the interest of future generations. Exxon didn't support the Kyoto Protocol. And in the end, the U.S., under President George W. Bush, didn't ratify the agreement. Kyoto is in many ways unrealistic. Many countries cannot meet their Kyoto targets.

The targets themselves were arbitrary and not based upon science. For America, complying with those mandates would have a negative economic impact. Exxon fought Kyoto tooth and nail, both behind the scenes and publicly, and it became a big problem for Exxon. Their opposition to Kyoto,

their constant questioning of climate science really began to damage their reputation and was presenting a big PR problem for them. The pressure on Exxon to address climate change came to a head in 2006. At the time, the company was being criticized for funding groups that challenged the science behind global warming. Some of the loudest criticism came from the Royal Society. It's a research academy based in the UK. It accused Exxon of misinforming the public.

Academy based in the UK. It accused Exxon of misinforming the public. And in response, Exxon finally addressed the connection between fossil fuels and climate change. Exxon responded in a letter that as their first public acknowledgement of climate change as a real issue. And they said that they, quote, recognize the accumulation of greenhouse gases in the Earth's atmosphere poses risk that may prove significant for society and ecosystems. And how important was that acknowledgement? I think it was hugely important. It was the first time they acknowledged that human activities, and in particular the burning of fossil fuels, were contributing to climate change. It has to be said that there were still a fair amount of skeptics. It's Exxon after all. They're still an oil and gas company. I don't think everybody just thought, oh, they're going to get right on climate change now.

But it was a massive public policy shift for the company, and I don't think you can understate that. A lot of the credit for Exxon's shift on climate change went to the company's new CEO, Rex Tillerson. Some saw Tillerson as a moderating force for Exxon on the issue.

But what Chris found in the documents paints a more complicated picture. That's after the break. When your celebration of life is prepaid in advance, it becomes a gift from you to your family later because no one should have to plan for a loss while they're experiencing one. Paying in advance protects your loved ones

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Visit amex.ca slash yamx. Benefits vary by card. Terms apply. This isn't the first time Exxon is in the hot seat over how it handles climate change. Several times over the last few decades, internal information has come out about the company. ExxonMobil has long been criticized for allegedly hiding what it knew about climate change. They published a study today alleging that ExxonMobil tried to systematically mislead the public about climate change for 40 years. The oil giant ExxonMobil accurately forecast how burning fossil fuels would cause the planet to warm going as far back as the 1970s.

But the documents that Chris and reporter Colin Eaton reviewed are new and have never been made public. They come from a lawsuit filed by the New York Attorney General in 2018. So that's where we came in. We reviewed a document that summarized the top documents Exxon turned over to the New York Attorney General. documents Exxon turned over to the New York Attorney General. And the documents were designated by Exxon's lawyers as the most significant things they turned over. So it was a document about the documents, basically. A document summarizing documents. Could you talk about how you all got access?

I'll have to be delicate in describing this, but what I can say is Colin and I, in covering the company, have been developing sources in and around it for years. And I think there are people that feel like that things weren't done correctly during the Rex Tillerson period and that want to see change at the company. that things weren't done correctly during the Rex Tillerson period, and that want to see change at the company.

Rex Tillerson, the high-profile former Exxon CEO who would later go on to be President Trump's Secretary of State. Tillerson is a native of Texas, grew up in the state. He's got that Texas drawl, and I think a lot of people think of him as this sort of cowboy-like figure. Here's Tillerson in a CBS News interview in 2013. Is your philosophy drill, baby, drill? No, my philosophy is to make money.

And so if I can drill and make money, then that's what I want to do. So Rex Tillerson, he's a civil engineer by training, went to the University of Texas at Austin, and then basically comes to Exxon straight out of college and spends his entire career at the company and really ascended to the senior most ranks of the company before he became CEO. And so Tillerson became CEO in 2006, which was also when Exxon released the letter that publicly acknowledged climate change for the first time. Do we know what role he played in that letter?

You know, he's not on the letter, so we can't say for sure, but you would almost have to imagine that for such a major public policy position shift to be greenlit, it would have had to go through Tillerson. So would you say that he had an influence on Exxon's public shift on this issue? Undeniably. Undeniably. Tillerson continued to make decisions that bolstered his reputation as a moderate on climate change. There's another really important moment early in Tillerson's tenure as CEO, which is in 2008, where Exxon agrees to stop funding

third parties that were promoting climate change denialism. They had been giving money to think tanks and business groups that were publishing studies saying climate change effectively isn't real. And so in 2008, they agreed to stop funding those groups. But the documents Chris reviewed showed something else. Behind the scenes, Exxon continued to support research into studies on uncertainty in climate change and studies that were downplaying the severity of the risks of climate change. Sort of a subtle behind-the-scenes way of shaping the narrative. An internal email

from later that year shows Exxon officials supporting a pro-oil lobbying group and writing a paper about the uncertainty in measuring greenhouse gases. The documents also show that Tillerson disagreed with the findings of the IPCC, the top United Nations panel on climate change. More than once, he directed Exxon scientists to try to influence the group. Tillerson declined to comment through a representative. It's just so rare to see, I think at any company, the CEO giving his real unvarnished opinion about an issue that is, I mean, it's existential for the planet. And so to just see how they were thinking about it, what they were worried about,

what nuanced and interesting ways they were trying to shape the conversation was fascinating and something I'd never prior to this gotten to see with Exxon. Yeah, minus all of the sort of sheen of PR that even when you have a one-on-one interview with an executive, there's still sort of that screen between you and them and what is the unvarnished truth. Exactly. I mean, these are intelligent, practiced, accomplished people who know how to deal with the press. And you get the talking points. And this is Rex Tillerson talking to his climate scientist saying what he really thinks about climate change.

Tillerson stepped down as CEO of Exxon in 2017. And his next job made for some big headlines. We have some breaking news tonight. Transition sources say President-elect Trump is picking ExxonMobil CEO Rex Tillerson as his nominee for Secretary of State. When Tillerson's name was floated initially as Secretary of State,

a lot of people welcomed it. In some corners, they thought he might actually be a moderating force within the Trump administration on climate change. Back then, Trump had campaigned on a promise to pull the U.S. out of the Paris Climate Accords, an international agreement to limit global warming to less than 2 degrees Celsius. Tillerson and Exxon had both publicly expressed support for the Paris Accords.

Days after the election, when Trump got elected, Exxon retweeted, we support the Paris Climate Agreement. Then during Tillerson's Senate confirmation hearing, he too said that he supported and thought the U.S. should stay in the Paris Climate Agreement. I think it's 190 countries or thereabouts have signed on to begin to take action. I think we're better served by being at that table than leaving that table. But some of the documents Chris reviewed show that when Tillerson was still at Exxon, he was casting doubt on the Paris climate agreement. We reviewed a document that summarized a meeting to Exxon's board of directors in 2015,

not long before the Paris agreement was signed. And during the meeting, Tillerson called the two-degree target, which is basically the underpinning of the agreement, the most important part of it, he called it something magical. And he said, who is to say two and a half degrees is not good enough? And noted that it was very expensive to cut the emissions needed to meet such a target. And Tillerson was using the word magical there, not in a positive way, more like this feels made up. That's right. It's pretty clear from the documents that he thought the targets of the Paris Agreement were nonsensical, essentially, and perhaps not worth pursuing. In 2017, while Tillerson was still Secretary of State, Trump announced that the U.S. was pulling out of the Paris Climate Accords. The Paris Climate Accord is simply the latest example of Washington entering into an agreement that disadvantages the United States.

Exxon continues to publicly support the Paris Climate Agreement. And its current CEO says the company has committed to spend more than $3 billion a year on average through 2027 to reduce emissions. Exxon's annual budget is more than $20 billion. It's also worth noting we're not on track to meet the Paris climate agreements, that we are not living up to what the countries have committed to. And so I don't think you can pin all the blame on Exxon by any means. But there are a lot of environmentalists, people suing Exxon, elected officials who think that Exxon's effect on the public discourse about climate change has prevented meaningful action to address it. Exxon is currently a defendant in dozens of lawsuits around the U.S.

The company, along with other oil and gas giants, is being accused of deception over climate change and is being sued for billions of dollars in damages. Exxon has denied wrongdoing and argued that the courtroom is not the appropriate venue for addressing climate change. Chris says that lawyers in some of these cases are now seeking some of the same documents the journal reviewed. And I think this is one of Exxon's biggest concerns is there could be more revelations. I think the lawyers involved in these cases, I know the

lawyers involved in these cases, hope and think that if they get Exxon to turn over more documents, they will find incriminating things in them. You'd covered Exxon, as you said, for years before this investigation. Were you surprised by what you discovered? Not entirely, if I'm honest. I think a little bit of it appears to be saying the quiet part out loud. I think what it shows about Exxon is that climate change is an issue they can't ignore. And that whatever one's views on climate change, for Exxon, climate change is truly an existential issue, and that they've been wrestling for years on how to get it right, on what their public position

should be. And it's been a work in progress, even after they acknowledged that climate change is real. Before you go, we've got a question for you. Student loan payments are back next month. How are you feeling about yours? What changes are you making to your life, your budget, and what questions do you have about the return of your student loan payments? We'd love to hear from you. Please send us an email or a voice memo to thejournalatwsj.com. That's thejournalatwsj.com.

And let us know. That's all for today, Monday, September 18th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Colin Eaton. Thanks for listening. See you tomorrow.