Thought Piece by Stephen Heins

exon energy big tobacco

[It is hard not coming to the conclusion that rhetoric and legal strategies are providing the context for any serious discussion. The RICO charges are just a manifestation.  I have included links to recent stories detailing some of the planning for the “target Exxon” campaign at the bottom.  Steve]

Exxon Is Big Tobacco? Tell Me Another

The corrupt Medicaid deal propped up tobacco stocks and government revenue.

By Holman W. Jenkins, Jr.

May 17, 2016 7:05 p.m. ET

Before anyone collapses uncritically in front of the claim by activist groups and liberal politicians that they are doing to Exxon Mobil what they did to tobacco, readers might want to take a look at tobacco stock prices.

Yup, all up strongly since the 1998 “master settlement agreement” that 46 states imposed on Big Tobacco ostensibly as punishment for its sins. How was the industry expected to pay $246 billion in alleged Medicaid damages? By selling more cigarettes, of course, now helped by a government-orchestrated pricing cartel, with the profits equitably shared between the companies, the pols and the buccaneers of the trial bar.

A decade later, the American Bar Association Journal would look back and conclude: “The only big winners in the litigation appear to be the tobacco companies, the state treasurers and the lawyers who represented both sides.”

So obviously corrupt was the outcome that it had one salutary effect: It capped the careers of the ambitious state pols who promoted this travesty. Hubert Humphrey III, possessor of Minnesota’s most illustrious name, finished last in a three-man governor’s race. Texas AG Dan Morales went to jail for creating fake documents in an attempt to secure a slice of the state’s windfall for a law-school buddy.

Dickie Scruggs, most prominent of the anti-tobacco lawyers, would later go to jail for bribing a judge. One wonders if New York Attorney General Eric Schneiderman and California’s Kamala Harris, who keep trumpeting the tobacco precedent while attacking Exxon, really have given their analogy the due diligence it deserves.

On the advice of their lawyers, tobacco executives pretended not to know what their own warning labels said, which became their main source of legal jeopardy. In allegedly parallel fashion, Exxon is accused of knowing about the science of climate change, and casting doubt on the science of climate change.

The problem is, knowing and doubting are the same when it comes to the iffy claims of climate science at its current state of development.

Rhode Island’s Sheldon Whitehouse, in his latest unattended Senate soliloquy demanding a federal RICO investigation of Exxon, claims that “real science continues to prove the connection between carbon pollution and the startling changes we see in our climate and oceans.”

He certainly didn’t get this from the latest report of the Intergovernmental Panel on Climate Change, sharer of Al Gore’s Nobel Prize. While insisting that climate models have “improved steadily,” the group abandons its central forecast of three degrees Celsius of warming from a doubling of atmospheric carbon-dioxide and offers no central forecast at all.

Where it once said warming of less than 1.5 C would be “very unlikely,” now it says warming of less than 1 C would be “extremely unlikely.”

With these adjustments, even a politicized, orthodoxy-prone IPCC recognizes an emerging shake-up in climate science. After 200 years of prolific coal burning, after 30 years of increasingly rigorous temperature measurement, data from the actual atmosphere no longer are being treated as an inconvenience by climate modelers. Now these real-world data are driving new estimates of climate sensitivity—and, lo, these estimates suggest a net impact at the very low end of previous standard forecasts.

Exxon never denied the risk of human influence on climate, as even the exposés generated by compliant media can’t help showing. Its real sin, aside from consorting with researchers with a penchant for realism, was criticizing policy proposals that would be enormously costly while having vanishingly small effect on atmospheric carbon-dioxide.

Transportation fuels account for less than 15% of global emissions, and Exxon’s production accounts for just 4% of transportation fuels. If the U.S. government were looking for somebody to sue over climate change—or, more to the point, over climate-change hypocrisy—it would do better to look in the mirror. As a recent paper by the nonprofit National Bureau of Economic Research put it, “Coal mined on federally managed lands accounts for approximately 40% of U.S. coal consumption and 13% of total U.S. energy-related CO2 emissions.”

He now criticizes the 1998 tobacco settlement, but activist Matt Myers and his group Tobacco-Free Kids walked away with a healthy share of the proceeds. Meanwhile, the states quickly reneged on their own promise to spend the proceeds on anti-smoking programs. And, just this month, a Food and Drug Administration effort to shut down e-cigarettes was quietly applauded by state treasurers and conventional cigarette companies as a step to uphold their revenue from the traditional tobacco products covered in the settlement.

As Donald Trump might say, nobody ever went broke emphasizing the dishonesty and opportunism of the U.S. political class, including the activist class. That’s your most reliable forecast for how an Exxon lawsuit might play out.