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An Anti-Science Congressman Is Fighting the SEC’s ExxonMobil Probe

The oil company has been fueling climate change doubt for its own benefit, and possibly deceiving investors.

by Sarah Emerson
Oct 3 2016, 6:34pm

Congressman Lamar Smith. Image: Flickr/Alex Evers

Over the last year, a battalion of attorneys general, journalists, scientists, and activists has been clanging away at ExxonMobil's impenetrable armor of secrecy.

Through a series of exposés, such as the eight month investigation by InsideClimate News, and a suite of legal probes kicked off by New York Attorney General Eric Schneiderman, the oil and gas corporation has been accused of allegedly seeding doubt about the dangers of climate change, of which it was intimately aware, and deceiving shareholders.

Then, earlier this month, the Wall Street Journal first reported that the Securities and Exchange Commission (SEC) had launched a formal investigation into ExxonMobil's finances. The agency was specifically looking to uncover how the corporation had been valuing its oil reserves—potentially misleading investors—and whether it considered the impact that regulations pertaining to climate change would have on its assets.

The SEC is "also examining Exxon's longstanding practice of not writing down the value of its oil and gas reserves when prices fall," according to Wall Street Journal sources.

Many environmental law experts and advocacy groups applauded the SEC's decision to look into ExxonMobil's books. Greenpeace called the move "a welcome opportunity for transparency from the fossil fuel industry," in a statement on the announcement.

But now, the agency's investigation is being challenged by the House Science Committee, led by Texas Congressman Lamar Smith. The Committee issued a letter last week to SEC Chairman Mary Jo White, requesting documentation and communications related to the investigation, as well as all correspondence between SEC employees, state attorneys general, and various climate NGOs.

Yet, it's impossible to ignore that the committee, under the leadership of Rep. Smith since 2013, has advanced some of Congress' most anti-science crusades in recent history.

Why the sudden hustle for oversight? In Rep. Smith's words, the committee is worried that probes into ExxonMobil's financial dealings could advance "a prescriptive climate change orthodoxy that may chill further climate change research."

An investigation into whether ExxonMobil calculated how climate change-related regulations will impact the price of its assets, especially as the response to climate change becomes a more global one, might discourage scientific research that informs the cost of oil, Rep. Smith claims.

If we're to believe this, Rep. Smith is also concerned that the SEC's investigation overly relies on the allegations laid out in AG Schneiderman's securities fraud probe. The letter cited media criticisms that accused his investigation of being a "witch hunt," "fool's errand," and "pathetic," which, according to the Committee, failed to uncover any wrongdoings.

Yet, it's impossible to ignore that the committee, under the leadership of Rep. Smith since 2013, has advanced some of Congress' most anti-science crusades in recent history.

Last year, National Oceanic and Atmospheric Administration (NOAA) scientists published a paper in Science, discrediting the theory of a "global warming hiatus," which is favored among climate change deniers to "disprove" the existence of man-made atmospheric effects. One month later, Rep. Smith issued a subpoena to NOAA head, Kathryn Sullivan, for documents and staff communications related to the study.

When NOAA refused to hand over the internal correspondence of its scientists, the committee released a statement that could be read as a declaration of war on climate research and the very freedom of scientific enterprise the committee is bound to protect.

"It was inconvenient for this administration that climate data has clearly showed no warming for the past two decades. The American people have every right to be suspicious when NOAA alters data to get the politically correct results they want and then refuses to reveal how those decisions were made. NOAA needs to come clean about why they altered the data to get the results they needed to advance this administration's extreme climate change agenda," Rep. Smith said in a statement.

As Ars Technica pointed out last year, Rep. Smith's accusation that global warming has paused over the last two decades is patently false, and data modelling has even shown that NOAA's "altered" findings were in accordance with NASA's own results.

But Rep. Smith's attacks on scientific endeavors and credibility don't end there. Lawrence M. Krauss, director of the Origins Project at Arizona State University, noted the congressman also "introduced legislation requiring that all scientists applying for federal grants guarantee, in a special section of their grant applications, that their work is in 'the national interest.'"

And as investigations into ExxonMobil heightened this year, Rep. Smith demanded that eight environmental groups and nonprofit foundations submit their internal communications regarding the oil and gas corporation. This time, he claimed the groups had conspired to reveal how ExxonMobil covered up its knowledge about climate change, and to aimed to deprive the corporation of its First Amendment rights.

"The Committee is concerned that these efforts to silence speech are based not on sound legal or scientific arguments, but rather on a long-term strategy developed by political activist organizations," Rep. Smith said in a letter.

When environmental groups, such as the Union of Concerned Scientists, did not comply with his requests, the congressman issued a subpoena for the information.

According to Krauss, over the years, Rep. Smith has deftly utilized his subpoena power, "given to the majority party without any need to inform or obtain approval from the minority party," to strategically attack scientists whose research threatens his priorities. Throughout his political career, which began in 1989, Rep. Smith has received $679,947 in fundraising from the oil and gas industry.

Since Rep. Smith became chairman of the committee three years ago, it has issued more subpoenas than it did in the previous 54 years.

"Instead of investigating new evidence that the fossil fuel industry is funding Republican Attorneys General to go after climate laws and defend ExxonMobil, Smith seems intent in opening a new front in his witch hunt. Leading institutions, like the Bank of England, have warned that the economic fallout from the carbon bubble would be even worse than the housing crisis," said Jamie Henn, director of Strategy and Communications at 350.org.

"It's imperative that the SEC investigate these risks and Exxon's role in perpetuating them. Rep. Smith should get out of the way and spend his time learning a bit more about the actual mission of his committee: science."

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