Dan Zegart, senior fellow at the Climate Investigation Center, says New York State Attorney’s settlement with Peabody Energy is not satisfactory given the damage caused by denying climate change
Story Transcript
SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to the Real News Network. I’m Sharmini Peries coming to you from Baltimore. On Monday, following a two-year investigation, Peabody Energy, the world’s largest publicly traded coal company, reached a settlement with the New York State Attorney General’s Office. In the settlement Peabody Energy agreed that it would end misleading statements issued to its shareholders and disclose risk arising from climate change. Attorney General Eric Schneiderman has also launched a similar investigation into ExxonMobil for misleading information released to the public, not only about climate change science and risk associated with fossil fuels but about the cost of transitioning to renewable energy. Now joining us to discuss all of this from Stockton, New Jersey is Dan Zegart. Dan is a senior fellow at the Climate Investigation Center, and an investigative journalist, a ten-year TV and newspaper veteran, and the author of Civil Warriors: The Legal Siege on the Tobacco Industry, which is an eyewitness account of the cigarette wars of the mid-90s that led to the regulation of the tobacco industry. Dan, thank you so much for joining us. DAN ZEGART: Thank you for having me. PERIES: So Dan, let’s right off the top take a look at the New York State attorney general, Eric Schneiderman, and what he said about the Exxon case here. ERIC SCHNEIDERMAN: There are numerous statements over the last 20 years or so that question climate change, whether it’s happening, that claim that there is no competent model for climate change. So we’re very interested in seeing what science Exxon has been using for its own purposes, because they are tremendously active in offshore oil drilling in the Arctic, for example, where global warming is happening at a much more rapid rate than in more temperate zones. Were they using the best science and the most competent models for their own purposes, but then telling the public, the regulators and shareholders, that no competent models existed? PERIES: Dan, Peabody Energy and Exxon have been actively misinforming the public, and the attorney general here has really taken this up. And the real question to you is, does the attorney general go far enough in this settlement? ZEGART: No, I don’t think so. I mean, I think the settlement was extremely disappointing, particularly when you consider that this investigation actually began under his predecessor, Andrew Cuomo, in 2007. Really all they’re going to do is change what they say in their annual financial statements to the Securities and Exchange Commission where they talk about risk, and what the risks might be from, let’s say, litigation or regulation. It might have to do with coal. We already know that the price of coal has plunged to historic lows. And we also know that Peabody has funded and otherwise encouraged the denial of climate science by, by a number of scientists and also through the funding of front organizations like the American Coalition on Clean Coal Energy, which is an oxymoron if there ever was one, clean coal energy. And what they’re doing here is they’re actively disputing that global warming is taking place. And the Schneiderman probe did not go into that at all. Many people had hoped that it would once we learned that there was going to be a settlement. So this is really not a satisfactory conclusion. It’s better than nothing, but not a lot better than nothing. PERIES: Now, one of the things that happen in this kind of settlement is that it really kills the public debate. You know, when a case like this is prolonged and taken up by the attorney general you would think the best case scenario we could have is not a settlement but an ongoing debate and discussion, media coverage about the case and what Exxon, or in this case Peabody has done, and so on. But the debate is shut down here. It’s not really servicing the public interest. Do you think he could have done a different kind of job here? ZEGART: Well, I do think so. And I hope, we hope that he will do a different job with Exxon. And there’s, there is indication that he will. You know, I think those of us who have been watching Peabody are not going to cease our vigilance. And there are a great many NGOs and environmental groups who are going to continue to push very hard to see that Peabody really is brought to justice. As far as Exxon goes, the attorney general’s effort here is a good deal more far-reaching. He’s not only, as you mentioned, the top of the program, he’s not only looking at investor statements about the future impact of climate change, but also the overestimation by Exxon that there would be huge costs for transitioning to renewable energy, which we know is not true. And the documents and so forth that we hope will come out of the ExxonMobil probe could take us to a very different understanding of what the company, and indeed the whole industry, has been doing or not doing about climate change. So we have hope that the ExxonMobil investigation also, because we’ve seen the particulars as far as his press release went and his public statements where he’s talking about, we want to see records as to what ExxonMobil spent on climate change denying organizations. We want to see how much money they’ve spent on participating in trade associations like the American Petroleum Institute, the American Legislative Exchange Council, that are actively promoting climate denial, which is throwing sand into the gears of the entire world’s effort to do something about this life-threatening crisis. PERIES: Now, I guess the real question is that will this decision or what the attorney general of New York is doing here have any impact on the coal industry in terms of the public reliance on coal, which is 30 percent of the energy supply in the U.S. Do you think this will have any dampening effect on the industry itself? ZEGART: Oh, absolutely. I mean, we’re already seeing, there’s–we can’t tell if the two or three dollar drop in Peabody stock yesterday was as a result over the last couple days, was a result of the investigation or not. But already the Wall Street and the investor community and big financial–and the big banks, the big rating agencies, have already downgraded Peabody stock multiple times. People knew that something like this was coming, and it certainly, the whole investor community is very, very cognizant that Peabody is a terrible bet as an investment. The industry is in structural decline, it’s never going to rebound. And 30 percent, that’s down from about 10 percentage points just in the last couple of years. So coal plants are being shut down every, every month. Every year there are more coal plants being taken out of service. The industry’s turning to natural gas. And we hope more and more to renewables, and they are turning somewhat more to renewables. Wind and solar. So the outlook is not good for Peabody, and this is another nail in the coffin. PERIES: And then let’s take up this issue, while production seems to be down, exports in terms of coal is increasing. That’s exports to China and India. But let’s take that up in our next segment. ZEGART: I’ll be happy to join you. PERIES: Thank you, and we’ll be back.
Part 2
PERIES: Dan, so in segment one we were talking about the shifts that are taking place in the coal industry, and you said many plants have been shut down, and the coal industry is on the decline. But we are actually also seeing a great deal of coal being exported. In fact, right here in Baltimore if you go down to the port you see mountains and mountains of coal being shipped out to places like India and China. What do you make of that? ZEGART: Well, I mean, the overall pattern is of decline. I mean, you know, there are certainly exports of coal abroad, to Asia particularly, which is the only area of the world where demand is growing or, or even stable. But India has announced targets to scale back, and in particular less imported coal. They want to use more of their own coal. But they also are trying very hard to, and have announced targets, to reduce coal consumption. China the same, trying to reduce coal consumption and pledging, in fact, to President Obama just a few months ago to meet some real targets in terms of reductions. So the, there may be temporary spikes or ups or downs, but the overall, the long-term picture, certainly going back a number of years, is steady and inevitable decline. This is not the fuel of the future, it’s the fuel of the past. PERIES: And leading up to Paris, now one of the things the United States will have to agree to is containing its fossil fuel consumption. Do you think that the U.S. is in any position to actually make some commitments that will stick? ZEGART: I do. I do, and I also think that we’re going to see at COP21 a push to get the big energy companies out of the COP process, which they have had a very unfortunate influence on. And to expose some of what Attorney General Schneiderman is trying to expose in terms of what this gigantic energy company, Exxon, the influence it’s had in retarding progress on climate. I would like just to, if I might, just to give you an example of what I’m talking about here, by reading from a document that came from Exxon’s own files. We’re talking here now about research that they did in the late ’70s and early ’80s where they learned about climate change, and basically in their own minds realized that climate change was happening and it was driven by burning fossil fuels, okay. PERIES: Yes, please do. ZEGART: Thank you. This is a letter, this is November 9, 1979. This is a letter from the president of Exxon research and engineering, Edward E. David Jr. Mr. David was actually, spent 20 years at [Dell] labs. So he was quite an accomplished scientist by the time he came to Exxon. And he, he talks about how they’ve written–this is the eighth in our series of presidents’ letters, meaning letters from the president of engineering and research, outlining the work we’ve initiated to help evaluate the so-called greenhouse effect, a potential future global warming caused by the accumulation of CO2 in the atmosphere. This is 1979. Fast forward to just a, a few years ago and you will see that they were still denying that this science was reliable and that the earth was warming. And then they talk, at the end of this paragraph it says, we focus on past and future growth of atmospheric CO2 concentrations rather than on the resulting effect of CO2 on climate. However, our data could well influence Exxon’s view about the long-term attractiveness of coal and synthetics relative to nuclear and solar energy. Why is that important? That shows they were thinking about what kinds of fuels would be best for the earth. What kinds of fuels would be the most harmful, what kinds of fuels would be the most helpful. They were thinking about what choice they were going to make about energy. This giant company, back in 1979. I think once this comes to the attention of the world community there’s going to be a lot of pressure to get ExxonMobil and the other big energy companies out of the process. PERIES: Now, that seems to me a very reasonable request on the part of social movements. But there are other social movements that actually see the business community or the corporations as a part of the solution when it comes to climate change because they’re the only ones with the resources and the money and the research and investigative dollars in order to come up with renewable energy mechanisms, methods, equipment, all of that that needs to be built to switch to a green economy. What do you make of that? ZEGART: Well I mean, I think, I think it’s a false dichotomy. I mean, this is going to happen one way or the other because that’s where the money is going. Where the investments are going, you know. We have this short, we have a window now for natural gas, for natural gas is being exploited more than it’s ever been. But that’s going to change. Natural gas is also a potent source of greenhouse gas emissions. The money is moving towards renewables. You know, we have an electric car now that can drive as far as a conventional car. Storage capacities are being developed. We really don’t need ExxonMobil to do it, it’s being done. The scale up will happen because these companies will recognize that they have to invest. And anyone who’s waiting for the energy companies to lead the way is, needs to look at the past history, and they will understand that that is not going to happen. And we are going to have to, the people of the world and people with COP are going to have to make it happen. And they’re going to be dragging these companies and forcing them to do it. It is not going to be done voluntarily. PERIES: And finally, who opened the doors to the corporate sector in the UN process in the first place? ZEGART: Well, it was actually a part of the DNA of the process going back to the beginning of this. They had a seat at the table going all the way back to the conferences at Rio and then at Kyoto. They–ExxonMobil actually sent one of their top scientists, Brian Flannery, to the COPs in the past. And Flannery was a very good scientist at ExxonMobil who originally was part of this climate team that discovered that climate change back in the late ’70s and ’80s for ExxonMobil was in fact happening and caused by fossil fuels. So they took Brian Flannery and then they pivoted in the late ’80s and began denying climate change. Then they took Mr. Flannery and converted him to a spokesman to speak against the reality of global warming. And they’ve been sending him to the IPCCs, the conferences, the global climate change conferences ever since. So it is not necessary to have the companies there. A world tobacco treaty was negotiated by the World Health Organization a decade or so ago without the participation of the tobacco companies. There’s no reason for the perpetrators of what is really a crime against the earth to be present at the table. PERIES: All right. And I thank you so much for joining us, and we’ll be following this all the way to Paris and beyond, and I hope you can join us again. ZEGART: Thank you very much for having me. PERIES: And thank you for joining us on the Real News Network.
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