Climate Change

The Obscure Companies Threatening the Planet

Hilcorp Energy, a privately held oil and gas producer based in Texas, shows up in Violation Tracker with only $2 million in regulatory penalties, compared to more than $1.5 billion for petroleum giant Exxon Mobil. Yet according to a detailed new report published by Ceres and the Clean Air Task Force, Hilcorp dwarfs Exxon when it comes to climate-ruining emissions of methane gas.

Hilcorp is one of a group of lesser-known energy producers which turn out to be responsible for a remarkable portion of greenhouse gas emissions. The findings of the Ceres report, which outed the companies using data from the EPA’s Greenhouse Gas Reporting Project, were surprising enough to merit a front-page article in the New York Times.

Among the other low-profile/high-emissions companies featured in the report are Terra Energy Partners, Flywheel Energy, Blackbeard Operating and Scout Energy. These firms have few or no listings in Violation Tracker.

One of the reasons these companies fly under the radar is that they are not publicly traded. Some are controlled by private equity firms, making their business even more opaque.

As the Times article points out, some of these producers have purchased operations from larger, publicly traded corporations subject to more scrutiny. For example, Hilcorp acquired gas wells in the San Juan Basin in northwestern New Mexico from ConocoPhillips, reducing that company’s carbon footprint while doing nothing to reduce the burden on the climate.

It is significant that the Ceres report is appearing in the wake of the showdown at Exxon Mobil, where institutional investors concerned about the risks associated with climate change have just succeeded in winning three seats on the corporation’s board of directors.

That is a vitally important development in the effort to bring about change at the company which is still the largest overall emitter of greenhouse gases. The Ceres findings point out the necessity for the climate movement to target not only the corporate giants but also the smaller players which are having an outsized impact.

One difficulty in changing the practices of both larger and smaller corporations is the fact that the U.S. environmental regulatory system does little to punish firms for their greenhouse gas emissions. A producer such as Hilcorp can get away with its massive methane emissions because it does not need to worry about activist institutional investors or the possibility of substantial penalties from the EPA.

The EPA has gone after automobile producers such as Hyundai for their greenhouse gas emissions, but the agency has faced strong legal obstacles in the effort to regulate emissions by power plants and energy producers.

Those obstacles need to be overcome, and corporations of all kinds need to face substantial monetary penalties for their contributions to the climate crisis.

Note: Apart from the Ceres report, good use of the EPA’s greenhouse gas data has been made by the Political Economy Research Institute’s Greenhouse 100 Polluters Index, which ranks parent companies by the total emissions of their subsidiaries. In that index, power plant owners such as Vistra Energy and Duke Energy are at the top. Exxon is number 11 and Hilcorp number 36.

Exxon’s Environmental Baby Steps

Exxon Mobil would have to be included in any list of the large corporations that have done the most environmental damage over the decades.

Part of the reason would be specific events, such as the 1989 accident in which the company’s supertanker Valdez went aground off the coast of Alaska and spilled 11 million gallons of crude oil into the Prince William Sound, polluting more than 700 miles of shoreline. Although much of the guilt was laid to the captain of the vessel, who was intoxicated and away from his post at the time of the accident, Exxon was faulted for not acting quickly enough in dealing with the spill and for not adequately cooperating with state and federal officials.

Then there is the fact that Exxon was for many years one of the key corporate ringleaders in the climate denial effort. In 2015 Inside Climate News published an exhaustive expose on the company’s decades-long campaign, including the suppression of its own research showing the dangers of greenhouse gases and the associated financial risk.

Now, at long last, Exxon is changing its posture—a bit. The company has added a couple of directors with no previous ties to the fossil fuel industry, and its CEO is talking about the importance of carbon capture. In an interview with the New York Times, Darren Woods (photo) promised, as the newspaper put it, “that Exxon would try to set a goal for not emitting more greenhouse gases than it removed from the atmosphere, though he said it was still difficult to say when that might happen.”

It is frustrating to see Exxon take such tentative steps when the climate crisis is so dire and other companies such as General Motors with strong historic ties to fossil fuels are announcing much more ambitious initiatives.

Along with getting serious about climate change, Exxon needs to be a lot more diligent about basic environmental compliance. This has come home to me as I have been processing the data for a major expansion of Violation Tracker involving the addition of tens of thousands of cases from state government environmental agencies.

Exxon will end up high on the list of companies that have paid the most to states for violations of clean air, clean water, hazardous waste and other regulations. My preliminary calculation puts its total fines and settlements with state agencies at more than $540 million since 2000. That amount comes from more than 240 different cases in 22 states.

That total does not include a class action lawsuit brought in connection with the Exxon Valdez disaster. In 1994 a jury ordered the company to pay $5 billion in punitive damages to thousands of Alaskans but the company fought the award all the way to the U.S. Supreme Court, which slashed the damages to about $500 million.

I suppose it is progress that Exxon has abandoned its total refusal to acknowledge the issue of climate change, but it needs to do a lot more before it can be removed from the environmental rogues gallery.

Exxon Mobil Called to Account

Climate crisis denial has become an article of faith for rightwing politicians, including the current occupation of the Oval Office, but the primary culprits are the fossil fuel corporations that for decades covered up and obfuscated the truth about greenhouse gases. Now one of those corporations may finally pay a steep penalty for its decades of deception.

After a three-year investigation, the Office of the Attorney General of New York State has filed a sweeping lawsuit against Exxon Mobil for defrauding investors about its accounting practices relating to the risks of climate change.

There’s an irony about the terms of the lawsuit. Exxon is not being sued for its contribution to global warming nor its attempts to downplay the severity of the problem. Instead, its alleged offense was to mislead investors into thinking that it was factoring in the likelihood of increasingly stringent regulation of emissions for its business planning and investment decisions. Instead, as AG Barbara Underwood (photo) stated, “Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations.”

In other words, the lawsuit is accusing the company of failing to account for potential liabilities such as exactly the kind of litigation being brought. Shareholders probably benefited from Exxon’s past deception, but the suit is arguing that the company did not prepare them for the emerging new reality.

Underwood alleges that Exxon essentially kept two sets of books when accounting for the impact of climate change – one for public consumption that included a proxy cost for carbon and another for internal purposes that greatly reduced that expected cost or eliminated it entirely.

Exxon is still engaged in duplicity. On the one hand, it has been trying to present itself in recent times as a corporate champion of climate responsibility through steps such as funding a carbon tax initiative. Yet its response to the Underwood lawsuit was classic Exxon. A spokesperson said the lawsuit contained “baseless allegations” that are “a product of closed-door lobbying by special interests, political opportunism and the attorney general’s inability to admit that a three-year investigation has uncovered no wrongdoing.”

What Exxon is conveniently ignoring is that the lawsuit was the culmination not only of the AG’s investigation but also detailed research into Exxon’s history of climate denial by the Exxpose Exxon Campaign, Inside Climate News and Harvard University researchers Naomi Oreskes and Geoffrey Supran. The latter included a close analysis of nearly 200 company statements dating back to 1977.

Exxon’s track record of downplaying hazards matches that of Big Tobacco and the asbestos industry. Legal liabilities pushed most of the asbestos industry into bankruptcy and disintegration, while the cigarette giants remained prosperous even after paying out billions in settlements. It remains to be seen which fate awaits Exxon and the rest of the fossil fuel industry.

Will Big Oil Survive Long Enough to Pay for Its Climate Sins?

“Times are tough, you’d almost call them brutal right now. But we will adapt. We will make it.” So insisted the deputy chief executive of BP at a conference in Houston where industry leaders put on a brave face amid a worsening crisis for the petroleum sector.

Other speakers were even more explicit about the Darwinian environment. “We will be one of the last guys standing,” declared the CEO of Suncor Energy, which once prospered from the tar sands boom in Alberta and is now selling off assets.

Several dozen oil and gas producers have had to file for bankruptcy protection since the beginning of last year. More such moves are expected. The business consulting firm Deloitte has issued a report estimating that more than one-third of all petroleum exploration and production companies are in precarious financial condition, with dozens likely to make the trip to bankruptcy court.

Even the oil majors are in trouble. Chevron reported a fourth-quarter loss of $588 million, while BP lost over $2 billion in the quarter and more than $5 billion for 2015 as a whole. Exxon Mobil and Shell are still in the black but their profits are down sharply. The industry’s problems are already depressing stock prices and are starting to cause heavy losses at the banks that lent extravagantly to the energy sector during the boom time.

It’s difficult to summon much sympathy for the oil companies, given the damage they have wrought. As shown in the Violation Tracker database I and my colleagues created, the petroleum industry has racked up more than $31 billion in environmental, health and safety penalties since the beginning of 2010, far more than any other industry. Much of this is the result of the massive fines and settlements paid by BP in connection with the Deepwater Horizon disaster in the Gulf of Mexico.

Yet there is one reason to hope for the survival of the petroleum producers: we need them to survive in some form so they can be taken to court over the role they’ve played in denying the reality of the climate crisis.

As Bill McKibben notes in a recent article, we’re now at the beginning of an investigation of what may prove to be one of the biggest corporate scandals in American history — the climate coverup.

At the center of the scandal is Exxon Mobil, the biggest fossil fuel corporation on earth and the one that is probably most culpable for suppressing evidence of the impact of its products on climate change. As path-breaking research by Inside Climate News showed, Exxon — reported to be the subject of current investigations by state prosecutors in New York and California — knew about global warming as early as the 1970s and quietly used that knowledge for its own benefit while keeping it from policymakers and the public.

Forty years later, the nature of the climate crisis is public information, but Exxon Mobil and the other oil companies continue to do business as usual. In fact, their obsession with exploration and production even at a time of softening demand has helped bring about the current price nosedive.

Exxon Mobil today has assets of more than $340 billion. Soon it may have to stop using those resources to produce more harmful fossil fuels and instead pay out substantial sums in damages to communities struggling to deal with the climate mess the industry has caused.

The 2015 Corporate Rap Sheet

The ongoing corporate crime wave showed no signs of abating in 2015. BP paid a record $20 billion to settle the remaining civil charges relating to the Deepwater Horizon disaster (on top of the $4 billion in previous criminal penalties), and Volkswagen is facing perhaps even greater liability in connection with its scheme to evade emission standards.

Other automakers and suppliers were hit with large penalties for safety violations, including a $900 million fine (and deferred criminal prosecution) for General Motors, a record civil penalty of $200 million for Japanese airbag maker Takata, penalties of $105 million and $70 million for Fiat Chrysler, and $70 million for Honda.

Major banks continued to pay large penalties to resolve a variety of legal entanglements. Five banks (Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS) had to pay a total of $2.5 billion to the Justice Department and $1.8 billion to the Federal Reserve in connection with charges that they conspired to manipulate foreign exchange markets. The DOJ case was unusual in that the banks had to enter guilty pleas, but it is unclear that this hampered their ability to conduct business as usual.

Anadarko Petroleum agreed to pay more than $5 billion to resolve charges relating to toxic dumping by Kerr-McGee, which was acquired by Anadarko in 2006. In another major environmental case, fertilizer company Mosaic agreed to resolve hazardous waste allegations at eight facilities by creating a $630 million trust fund and spending $170 million on mitigation projects.

These examples and the additional ones below were assembled with the help of Violation Tracker, the new database of corporate misconduct my colleagues and I at the Corporate Research Project of Good Jobs First introduced this year. The database currently covers environmental, health and safety cases from 13 federal agencies, but we will be adding other violation categories in 2016.

Deceptive financial practices. The Consumer Financial Protection Bureau fined Citibank $700 million for the deceptive marketing of credit card add-on products.

Cheating depositors. Citizens Bank was fined $18.5 million by the CFPB for pocketing the difference when customers mistakenly filled out deposit slips for amounts lower than the sums actually transferred.

Overcharging customers. An investigation by officials in New York City found that pre-packaged products at Whole Foods had mislabeled weights, resulting in grossly inflated unit prices.

Food contamination. In a rare financial penalty in a food safety case, a subsidiary of ConAgra was fined $11.2 million for distributing salmonella-tainted peanut butter.

Adulterated medication. Johnson & Johnson subsidiary McNeill-PPC entered a guilty plea and paid $25 million in fines and forfeiture in connection with charges that it sold adulterated children’s over-the-counter medications.

Illegal marketing. Sanofi subsidiary Genzyme Corporation entered into a deferred prosecution agreement and paid a penalty of $32.6 million in connection with charges that it promoted its Seprafilm devices for uses not approved as safe by the Food and Drug Administration.

Failure to report safety defects. Among the companies hit this year with civil penalties by the Consumer Product Safety Commission for failing to promptly report safety hazards were: General Electric ($3.5 million fine), Office Depot ($3.4 million) and LG Electronics ($1.8 million).

Workplace hazards. Tuna producer Bumble Bee agreed to pay $6 million to settle state charges that it willfully violated worker safety rules in connection with the death of an employee who was trapped in an industrial oven at the company’s plant in Southern California.

Sanctions violations. Deutsche Bank was fined $258 million for violations in connection with transactions on behalf of countries (such as Iran and Syria) and entities subject to U.S. economic sanctions.

Air pollution. Glass manufacturer Guardian Industries settled Clean Air Act violations brought by the EPA by agreeing to spend $70 million on new emission controls.

Ocean dumping. An Italian company called Carbofin was hit with a $2.75 million criminal fine for falsifying its records to hide the fact that it was using a device known as a “magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea rather than using required pollution prevention equipment.

Climate denial. The New York Attorney General is investigating whether Exxon Mobil deliberately deceived shareholders and the public about the risks of climate change.

False claims. Millennium Health agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid and other federal health programs for unnecessary tests.

Illegal lobbying. Lockheed Martin paid $4.7 million to settle charges that it illegally used government money to lobby federal officials for an extension of its contract to run the Sandia nuclear weapons lab.

Price-fixing. German auto parts maker Robert Bosch was fined $57.8 million after pleading guilty to Justice Department charges of conspiring to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automakers in the United States and elsewhere.

Foreign bribery. Goodyear Tire & Rubber paid $16 million to resolve Securities and Exchange Commission allegations that company subsidiaries paid bribes to obtain sales in Kenya and Angola.

Wage theft. Oilfield services company Halliburton paid $18 million to resolve Labor Department allegations that it improperly categorized more than 1,000 workers to deny them overtime pay.

Targeting the Climate Culprits

The new U.S. National Climate Assessment makes for sobering reading. In a document of more than 800 pages, it shows that climate change is not some possibility in the distant future but rather a crisis we are already beginning to experience. Extreme weather events linked to climate change, it states, are “disrupting people’s lives and damaging some sectors of our economy.”

Although it is forthright in stating the scientific evidence, the report, as an official government document, avoids assigning blame for the run-up in greenhouse gas emissions to specific parties, and it does not make specific proposals for mitigating the problem.

A very different approach is taken in research recently published by the Climate Accountability Institute, which as its name suggests is very much about naming names. The institute’s Carbon Majors project has accomplished the remarkable feat of estimating how much in the way of carbon and methane emissions can be linked to specific companies going back decades.

In a painstaking analysis, principal investigator Richard Heede has reconstructed the corporate lineage of the major fossil fuel and cement corporations, assembled data on their historical output and estimated the greenhouse gas emissions caused by that output. In the case of Chevron, for example, the analysis goes back to 1912 and includes predecessor entities such as Standard Oil of California, Gulf Oil, Texaco, Getty and Unocal. The report also covers state-owned oil companies, which Heede notes have not done a good job of providing production statistics.

In all, Heede documents more than 900 billion metric tons of carbon dioxide equivalents and links them to 90 of the world’s largest oil, gas, coal and cement-producing entities. If contributing to the climate crisis can be considered an offense against the planet, these 90 entities are the biggest climate culprits.

So who are they? Table 11 of Heede’s report shows that the companies with the largest cumulative emissions are the following:

Chevron: 51.1 billion metric tons
Exxon Mobil: 46.7 billion metric tons
Saudi Aramco: 46 billion metric tons
BP: 35.8 billion metric tons
Gazprom: 32.1 billion metric tons
Royal Dutch Shell: 30.8 billion metric tons
National Iranian Oil Company: 29.1 billion metric tons
Pemex: 20 billion metric tons
ConocoPhillips: 16.9 billion metric tons
Petroleos de Venezuela: 16.2 billion metric tons

Pressuring these companies through a divestment campaign of the type that is beginning to take hold among U.S. universities (Stanford has just announced it will purge its portfolio of coal stocks) is a good start, but it will probably not be enough.

Other approaches are also being pursued. In an article in The Nation, Dan Zegart reports on efforts by environmental lawyers to mount a legal assault on fossil fuel companies like that used against Big Tobacco. It turns out that these lawyers are studying Heede’s research closely and are trying to figure out ways to use it in their suits.

Putting the industry on the defensive in the courts as well as in the streets is important, because the Carbon Majors will increasingly depict themselves as leaders of the effort to overcome the climate crisis rather than their true identity as key culprits in causing it to happen. I’m sure that Chevron is preparing a new version of its “Will You Join Us?” ad campaign of a few years ago, in which it painted a false picture of itself as part of the clean-energy vanguard.

The recent agreement by Exxon Mobil to insert warnings in its financial reports about the risks to its fossil fuel assets from possible stricter limits on carbon emissions is being hailed by environmentalists as a major transparency advance, but it could also be used by the company as a way of limiting future legal liability.

Another troubling sign of potential corporate maneuvering can be found in the National Climate Assessment itself. It is surprising to open Chapter 4 on Energy Supply and Use and find that one of the lead authors is Jan Dell of ConocoPhillips, one of Heede’s top-ten Carbon Majors. I, for one, would prefer not to see oil company representatives playing a role preparing key analyses of the climate crisis. The fossil fuel industry is a big part of that problem (to the tune of 900 million metric tons), not part of the solution.

The Kochs’ Stake in Pollution

Accountability_LATimesPuppets_300x250_FINALREVISED050813_2 Koch Industries and the billionaire brothers who run it are best known for their involvement in rightwing causes. The latest controversy is over the Kochs’ reported interest in purchasing the Los Angeles Times and other major newspapers owned by the Tribune Co. A campaign centered in L.A. is mobilizing opposition to such a deal among newspaper subscribers and Tribune shareholders, warning that a Koch takeover would create a new Fox News.

What often gets forgotten is that Koch Industries is not just part of the Koch ideological machine. It is a huge privately-held conglomerate with annual revenues of more than $100 billion and operations ranging from oil pipelines and refining to paper products (it owns Georgia-Pacific), synthetic fibers (it bought Lyrca and Stainmaster producer Invista from DuPont), chemicals, mining and cattle ranching.

I’ve just completed one of my Corporate Rap Sheets on Koch Industries, and it’s clear that the sins of the company go far beyond the political realm. The following is some of what I found.

In November 2011 the magazine Bloomberg Markets published a lengthy article entitled “The Secret Sins of Koch Industries” that made some explosive accusations against the company: “For six decades around the world, Koch Industries has blazed a path to riches—in part, by making illicit payments to win contracts, trading with a terrorist state, fixing prices, neglecting safety and ignoring environmental regulations. At the same time, Charles and David Koch have promoted a form of government that interferes less with company actions.”

What Bloomberg revealed for the first time were the allegations involving bribery and dealing with Iran. The article reported that the company’s subsidiary Koch-Glitsch paid bribes to secure contracts in six countries (Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia) and that it violated U.S. sanctions by doing business with Iran, including the sale of materials that helped the country build the world’s largest plant to convert natural gas to methanol used in plastics, paints and chemicals.

The environmental cases alluded to by Bloomberg had been previously reported and included the following.

In 1995 the U.S Justice Department, the Environmental Protection Agency and the United Stated Coast Guard filed a civil suit against Koch Industries and several of its affiliates for unlawfully discharging millions of gallons of oil into the waters of six states. In one of the largest Clean Water Act cased ever brought up to that time, the agencies accused Koch of being responsible for more than 300 separate spills in Alabama, Kansas, Louisiana, Missouri, Oklahoma and Texas.

In 1997 Tosco Corporation (now part of ConocoPhillips) sued Koch in a dispute over costs related to the clean-up of toxic waste at an oil refinery in Duncan, Oklahoma that used to be owned and operated by Koch. In 1998 a federal judge ordered Koch to contribute to those costs, and that ruling was upheld by an appeals court in 2000. The companies later settled the matter out of court.

In 1998 Koch agreed to pay $6.9 million to settle charges brought by state environmental regulators relating to large oil spills at the company’s Rosemount refinery in Minnesota. The following year it agreed to plead guilty to related federal criminal charges and pay $8 million in fines.

Also in 1998, the National Transportation Safety Board found that the failure of a Koch subsidiary to protect a liquid butane pipeline from corrosion was responsible for a 1996 rupture that released a butane vapor. When a pickup truck drove into the vapor it ignited an explosion that killed the driver and a passenger. In a wrongful death lawsuit a Texas jury awarded the father of one of the victims $296 million in damages.

In 2000 the U.S. Justice Department and the EPA announced that Koch Industries would pay what was then a record civil environmental fine of $30 million to settle the 1995 charges relating to more than 300 oil spills plus additional charges filed in 1997. Along with the penalty, Koch agreed to spend $5 million on environmental projects in Texas, Kansas and Oklahoma, the states where most of its spills had occurred. In announcing the settlement, EPA head Carol Browner said that Koch had quit inspecting its pipelines and instead found flaws by waiting for ruptures to happen.

Later in 2000, DOJ and the EPA announced that Koch Industries would pay a penalty of $4.5 million in connection with Clean Air Act violations at its refineries in Minnesota and Texas. The company also agreed to spend up to $80 million to install improved pollution-control equipment at the facilities.

In a third major environmental case against Koch that year, a federal grand jury in Texas returned a 97-count indictment against the company and four of its employees for violating federal air pollution and hazardous waste laws in connection with benzene emissions at the Koch refinery near Corpus Christi.

The Bloomberg Markets article reported that a former Koch employee said she was told to falsify data in a report to the state on the emissions. The company was reportedly facing potential penalties of some $350 million, but in early 2001 the newly installed Bush Administration’s Justice Department negotiated a settlement in which many of the charges were dropped and the company pled guilty to concealing violations of air quality laws and paid just $10 million in criminal fines and $10 million for environmental projects in the Corpus Christi area.

With the purchase of Georgia-Pacific in 2005, Koch acquired a company with its own environmental and safety problems. For example, in 1984 a G-P plant in Columbus, Ohio had spilled 2,000 pounds of phenol and formaldehyde that reached a nearby community. Residents complained of health problems from that incident and from a huge industrial waste pond that the company continued to maintain at the plant.

In 2009 the U.S. Justice Department and the EPA announced that G-P would spend $13 million to perform clean-up activities at a Michigan Superfund site where it previously had a paper mill. In 2010 G-P was one of ten companies sued by the Justice Department over PCB contamination of the Fox River in Wisconsin. Unlike the other defendants, G-P had already settled with DOJ by agreeing to a $7 million penalty and to pay for the costs of a portion of the clean-up. One of the other defendants, Appleton Papers, called the settlement a “sweetheart deal.”

More recently, Koch Industries has been caught up in the controversy over the Keystone XL pipeline. In 2011 Inside Climate News reported that Koch already responsible for 25 percent of the tar sands oil being imported from Canada into the United States and stood to benefit greatly from the new pipeline. Koch denied its involvement, but Inside Climate News found documents filed with Canada’s Energy Board contradicting that statement.

An August 2012 report by the Political Economy Research Institute at the University of Massachusetts-Amherst identified Koch as being among the top five corporate air polluters in the United States.

The reason the Kochs rail against regulation is clear: they’ve got a big stake in pollution.

Note: The full rap sheet on Koch Industries can be found here.

Who Pays for Extreme Weather?

As the northeast begins to recover from the ravages of Sandy, there are estimates that the giant storm caused some $20 billion in property damage and up to $30 billion more in lost economic activity.

The question now is who will pay that tab—as well as the cost of future disasters that climate change will inevitably bring about.

It’s already clear that the private insurance industry, as usual, will do everything in its power to minimize its share of the burden. Insurers take advantage of the fact that their policies often do not cover damages from flooding, passing that cost onto policyholders. Most of them are unaware of the fact and fail to purchase federal flood insurance until it is too late.

Insurers also exploit clauses in their policies that impose much higher deductibles for non-flood damages during hurricanes. Fortunately, governors in New York, New Jersey and Connecticut are blocking that maneuver by giving Sandy a different official designation (which is consistent with the National Weather Service’s use of the term “post tropical storm”). It remains to be seen, nonetheless, to what extent the insurance industry manages to create new obstacles for its customers.

The challenges for homeowners are just one part of the problem. Sandy also did tremendous damage to public infrastructure—roads, bridges, subway stations, etc. Although these are government assets, should the public sector bear the cost of rebuilding?

Many people are arguing, in the words of a New York Times editorial, that “a big storm requires big government.” That’s certainly true when it comes to initial disaster response. Many more people would have died and much more damage would have occurred but for the efforts of public-sector first responders and even the Federal Emergency Management Agency, which has been remade since its debacle during the aftermath of Hurricane Katrina.

But the challenges associated with extreme weather go far beyond those relief functions. There’s now discussion of the need for New York City to build a huge flood-prevention system along the lines of that in the Netherlands.

Taxpayers, especially those of the 99 percent, should not be forced to assume the entire cost of such a massive undertaking. Extreme weather is clearly linked to climate change, which in turn has been largely caused by the growth in greenhouse gas emissions caused by large corporations, especially those in the fossil fuel industry.

Holding corporations responsible for the consequences of climate change is not a new idea. Yet it is one that all too frequently gets drowned out amid the bloviating of the climate deniers, much of whose funding comes from the very corporate interests they are working to get off the hook.

Back in 2006 BusinessWeek wrote that lawsuits targeting corporations for global warming were “the next wave of litigation,” following in the footsteps of the lawsuits that forced the tobacco industry to cough up hundreds of billions of dollars in compensation. Such cases did materialize. For example, in 2008 lawyers representing the Alaska Native coastal village of Kivalina, which was being forced to relocate because of flooding caused by the changing Arctic climate, filed suit against Exxon Mobil, BP, Chevron, Duke Energy and other oil and utility companies, arguing that they conspired to mislead the public about the science of global warming and this contributed to the problem that was threatening the village.

Such suits have not had an easy time in the courts. The Kivalina case was dismissed by a federal district judge, and that dismissal was recently upheld by the federal court of appeals. A suit brought by the state of California against major automakers for contributing to global warming was also dismissed.

It is far from certain that corporations will continue to get off scot free. In fact, groups such as the Investor Network on Climate Risks argue that the potential liability is quite real and that this should be a matter of concern for institutional shareholders. The Network, a project of CERES, pursues its goals through initiatives such as appeals to the SEC to require better disclosure of climate risks and through friendly engagement with large corporations.

Yet it may be that a more confrontational approach is necessary to build popular support for the idea that big business needs to be held accountable for its big contribution to the climate crisis.

Unfortunately, we are already seeing steps in the opposite direction. The Bloomberg Administration in New York has already announced new storm-related subsidies that will apply not only to struggling mom-and-pop business but also to giant corporations. Unless there is a popular outcry, the city will repeat its mistakes in the wake of the 9-11 attacks of giving huge amounts of taxpayer-funded reconstruction assistance to the likes of Goldman Sachs (see the website of Good Jobs New York for the dismaying details).

The fact that the large New York banks that stand to benefit from Bloomberg’s new giveaways helped finance fossil-fuel projects that contribute to climate change shows just how self-defeating this approach is.

Rather than using public money to help wealthy corporations pay for storm damage on their premises, we should be forcing those companies to pay the costs of addressing the climate crisis they did so much to create.

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New in CORPORATE RAP SHEETS: a dossier on the many environmental and labor relations sins of chemicals giant DuPont.

Corporate Capture in Rio and at Home

The 50,000-person United Nations conference on sustainable development in Rio de Janeiro is bound to be followed by recriminations about what the nations of the world failed to accomplish. Perhaps the real story is what the planet’s giant corporations did accomplish in Rio — to advance their own interests.

Rio +20 is following what is now a familiar pattern in which governments drag their feet while major companies try to give the impression that they are the vanguard of environmental reform. The extent to which the United Nations — whose Centre on Transnational Corporations was once somewhat critical of big business — has embraced this dynamic can be seen on the website Business.UN.org, whose tagline is “Partnering for a Better World.” Corporations can post their sustainability goals on the site under the misleading category of Commitments. Whether the various goals are timid or ambitious, they are all, of course, voluntary in nature and thus unenforceable by the UN or any other body.

More is at work here than simple image-burnishing by many of the planet’s biggest polluters. According to a report issued for Rio +20 by Friends of the Earth International, large corporations and business associations have in effect hijacked the UN’s policymaking process: “There is increased business influence over the positions of national governments in multilateral negotiations; business representatives dominate certain UN discussion spaces and some UN bodies; business groups are given a privileged advisory role.”

“An even greater cause of concern,” the FOEI report goes on to say, “is the emergence of an ideology among some UN agencies and staff that what is good for business is good for society. This is reflected in a shift away from policies and measures designed to address the role of business in creating many of the problems that we face, towards policies that aim to define these problems in terms dictated by the corporate sector, meeting their needs without tackling the underlying causes of the multiple crises.”

All of this constitutes what FOEI calls “corporate capture” of the UN, a phrase that echoes the term “regulatory capture” used to describe what happens when the interests of corporations come to dominate the proceedings of government oversight agencies. FOEI has issued a statement with other NGOs decrying the excessive corporate influence over UN deliberations that has been endorsed by more than 400 groups from around the world.

It’s heartening that so many groups are willing to speak out, but it’s discouraging to realize that the same criticisms have been made for more than a decade, to little avail. At the time of the 2002 UN earth summit in Johannesburg, CorpWatch issued a report called Greenwash +10 that was already warning about the risks of the UN’s increasing commitment to corporate partnerships. It noted that one of those partnerships, Global Compact, claimed to be promoting business support for UN sustainability goals yet included among its members companies such as mining giant Rio Tinto with atrocious environmental records.

Rio Tinto is one of the companies singled out in the new FOEI report for continuing to engage in the same kind of hypocrisy. The mining company is also one of the main targets (along with BP and Dow Chemical) of the Greenwash Gold campaign, which accuses the companies of covering up environmental destruction “while pretending to be a good corporate citizen by sponsoring the Olympic games” being held this summer in London.

Undue corporate influence over climate policy is also the theme of a recent report by the Union of Concerned Scientists. While acknowledging that some U.S. companies have taken “consistent and laudable” actions in support of science-based climate reforms, it finds that others have worked aggressively to undermine such progress.

Most interesting is its finding that some large corporations have taken contradictory positions depending on the circumstances. For example, some companies are found to make legitimate statements of concern over climate change on their websites and in their filings with the Securities and Exchange Commission while misrepresenting the state of climate science in their comments submitted to Environmental Protection Agency proceedings. Companies that fall into the contradictory category — such as Alcoa, ConocoPhillips and General Electric — are said to be standing in the way of meaningful change.

Whatever positions corporations take, there will always be tension between their interests and the common good. The fact that those two goals may occasionally coincide does not justify the outsized role that corporations now have in policymaking at both the national and international levels. Progress on climate change and many other fronts will be a lot easier when we are free from corporate capture in all its forms.

Solyndra’s Fossil Fuel Cousins

Republicans show no signs of relenting in their effort to exploit the bankruptcy filing of federally-backed solar equipment company Solyndra to delegitimize not only the Obama Administration’s renewable energy policies but the very concept of green jobs.

A key element of the campaign is the depiction of Obama as having a hippie-like preoccupation with wind and solar energy. What the Republicans conveniently ignore is that Obama hedged his bets. While running for the presidency and after taking office he also promoted non-flower-power forms of energy such as nuclear and coal. Much to the chagrin of his supporters in the environmental movement, Obama embraced the industry-contrived idea of “clean coal,” otherwise known as carbon capture and storage (CCS).

It is widely forgotten that the 2009 Recovery Act (ARRA), now being vilified for appropriating funds for the loan guarantees given to Solyndra and other solar firms, also included a provision for subsidizing CCS projects. ARRA provided $3.4 billion for the Department of Energy’s Fossil Energy R&D Program. Of that amount, $1.52 billion was to support large-scale demonstration projects involving the capture of carbon emissions from industrial sources. “Stimulus Money Puts Clean Coal Projects on a Faster Track” was the headline of a March 2009 article in the New York Times.

The brave new era of CCS did not begin auspiciously. In August 2009 it was revealed that consultants working for an industry front group called the American Coalition for Clean Coal Electricity had forged letters from non-profit groups to members of Congress expressing opposition to a climate bill that was being considered at the time.

In October 2009 the Energy Department announced a set of modest-sized CCS grants to companies such as Archer Daniels Midland, ConocoPhillips and Shell Chemical. Two months later, DOE handed out a set of much larger grants totaling $979 million to American Electric Power Company, Southern Company and Summit Texas Clean Energy.

And in August 2010 the Energy Department awarded $1 billion in ARRA funds to a large CCS project operated by several companies under the name FutureGen Alliance. In a previous incarnation, FutureGen had been funded by the Bush Administration—largely to justify inaction on greenhouse gas emissions—but that money was cut off as the result of a cost study that later turned out to have a major math error.

So how has all this turned out? In July, the CCS movement was dealt a severe blow when American Electric Power announced that, despite the federal aid it was receiving, it would suspend work on its flagship Mountaineer carbon capture project in West Virginia. AEP said it based the decision on the weak economy and the uncertain status of climate policy.

Later that month, Bloomberg BusinessWeek published a report called “What’s Killing Carbon Capture,” which pointed out that the Mountaineer suspension was only one of a series of recent cancellations or postponements of CCS projects in the United States and other countries. Meanwhile, FutureGen 2.0 is years away from operation and may never justify the federal government’s huge investment.

In other words, renewables are not the only kind of energy alternatives that are in trouble. If Republicans want to use the Solyndra case to argue the failure of green job creation, they have to acknowledge that clean coal initiatives promoted by the fossil fuel sector are also going nowhere.

And if they really want to be honest, they would admit that the reasons for setbacks in wind and solar as well as in carbon capture go far beyond the handling of ARRA grants by the Obama Administration. The feeble economy presents a formidable obstacle for any new industry. A dysfunctional policy environment made even more toxic by the rise of climate change denialism creates even more turmoil for energy industry innovators, whether in the renewable or the CCS camp. It may also be the case that those innovators just don’t have a viable business plan.

Of course, the Administration’s critics are not going to concede any of this. Anti-green job demagoguery will be with us for some time to come.