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FINAL%209-15%20COMPLAINT

Telephone: (510) 879-1008 Fax: (510) 622-2270 E-mail: Heather.Lewis@doj.ca.gov

:{ROB BONTA Attorney General of California EDWARD H. OCHOA Senior Assistant Attorney General LAURA J. ZUCKERMAN Supervising Deputy Attorney General

/s/ Heather M. Lewis_ HEATHER M. LEWIS ERIN GANAHL MARI MAYEDA BRIAN CALAVAN KATE HAMMOND Deputy Attorneys General Attorneys for Plaintiff People of the State of California

ex rel. Rob Bonta, Attorney General of California}:

FACTUAL BACKGROUND ............................................................................... 32 A.

Defendants Are Substantially Responsible for Causing and Accelerating Climate Change ................................................................... 32 B. }:

Defendants Went to Great Lengths to Understand the Dangers Associated with Fossil Fuel Products, and Either Knew or Should Have Known of Those Dangers ................................................................ 36 C. }:

Defendants Did Not Disclose Known Harms Associated with the Intended Use of Fossil Fuel Products, and Instead Affirmatively Concealed Those Harms by Engaging in a Campaign of Deception to Increase the Use of Those Products ...................................................... 52 D. }:

Defendants Could Have Chosen to Facilitate, and Be Part of, a Lower-Carbon Future, but Instead Chose Corporate Profits and Continued Deception ................................................................................. 71 E.}:

Defendants’ Internal Actions Demonstrate Their Awareness of the Impacts of Climate Change and Their Intent to Continue to Profit from the Unabated Use of Fossil Fuel Products........................................ 72 F.

Defendants’ Actions Have Slowed the Development of Alternative Energy Sources and Exacerbated the Costs of Adapting to and Mitigating the Adverse Impacts of the Climate Crisis .............................. 74 G.

Defendants Continue to Deceive California Consumers Through Misleading Advertisements That Portray Defendants as Climate-Friendly Energy Companies and Obscure Their Role in Causing Climate Change ......................................................................................... 80 1.

Defendants’ Affirmative Promotion of Fossil Fuel Products as “Green,” “Clean,” or Otherwise Good for the Environment Is Likely to Mislead California Consumers About How Use of Those Fossil Fuel Products Leads to Climate Change

............................................................................. 81 2.

Defendants’ Affirmative Claims That They Contribute Substantially to Climate Change Solutions Are Likely to Mislead California Consumers ...................................................... 88}:

api}:

H. Defendants’ Concealments and Misrepresentations Regarding the Dangers of Fossil Fuel Products Encouraged Continued Use of Fossil Fuels and Discouraged Concerted Action on Greenhouse Gas Emissions .................................................................................................. 92 I. }:}:

The Effects of Defendants’ Deceit Are Ongoing ...................................... 94 J.

:{The State Has Suffered, Is Suffering, and Will Suffer Injuries from Defendants’ Wrongful Conduct ................................................................ 96 1.

Extreme Heat ................................................................................. 97 2.}:

Drought and Water Shortages ..................................................... 100 3.

Extreme Wildfire ......................................................................... 102 4.

Public Health Injuries .................................................................. 107 5.

Extreme Storms and Flooding ..................................................... 109 6.

Damage to Agriculture ................................................................ 111 7.

Sea Level Rise, Coastal Flooding and Coastal Erosion .............. 114 8.

Ecosystem, Habitat, and Biodiversity Disruption ....................... 116 V.

CAUSES OF ACTION ....................................................................................... 120

First Cause of Action: Public Nuisance .............................................................. 120

Second Cause of Action: Action For Equitable Relief For Pollution, Impairment, And Destruction of Natural Resources ..... 123

Third Cause of Action: Untrue or Misleading Advertising ................................ 125

Fourth Cause of Action: Misleading Environmental Marketing......................... 126

Fifth Cause of Action: Unlawful, Unfair, or Fraudulent Business Practices ...... 127

:{Sixth Cause of Action: Strict Products Liability ................................................. 128

Seventh Cause of Action: Negligent Products Liability ..................................... 131}:

VI. PRAYER FOR RELIEF ...................................................................................... 133

VII. REQUEST FOR JURY TRIAL .......................................................................... 136

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API

:{:{...Acting on behalf of and under the supervision and control of the Fossil Fuel Defendants, API has, since at least 1988, participated in and led several coalitions, front groups, and organizations that have promoted disinformation about the climate impacts of fossil fuel products to consumers—including, but not limited to, the Global Climate Coalition, Partnership for a Better Energy Future, Coalition for American Jobs, Alliance for Energy and Economic Growth, and Alliance for Climate Strategies. These front groups were formed to promote climate disinformation and advocacy from a purportedly objective source, when in fact these groups were...}:

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p 71

  1. Defendants’ deception also significantly delayed the transition to alternative energy

sources that could have prevented some of the worst impacts of climate change in California.

Exxon had long forecasted—and other Defendants were aware—that alternative energy sources

could have penetrated half of a competitive energy market in 50 years if allowed to develop

unimpeded. However, by sowing doubt about the future consequences of unrestricted fossil fuel

consumption, Defendants’ deception campaign successfully forestalled development and

dissemination of alternative fuels, as well as legislation supporting a broad-based transition to

alternative energy sources. This delay led to emission of huge amounts of avoidable greenhouse

gases, thereby ensuring that the damage caused by climate change will be substantially more

severe than if Defendants had acted in a manner commensurate with their internal knowledge of

climate risks.

E. Defendants’ Internal Actions Demonstrate Their Awareness of the Impacts

of Climate Change and Their Intent to Continue to Profit from the

Unabated Use of Fossil Fuel Products

  1. In contrast to their public-facing efforts challenging the validity of the scientific

consensus about anthropogenic climate change, the Fossil Fuel Defendants’ acts and omissions

since the 1970s—including taking expensive actions to protect their own investments from the

impacts of climate change—have evinced their clear understanding of the realities of climate

change and its likely consequences. These actions have included making multi-billion-dollar

infrastructure investments for their own operations, including, among others, the following:

raising offshore oil platforms to protect against sea level rise; reinforcing offshore oil platforms to

withstand increased wave strength and storm severity; and developing technology and

infrastructure to extract, store, and transport fossil fuels in a warming Arctic environment.121

  1. For example, oil and gas reserves in the Arctic that were not previously reachable due

to sea ice are becoming increasingly reachable as sea ice thins and melts due to climate change.122

In 1973, Exxon obtained a patent for a cargo vessel, such as a tank ship, capable of breaking

through sea ice for use in Arctic operations123 and for an oil tanker124 designed for Arctic

operations.

  1. In 1974, Texaco (Chevron) obtained a patent for a mobile Arctic drilling platform

designed to withstand significant interference from lateral ice masses.

125

  1. Shell obtained a patent for an Arctic offshore platform adapted for conducting

operations in the Beaufort Sea in 1984.126

  1. In 1989, Norske Shell, Royal Dutch Shell’s Norwegian subsidiary, altered designs for

a natural gas platform planned for construction in the North Sea to account for anticipated sea

level rise. Those design changes added substantial costs to the project.127

a. In 1979, Norske Shell was approved by Norwegian oil and gas regulators to

operate a portion of the Troll oil and gas field.

b. In 1986, the Norwegian parliament granted Norske Shell authority to complete

the first development phase of the Troll field gas deposits, and Norske Shell began designing the

“Troll A” gas platform, with the intent to begin operation of the platform in approximately 1995.

122 Henderson & Loe, The Prospects and Challenges for Arctic Oil Development, Oxford

Institute for Energy Studies (Nov. 2014) p. 1, available at

https://www.oxfordenergy.org/publications/the-prospects-and-challenges-for-arctic-oildevelopment/ (as of Sept. 13, 2023). 123 ExxonMobil Research Engineering Co., Patent US3727571A: Icebreaking cargo vessel

(granted Apr. 17, 1973), available at https://www.google.com/patents/US3727571 (as of Sept. 13,

2023). 124 ExxonMobil Research Engineering Co., Patent US3745960A: Tanker vessel (granted

July 17, 1973), available at https://www.google.com/patents/US3745960 (as of Sept. 13, 2023). 125 Texaco Inc., Patent US3793840A: Mobile, arctic drilling and production platform

(granted Feb. 26, 1974), available at https://www.google.com/patents/US3793840 (as of Sept. 13,

2023). 126 Shell Oil Co., Patent US4427320A: Arctic offshore platform (granted Jan. 24, 1984),

available at https://www.google.com/patents/US4427320 (as of Sept. 13, 2023). 127 Greenhouse Effect: Shell Anticipates a Sea Change, N.Y. Times (Dec. 20, 1989),

available at https://www.nytimes.com/1989/12/20/business/greenhouse-effect-shell-anticipates-asea-change.html; Lieberman & Rust, Big Oil Braced for Global Warming While it Fought

Regulations, L.A. Times (Dec. 31, 2015), available at https://graphics.latimes.com/oil-operations

(as of Sept. 13, 2023).

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Based on the very large size of the gas deposits in the Troll field, the Troll A platform was

projected to operate for approximately 70 years.

c. The platform was originally designed to stand approximately 100 feet above sea

level—the height necessary to stay above the waves in a once-in-a-century-strength storm.

d. In 1989, Shell engineers revised their plans to increase the above-water height

of the platform by three to six feet in order to account for higher anticipated average sea levels

and increased storm intensities due to global warming over the platform’s 70-year operational

life.128

e. Shell projected that the additional three to six feet of above-water construction

would increase the cost of the Troll A platform by tens of millions of dollars.

F. Defendants’ Actions Have Slowed the Development of Alternative Energy

Sources and Exacerbated the Costs of Adapting to and Mitigating the

Adverse Impacts of the Climate Crisis

  1. As GHG pollution accumulates in the atmosphere, some of which (namely CO2) does

not dissipate for potentially thousands of years, climate changes and consequent adverse

environmental changes compound, and their frequencies and magnitudes increase. As those

adverse environmental changes compound, and their frequencies and magnitudes increase, so too

do the physical, environmental, economic, and social injuries resulting therefrom.

  1. Delayed societal development and adoption of alternative energy sources and related

efforts to curb anthropogenic GHG emissions have therefore increased environmental harms and

increased the magnitude and cost to address harms, including to California, that have already

occurred or are locked in as a result of historical emissions.

  1. Therefore, Defendants’ campaign to obscure the science of climate change to protect

and expand the use of fossil fuels greatly increased and continues to increase the injuries suffered

by California and its residents. Had concerted action to reduce GHG emissions begun earlier, the

subsequent impacts of climate change could have been avoided or mitigated

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  1. Defendants have been aware for decades that clean energy presents a feasible

alternative to fossil fuels. In 1980, Exxon forecasted that non-fossil fuel energy sources, if

pursued, could penetrate half of a competitive energy market in approximately 50 years.129 This

internal estimate was based on extensive modeling within the academic community, including

research conducted by the Massachusetts Institute of Technology’s David Rose, which concluded

that a transition to non-fossil energy could be achieved in around 50 years. Exxon circulated an

internal memo approving of Rose’s conclusions, stating they were “based on reasonable

assumptions.”130 But instead of pursuing a clean energy transition or warning the public about the

dangers of burning fossil fuels, Defendants chose to deceive consumers to preserve Fossil Fuel

Defendants’ profits and assets. As a result, much time has been lost in which consumers and

policymakers could have done much to mitigate the climate crisis in California.

  1. The costs of inaction on anthropogenic climate change and its adverse environmental

effects were not lost on Defendants. In a 1997 speech by John Browne, Group Chief Executive

for BP America, at Stanford University, Browne described Defendants’ and the entire fossil fuel

industry’s responsibility and opportunity to reduce the use of fossil fuel products, reduce global

CO2 emissions, and mitigate the harms associated with the use and consumption of such products:

[W]e need to go beyond analysis and to take action. It is a moment for change and

for a rethinking of corporate responsibility.

. . . .

[T]here is now an effective consensus among the world’s leading scientists and

serious and well informed people outside the scientific community that there is a

discernible human influence on the climate, and a link between the concentration

of carbon dioxide and the increase in temperature.

. . . .

We [the fossil fuel industry] have a responsibility to act, and I hope that through

our actions we can contribute to the much wider process which is desirable and

necessary.[notes]

BP accepts that responsibility and we’re therefore taking some specific steps.

To control our own emissions.

To fund continuing scientific research.

To take initiatives for joint implementation.

To develop alternative fuels for the long term.

And to contribute to the public policy debate in search of the wider global answers

to the problem.131

  1. Despite Defendants’ knowledge of the foreseeable, measurable, and significant harms

associated with the unrestrained consumption and use of fossil fuel products, in California as

elsewhere, and despite Defendants’ knowledge of technologies and practices that could have

helped to reduce the foreseeable dangers associated with their fossil fuel products, Defendants

continued to promote heavy fossil fuel use, and mounted a campaign to obscure the connection

between fossil fuel products and the climate crisis, thus dramatically adding to the costs of

abatement. (See supra, Section IV.C.) This campaign was intended to, and did, reach and

influence California consumers, along with consumers elsewhere.

  1. At all relevant times, Defendants were deeply familiar with opportunities to reduce

the use of fossil fuel products and associated GHG emissions, mitigate the harms associated with

the use and consumption of these products, and promote development of alternative, clean energy

sources. Examples of that recognition date back to the 1960s, and include, but are not limited to,

the following:

a. In 1980, Imperial Oil (Exxon) wrote in its “Review of Environmental

Protection Activities for 1978–79”: “There is no doubt that increases in fossil fuel usage and

decreases in forest cover are aggravating the potential problem of increased CO2 in the

atmosphere. Technology exists to remove CO2 from stack gases but removal of only 50% of the

CO2 would double the cost of power generation.”132 [notes]

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b. A 1987 company briefing produced by Shell on “Synthetic Fuels and

Renewable Energy” emphasized the importance of immediate research and development of

alternative fuel sources, noting that “the task of replacing oil resources is likely to become

increasingly difficult and expensive and there will be a growing need to develop clean,

convenient alternatives. . . . New energy sources take decades to make a major global

contribution. Sustained commitment is therefore needed during the remainder of this century to

ensure that new technologies and those currently at a relatively early stage of development are

available to meet energy needs in the next century.”133

c. A 1989 article in a publication from Exxon Corporate Research for company

use only stated: “CO2 emissions contribute about half the forcing leading to a potential

enhancement of the Greenhouse Effect. Since energy generation from fossil fuels dominates

modern CO2 emissions, strategies to limit CO2 growth focus near term on energy efficiency and

long term on developing alternative energy sources. Practiced at a level to significantly reduce the

growth of greenhouse gases, these actions would have substantial impact on society and our

industry—near-term from reduced demand for current products, long term from transition to

entirely new energy systems.”134

  1. Despite these repeated recognitions of opportunities to reduce emissions and mitigate

corresponding harms from climate change, Defendants continued to sow doubt and

disinformation in the minds of the public regarding the causes and effects of climate change, and

methods of reducing emissions. Examples of those efforts include, but are not limited to, the

following:

a. In 1996, more than 30 years after API’s president told petroleum industry

leaders that carbon emissions from fossil fuels could “cause marked changes in climate” by the

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133 Shell Briefing Service, Synthetic Fuels and Renewable Energy, Shell Service Briefing,

:{No. 2 (1987), available at https://www.climatefiles.com/shell/1987-shell-synthetic-fuelsrenewable-energy-briefing/ (as of Sept. 13, 2023).

134 Flannery, Greenhouse Science, Connections: Corporate Research, Exxon Research and}:

:{Engineering Company (Fall 1989), available at

https://www.climatefiles.com/exxonmobil/1989- exxon-mobil-article-technologys-place-marketing-mix/ (as of Sept. 13, 2023).}:

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year 2000 if not abated,135 API published the book Reinventing Energy: Making the Right

Choices to refute this very conclusion. Contradicting the scientific consensus of which its

members had been aware for decades, the book claims: “Currently, no conclusive—or even

strongly suggestive—scientific evidence exists that human activities are significantly affecting

sea levels, rainfall, surface temperatures, or the intensity and frequency of storms.”136 The book

also suggested that even if some warming does occur, such warming “would present few if any

problems” because, for example, farmers could be “smart enough to change their crop plans” and

low-lying areas would “likely adapt” to sea level rise.137

b. In the publication, API also contended that “[t]he state of the environment does

not justify the call for the radical lifestyle changes Americans would have to make to substantially

reduce the use of oil and other fossil fuels” and that the “benefits of alternatives aren’t worth the

cost of forcing their use.” “Some jobs definitely will be created in making, distributing and selling

alternatives. But they will come at the expense of lost jobs in the traditional automobile and

petroleum industries,” the authors continued. “[A]lternatives will likely be more expensive than

conventional fuel/vehicle technology. Consumers, obviously, will bear these increased expenses,

which means they will have less to spend on other products. This in turn will . . . cost jobs.”138

c. API published this book to ensure its members could continue to produce and

sell fossil fuels in massive quantities that it knew would devastate the planet. The book’s final

section reveals this purpose. API concluded: “[S]evere reductions in greenhouse gas emissions by

the United States, or even all developed countries, would impose large costs on those countries

but yield little in the way of benefits—even under drastic climate change scenarios.”139

  1. The Fossil Fuel Defendants could have made major inroads towards mitigating the

harms they caused, and in particular, the State’s injuries, by developing and employing [notes]

77

technologies to capture and sequester GHG emissions associated with conventional use of their

fossil fuel products. The Fossil Fuel Defendants had knowledge of these technologies dating back

at least to the 1960s, and, had indeed, internally researched many such technologies.

  1. Even if the Fossil Fuel Defendants did not adopt technological or energy source

alternatives that would have reduced the use of fossil fuel products, reduced global GHG

pollution, and/or mitigated the harms associated with the use and consumption of such products,

the Fossil Fuel Defendants could have taken other practical, cost-effective steps to mitigate the

harms caused by their fossil fuel products. Those alternatives could have included, among other

measures, the following:

a. Refraining from affirmative efforts, whether directly, through coalitions, or

through front groups, to distort public debate, manipulate public perception and the public policy

agenda, and cause many consumers, business, and political leaders to think the relevant science is

far less certain than it actually is;

b. Acknowledging the validity of scientific evidence on anthropogenic climate

change and the damages it will cause people, communities (including the State), and the

environment. Disseminating that evidence would have changed the public policy agenda from

determining whether to combat climate change to deciding how to combat it; avoided much of the

public confusion that has ensued since at least 1988; and contributed to an earlier and quicker

transition to cleaner energy sources in California that could help minimize catastrophic climatic

consequences;

c. Forthrightly communicating with consumers, the public, regulators,

shareholders, banks, insurers, and the State, and warning them about the global warming hazards

of fossil fuel products that were known to Defendants, which would have enabled those groups to

make informed decisions about whether to curb the use of these products—including whether and

to what extent to invest in alternative clean energy sources instead of in fossil fuels;

d. Sharing their internal scientific research with consumers, lawmakers, and the

public, as well as with other scientists and business leaders, to increase public understanding of

the scientific underpinnings of climate change and its relation to fossil fuel products;

e. Supporting and encouraging policies to avert catastrophic climate change, and

demonstrating corporate leadership in addressing the challenges of transitioning to a low-carbon

economy; and

f. Prioritizing development of alternative sources of energy through sustained

investment and research on renewable energy sources to replace dependence on hazardous fossil

fuel products.

  1. Despite their knowledge of the foreseeable harms associated with the consumption of

fossil fuel products, and despite the existence of, and the fossil fuel industry’s knowledge of,

opportunities to reduce the foreseeable dangers associated with those products, Defendants

wrongfully promoted and concealed the hazards of using fossil fuel products, delaying

meaningful development of alternative energy sources and exacerbating the costs of adapting to

and mitigating the adverse impacts of the climate crisis, including the climate crisis in California.

G. Defendants Continue to Deceive California Consumers Through

Misleading Advertisements That Portray Defendants as Climate-Friendly

Energy Companies and Obscure Their Role in Causing Climate Change

  1. Defendants’ deceptive conduct continues to the present day, albeit through updated

messaging. Now, rather than engaging in outright denials of the existence of climate change,

Defendants deflect attention from their role in causing climate change by falsely portraying fossil

fuel products as environmentally friendly, climate-friendly, or otherwise less environmentally

damaging than those products really are.

  1. Defendants have continued to mislead the public about the impact of fossil fuel

products on climate change through “greenwashing.” Through recent advertising campaigns and

public statements in California and/or intended to reach California, including but not limited to

online advertisements and social media posts, Defendants falsely and misleadingly portray these

products as “green,” and the Fossil Fuel Defendants portray themselves as climate-friendly

energy companies that are deeply engaged in finding solutions to climate change. In reality,

Fossil Fuel Defendants continue to primarily invest in, develop, promote, and profit from fossil

fuel products and heavily market those products to consumers, with full knowledge that those

products will continue to exacerbate climate change harms....