ExxonMobil RICO case a slam dunk?

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I am getting a lot of entertainment value with all of the write down of assets hoopla. I read the articles chuckling and waiting for these wizards to realize that the reserves aren't what is carried on the balance sheet as assets. But the exploration and acquisition costs. And for them to realize that 75% of XOMs properties are already producing and some have been for a long, long time. And since you can't "write up" only "write down" fixed assets a lot of them were booked at and remain on the books at some really low valuations based on projected reserve values and lower equipment and acquisition costs at the time they were booked. An example being the Hawken field that I know is 75 years old and still producing.
 
Jibes with the Reuters and WSJ articles....they say that when XOM develops a field they assume the amortization will be over a long term, so they don't need to take even multi-year price drops into account....just keep pumping.
 
So, our man Lamar Smith does not like the SEC investigation into Exxon's accounting practices either, and smells a rat. He has issued a subpeona to the SEC to figure out who put them up to it....

https://insideclimatenews.org/news/...ate-investigations-new-york-massachusetts-sec

The SEC told Exxon in 2014 that its 'climate impact whitepaper' was inadequate (whitepaper discussed upthread), and that it needed to redo it. Not really a surprise to me that the SEC would follow up when no new statement was issued. Interestingly, Exxon has said that it will comply with the SEC investigation (into its accounting practices), unlike the RICO case that it is fighting in court.

Meanwhile, lest anyone think Lamar is overstepping his bounds, he invited a bunch of legal scholars to come in and explain that what Lamar was doing was perfectly appropriate...notably to protect science from the machinations of various bad actors including George Soros....

http://arstechnica.com/science/2016...l-justification-for-climate-change-subpoenas/

When someone pointed out that the Science Cmte had issued 1 subpeona in its 50 year history before Lamar Smith, and 24 since Lamar became chairman, Rep Smith corrected him to say that it was actually '25 and counting'.... your tax dollars at work.
 
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woodgeek said:
Carbon bubble issue gathers steam?

Quote from:
http://digbysblog.blogspot.com/2015/11/a-rico-exxon-lawsuit-slam-dunk-to-win.html

Your background. Bernie Sanders and Sheldon Whitehouse in the Senate, and Ted Lieu and Mark DeSaulnier in the House, have called on the Department of Justice to investigate ExxonMobil for possibly perpetrating fraud, and if warranted, launch a RICO investigation of the company (and other fossil fuel companies) similar to the tobacco industry lawsuit it launched, and won, more than a decade ago. In addition, four House members including Ted Lieu have also called on the SEC to investigate Exxon for fraud, perhaps under the Sarbanes-Oxley law.

From Sen. Sanders' letter (quoted here):
"I am writing regarding a potential instance of corporate fraud - behavior that may qualify as a violation of federal law." I've written about this a number of times, as have others, notably Bill McKibben. Here I want to look at what a set of investigations might mean. My source is this piece from Seeking Alpha, an investor-oriented site. At the end, I've appended arequest for our Democratic candidates for president in the form of a speech I'd like one of them to give.

A "Slam Dunk" to Win

The first point from my headline is this: So many damaging Exxon documents have already been made public, that according to Seeking Alpha, a Department of Justice lawsuit would be a "slam dunk" to win. Duane Bair at Seeking Alpha:
On October 20, 2015, Vermont Senator Bernard Sanders sent a letter to Attorney General Loretta Lynch asking the Department of Justice to investigate allegations made public through an in-depth expose by InsideClimate News. The Pulitzer Prize winning group is dedicated to providing objective facts regarding the debate around energy and climate change. The reporters spoke with hundreds of former Exxon scientists and executives, combed through thousands of pages of scientific studies and thousands of in-house memos. Their findings are astonishing. [...]Here Bair details why those findings are "astonishing." I urge you to click through if you want a fast summary of the extend of the wrong done by Exxon executives, and how far back that wrong-doing goes.
Click to expand...

This came out of the democrat candidate's emails yesterday from her husband. "“I recommend that you begin by saying that this challenge is an opportunity if we approach it the right and way,” the note read, including an unnecessary word, “and provide the right financing options so that the old energy economy no longer has an advantage over new ways of providing and consuming energy.” don't think that that would be looked upon in a favorable light if it was turned around. a glimpse into how gov't works. link to article http://www.msn.com/en-us/news/politics/newly-released-hillary-clinton-emails-offer-glimpse-at-husband’s-advice/ar-BBx9EEE?li=BBmkt5R&ocid=spartanntp
 
I hear you Doug, but the 2009 email was re the Copenhagen conference....at which there was no international agreement. Indeed, the lack of intl agreement was due to the (then) high cost of renewable energy, and the question of who would pay for deploying it in the developing world.

So, I see the email as a hypothetical discussion about a politically untenable idea that was never implemented. Yawn.

And that is all quite irrelevant to 2016, since the costs of renewable energy have fallen dramatically since then, and all the major CO2 emitting countries are deploying RE at scale, on their own dime, and participated in an intl agreement that they will continue to do so.
 
woodgeek said:
I hear you Doug, but the 2009 email was re the Copenhagen conference....at which there was no international agreement. Indeed, the lack of intl agreement was due to the (then) high cost of renewable energy, and the question of who would pay for deploying it in the developing world.

So, I see the email as a hypothetical discussion about a politically untenable idea that was never implemented. Yawn.

And that is all quite irrelevant to 2016, since the costs of renewable energy have fallen dramatically since then, and all the major CO2 Mr. Clinton offers his recommendations for negotiating with China, India and other poor countries in the days leading to the Copenhagen conference on climate change in December 2009.


1.hypothetical discussion about a politically untenable idea that was never implemented. Yawn ?? guess he was only talking about the US?"Mr. Clinton offers his recommendations for negotiating with China, India and other poor countries in the days leading to the Copenhagen conference on climate change in December 2009." I did not see this as unilateral but collectively amoung nations.

2. emitting countries are deploying RE at scale, on their own dime, and participated in an intl agreement that they will continue to do so. so they continue support level as energy costs have come down on the carbon side.

knowing the COP failed, really pushed RE programs of their own, each country was already involved. paris put it all together.

point is, if I'm an energy company , I'm gonna fight to survive. rico certainly puts up another road block. you have to play by their(gov't) rules.
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If I savvy you Doug, you seem to be implying that Paris is realizing the agenda of Copenhagen? I disagree....Copenhagen fell apart b/c the rich countries wouldn't put up the cash, and the poor ones couldn't build RE without $$ help. Under Paris COP21 the rich countries are NOT paying to emerging economies to build out renewable energy systems.

Each country is paying its own way these days, and the financials of RE look quite favorable, esp if you take health and welfare of the population into account. But maybe your energy companies don't worry about the latter....many of our leaders do.
 
As promised, Exxon has complied with the SECs examination of its reserves valuation model...

The WSJ has a nice article: http://www.wsj.com/articles/exxon-mobil-profit-revenue-slide-again-1477657202

IF you don't have a subscription, you can try googling "Exxon Warns on Reserves as It Posts Lower Profit"

Bottom line, Exxon says that the new price environment (of the last 23 mos) has rendered roughly 20% or their reserves unprofitable, so they will write down a comparable amount by the end of the year (the exact %-age will depend on the oil price over the next two months)

The article has a number of details, including that most of the writedown reserves are Oil Sands in Alberta.

A little known fact is that the Oil Majors bought into a bit of oil doomerism back in the 70s, invested in solar, alternative fuels and the oil sands. My friends that were at Exxon at the time said senior Exxon Mgmt concluded that Alberta would eventually drive the entire global market, its hydrocarbon assets were so huge. They joked about scraping most of the surface of Alberta off, and surface mining the sands, as the logical consequence of rising global oil demand and falling supply. Those investments tanked in 1985, and the majors have been super leery of doomerism and alternative energy since. I think this 'once burned, twice shy' thing is part of Rex's skepticism of an alternative energy fueled future...its not all profiteering.

But Exxon kept its hand in Alberta, as one of its few 'unconventional' investments, like a monkey with its hand around a piece of fruit in a trap. Now after close to 40 years, it might be letting go of that prize, and its dream of cornering the world market for mid 21st century oil.

The implications for Canada are obviously significant as well. We'll see if Justin has a plan.
 
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they will....its kabuki. the last person not appointed was in 1987. :confused:
 
They may be looking to assert their authority. Not limited to the current pres-elect but presidential power has been out of control in the last 20yrs or so. Adams et al must be turning in their graves.
 
Heading into 110% AshCan territory. Closing thread. Thanks to all that kept it objective for this long.
 
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I went one step farther BG. And blew away the post that just pissed me off. Yeah, I know. Power mad moderator. >>
 
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