ExxonMobil Litigation Update

Litigation Practice Group Teleforum

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On Monday, January 8, ExxonMobil filed a petition to depose officials of the cities and counties in California that are suing to hold Exxon liable for necessary infrastructure improvements and damages caused by the effects of global climate change. Exxon’s filing alleges that these California jurisdictions that previously asserted their imminent harm from climate change did not disclose this on their bond offerings. Hon. Boyden Gray joins us to discuss the newest developments in the Exxon litigation.

Featuring: 

Hon. C. Boyden Gray, Founding Partner, Boyden Gray & Associates

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Event Transcript

Dean Reuter:                           Welcome to the Federalist Society's Practice Group Podcast. The following podcast hosted by the Federalist Society's Litigation Practice Group was recorded on Thursday, January 11th, 2018, during a live Teleforum conference call held exclusively for Federalist Society members.

Dean Reuter:                     Welcome to the Practice Group's Teleforum conference call as today we discuss recent developments in the state AG lawsuits against energy producers. I'm Dean Reuter, Vice President, general council, and Director of Practice Groups here at the Federalist Society. Please note that all expressions of opinion are those of the expert on today's call. Also, this call is being recorded for use as a podcast in the future and will also be transcribed. We're very pleased to welcome, uh, returned guest the Honorable C. Boyden Gray. He's the founding partner at Boyden Gray and Associates right here in Washington DC. Ambassador Gray, uh, is going to begin with, uh, some opening remarks. But, as always, we'll be looking to the audience for questions, so please have those in mind. With that, Ambassador Gray, the floor is yours.

Hon Boyden Gray:           Okay, well, thank you, uh, Dean. The topic is, uh, the question of, uh, what appears to be a, uh, concerted effort by state AGs some NGOs, environmental groups, to do as much as they can to disparage, um, the, the oil companies on the grounds that they are in some singular way responsible for, uh, for climate change and for, uh, bad things that have, that have happened in terms of, of hurricanes and, and whatnot. And the, the, uh, evidence, uh, is of course in terms of precise out- uh, uh, output and precise, um, results. The evidence is, is hard to, hard to parse. Some countries benefit, um, actually from a, a warmer climate and some countries don't. The US is probably a country that to, to s- some degree, I mean, to, to, to make a, a pun but to some degree the US benefits from a warmer climate because our agricultural production, uh, increases, productivity increases, and, uh, deaths from, um, coal related, um, health problems such as the flu are, are r- rather, you know, seriously, uh, uh, reduced.

                                                So it's, it's a v- very mixed set of questions and not capable, not susceptible to resolution in a, in a court case, um, which is what, uh, these activists and AGs have been trying to find a way to set up for the last, oh, five or six years. And the latest, um, salvo in this has been a push back by the oil companies to, uh, to highlight the, the, uh, discrepancy in, uh, statements made by the m- municipalities in California. They're all on the coast, about the danger, a potentially dangerous sea rise.Sea, sea, uh, increases, uh, level increases and what, what, what's clear from, uh, the judicial record that's already been established, which is being done in Texas where they have a procedure under which a, a, a potential defendant or potential plaintiff can get pre-sued, pre-litigation discovery, before actually filing suit.

                                                And that's what, uh, oil companies, a couple of oil companies have done, and they've, uh, brought out the ra- rather striking discrepancy between what these municipalities have alleged, uh, the oil companies to have done in terms of damaging their own prospects and th- that of, of similarly affected entities. And then what they say to their own investors when they, uh, raise bond issues, uh, to pay for, um, local, local government. And the allegations against the oil companies are really quite, quite strident, quite, uh, definitive, quite declaratory, quite striking. But the, but the coverage of the same set of issues in their public, uh, documents, um, in- investment documents, uh, really do undermine almost everything they've said in these ,in these, uh, lawsuit, uh, contacts. Uh, some of the mun- municipalities simply don't, simply don't even refer to, uh, climate change in particular at all.

                                                And others say, "Well, we, we are unable to predict, we are unable to quantify. We can't tell you what's gonna happen. Um, something may happen but we can't quantify it." And of course that's, um, really quite inconsistent with what they say in court when they're suing the oil companies. And the, the, the circle simply cannot be squared and that is, that is, uh, something that, that I think people ought to be aware of. It, it, it represents a larger point that while I think most scientists, even ones who, who are skeptical about the extreme claims of, uh, other scientists. But most, most scientists agree there has been warming. You know, we had a medieval ice age that peaked in 1750 and we had been warming ever since. Um, we are warmer now than we were 50 years ago, 60 years ago, 100 years ago. Um, how much man has contributed to that is, is very up for grabs. No one really knows. Um, but it's a worldwide problem, it's not capable of resolution by, uh, a trial court in, um, California, let alone a federal court, um, such as potentially the Supreme Court, um, at the federal level.

                                                And one case that I might mention so that we don't get too far away from the law in this podcast because we are a, a legal group. Uh, one case that I think should be mentioned is AEP vs. Connecticut decided about 10 years ago. Um, where the plaintiffs invoked, or tried to invoke in the Second Circuit in New York, uh, the federal common law of nuisance as a grounds for regulating, uh, utilities. And the Supreme Court ruled, um, fair- fairly definitively that, that the federal common law of nuisance was preempted, or displaced is the, is the legal word, displaced by the Clean Air Act, even though, uh, the government had not done much at that stage, uh, under the Clean Air Act at all. But potentially it could and so the Supreme Court said, um, the federal common law of nuisance was misplaced.

                                                Now we don't really know. We don't have any direct precedent about whether this would preempt state law. But the spirit animating the, the AEP case, American Electric Power, that is. It's a utility based in Ohio. The, the spirit animating the cases that courts are just simply not qualified to deal with something which is a worldwide, uh, issue and it takes, um, entities other than courts which can only deal with concrete cases. Uh, it has to, you have to have, uh, an entity or a set of entities that can take a much broader view of what's going on. For example, uh, and then I will try to open it up for questions. For example, the allegation is that these defendants, these oil companies, that are, that are being charged in this, in this, sort of, uh, activist, um, effort, uh, by the AGs have, they, they have it is alleged accounted for 11% of all, uh, carbon that methane emissions, uh, since the beginning of time.

                                                But that's only a fraction of, of all the greenhouse gases. Um, the most im- the most, um, powerful of which is chlorofluorocarbons, which we the United States and the Montreal Protocol lead the world in abolishing basically. Um, not, not directly for climate reasons but for, uh, but for other, uh, but for other environmental reasons involving the so-called ozone hole in the stratosphere. So the United States has nothing to be apologetic about. It's, it's, it;s actively engaged in the Clean Air Act. We have the cleanest, uh, traditional air pollution, um, and, and, you know, we are, have the lowest air pollution, traditional air pollution, of any, probably any country in the Western world. Um, and we, we have led, um, uh, the world in carbon reduction in the last couple of decades since fracking got underway, uh, opening up natural gas, uh, which has displaced a lot of the coal because it's cheaper. A lot of coal use in the United States.

                                                So, and California, of course, is very actively involved. Not only, uh, in terms of automobile efficiency, but they've got a, uh, CO2 trading regime which, um, involves, uh, s- several other big states, uh, in conjunction with what they're doing. So there's a lot of activity at the federal level, a lot of activity at the state level. And we, we, uh, we have abandoned the field. This is not a question of, of turning a blind eye to a, a serious problem that deserves, uh, serious scientific and legal attention. Um, but we're trying to be, um, I think reasonable about the way it's approached and the courts are not the way to do it.

                                                I should point out in my one, my one sort of o- final opening note, that Germany, um, has in effect abandoned its own climate goals that it, that it, uh, made in terms of the Paris Accords, uh, the Paris Treaty, uh, which deals with climate change. So in ef- in effect, the Germans have dropped out too, um, which is a, just an illustration of the difficulty of dealing with these, with, with these issues and the fact that, uh, it's going to take a l- it's going to take some time, maybe a long time, to get to the bottom of it. But we, we do have the time to do it because of the greenhouse gas reductions, uh, produced by the Montreal Protocol, uh, beginning, uh, almost two decades ago. So, Dean, that's where I'll leave it, uh, and open it up for questions.

Dean Reuter:                     Very good. Thank you so much. Uh, in a moment we'll all hear an announcement that will say the floor mode is on. After you hear that announcement, if you have a question, push the star button and then the pound button on your telephone.

                                                Once again, if you have a question for Ambassador Gray, push the star button and then the pound button on your telephone. Our lines are wide open. While we wait to see if somebody rings in, let me just make a quick commercial announcement about our, about our next scheduled Teleforum conference call tomorrow at noon. We'll be talking about the case of the deductibility of the parsonage housing allowance. Uh, that's tomorrow at noon Eastern time at this same number. Today, of course, we're talking about, uh, energy producers and lawsuits, uh, against them. Uh, if you have a question, push the star button and then the pound button on your telephone.

                                                Let me get things started here with a reticent audience. Um, uh, Boyden, um, you mentioned that courts are, are not the best, uh, uh, body to, uh, to decide these issues and then you went on to talk about how the United States has not abandoned the field. Um, and I want to make sure, uh, that I'm not misreading you. Uh, I, I, I suppose that even had there been, uh, an affirmative policy decision by, uh, the policy makers to abandon the field, uh, saying we've done enough a- as a country, uh, it, it's the, the courts would still be precisely the wrong entity to, to second guess that sort of judgment.

Hon Boyden Gray:           Absolutely. The courts are the last place you should try to seek, um, any, uh, resolution or attention to, to these issues. Uh, uh, a retrospective damage award does nothing, nothing, to help, uh, figure out what can be done, what's the most efficient way to do it, and do it on an international basis, which is the way it must be done since this is an international, uh, uh, issue. So, yeah, I mean, even if the United States had said, "We're, we're, we're out of, out of the whole picture and we're going to seek repeal of the Clean Air Act and we're going to do X, Y and Z." It would, the courts would still be the wrong place to, uh, to deal with this.

Dean Reuter:                     Good. Just making sure there. Once again if you have a question push the star button then the pound button on your telephone. We've got just one question pending then our lines are wide open. Let's check in with our first caller.

Speaker 4:                           Thank you. Um, I actually wanted to ask about, uh, Bill de Blasio's announcement yesterday, uh, f- not the divestment one, but that, uh, the city of New York would also be, uh, looking to start suits I think primarily against Exxon. Uh, so I just want to ask, uh, your opinion. How lik- likely is his side to succeed in this case, uh, given that, as I understand it, they are trying to use that, uh, public nuisance structure.

Hon Boyden Gray:           Well, I don't think the chances, I don't think the prospects are very good for his, uh, for his effort and I think it's being done really for political reasons. I mean, people do sue for political reasons, not, uh, for strictly reas- uh, legal ones, that's not, um, unusual, uh, or unique. Uh, but it is still I think a p- a, a, a PR effort more than it is a le- a legal one, because I don't think, uh, it may be that a court would say th- the city of New York has no standing. Um, and th- and there is of course an element of, a small element of, or maybe a large el- element of hypocrisy. Um, New York City, uh, burns itself in terms of the subway and the mass transit and, uh, the medallion system for taxicabs and whatnot. They burn an enormous amount of, of, of carbon and the city couldn't exist without fossil fuels. It simply couldn't exist at all.

                                                And so there's a certain, there's a certain hypocrisy in all of this. And that's one of the reasons why it's an issue that needs to be dealt with, um, in the context of a set of governmental entities that are capable of taking in all the facts and not, and not trying to adjudicate a precise, as a precise issue something which is global, uh, in nature.

Dean Reuter:                     Once again our lines are wide open. If you have a question, push the star button then the pound button on your phone. Uh, I'll ask another question here and that's I've heard, uh, the nuisance theory of, of recovery mentioned a couple of times, both by you and the caller. Um, which brings to my mind the, the notion of a nuisance suit. Um, I, I, I'm wondering what you judge to be the likelihood of success of, of a lawsuit, of the initial lawsuits like this. Um, are they ... And, and I don't want to get too much into the motives uh, uh, of, of the, the plaintiffs but are, are they designed to ... Uh, was there, do you think there might have been an expectation that there just be a quick settlement? Um, so those are the questions.

Hon Boyden Gray:           You know, I don't know whether the motivation is, is a financial one. Um, I think the motivation is political. Um, it's, it's, uh, it's, uh, emotional for a lot of people that divestment, uh, becomes a question of almost belief and faith rather than hard facts and reality. And I don't, um, wanna be critical of people's motives and beliefs and, and, and, and whatnot, but, uh, the courts are not the place to do this. I don't think divestment is, is the way to go on this. I don't think that's appropriate, um, behavior on behalf of the pension fund or a university, uh, endowment. Um, the marketplace will take care of some of these issues and, uh, oil is not necessarily going to be, uh, the key, uh, to the 21st s- century or the 22nd century the way it has been since the first World War.

                                                Um, it, it was a interesting now sort of famous comment made by, uh, a Saudi oil minister who said, "You know, the Stone Age didn't end because we ran out of stone." And, uh, Bjorn Lomborg, who is, who is a, a Scandinavian scientist, um, believes that the current focus on trying to get c- concrete results out of producing some ton of CO2 gear or some ton there is it's very misplaced. He doesn't, he's not a climate denier. He doesn't believe that climate change is not happening. But he just thinks that, uh, technology will take, will take us, uh, to a place where we will solve this in a, in an orderly way that really doesn't disrupt the world economy. Because at the moment, you can't, you can't imagine the world, uh, without, uh, without fossil fuels. And that doesn't mean that they will control the marketplace 100 years from now or 50 years from now, but today, uh, it's reality, we can't get along without them.

Dean Reuter:                     Once again, if you have a question, push the star button then the pound button on your telephone. We've got two questions pending now. So let's head in the direction of our next caller.

Speaker 5:                           I missed the beginning of this call, so maybe this was already, uh, covered. But I'm interested in what your thoughts are on the public trust doctrine theory for, uh, global warming and climate change related litigation. Especially I know there's one appellate case, uh, right now when you have a bunch of people. You have one from like a 15 year old essentially saying they will represent the future, uh, population in terms of public trust area. So I'm trying to get your thoughts on that. 

Hon Boyden Gray:           I don't know what the, I don't know what the content of, uh, I don't know how it would be applied, uh, to, uh, t- t- to deal with this, Are you, uh, uh, how would a court adjudicate what one's obligations are, um, in such a, under such a, such a theory. I think it's just impossible for the court or any court to adjudicate, to adjudicate that. Um, you know, this is, this is an oversimplification, but the administrative law, a premise of, of this country and, and most of the developed world, is to do things, uh, in the context of what we administrative lawyers call rulemaking, where you get comments from the whole, the whole, uh, uh, the whole, uh landscape of, of interested parties.

                                                People who are interested in the sides, people who are interested in this, people who are interested in that. And the agency in charge either alone or in conjunction with other agencies that have overlapping responsibilities, just to try to sort through all of this. Well, courts don't do that. Courts don't hold notice and comment rulemaking. Courts don't have, uh, handed to them, uh, dozens and dozens and dozens of scientists the way the Public Health Service has or the Environmental Protection Agency has, or even the Department of Energy has, or the Department of Agriculture, all departments that have a, that have a, uh, a role to play in this, in this issue. They have expertise, um, compared to the Congress, for example, uh, a court can't begin to approximate the staffing, uh, levels of, of, of the ordinary, uh, Congressional Committee. Um, it's just the court simply is not capable of dealing with these complex, um, complex issues and figuring out what is the most efficient way of, of addressing them.

Dean Reuter:                     Uh, Boyden, this is Dean. It's, so there's an institutional problem here, but, um, I wonder if you want to talk about accountability as well. I mean, it strikes me that congressmen, uh, are accountable to the public, they're elected officials in a way that, uh, judges aren't. Is that a factor here as well?

Hon Boyden Gray:           Well, it is, uh, sure. I mean, they, they, uh, they are elected officials. They, uh, have the public looking over their shoulder, as they, as they should. And they are the ones who should, who should take hold of the first instance of what to do. And in our country though, you know, in the United States what, what, what the Congress has done, uh, is to, is to reject, uh, the Obama efforts to, uh, control climate change. And, and instead leave it to the existing law that predated, um, Obama, the Clean Air Act, uh, which does apply, um, and is being used to constrain, uh, the growth of these, these so-called pollutants. Um, and that's, and that's fine. But people should just be aware that the Congress when it was in Democratic hands under a Democratic President, rejected, um, an ambitious program that would have put us at a huge disadvantage to the Chinese and the Indians and, uh, the, the, the rapidly growing, uh, parts of Asia, uh, which are, are under no constraint and which other powers are given toward 2030, uh, China is before it has to do anything.

                                                And if you want to commit economic suicide, that's the way to do it is, is to say, "Oh, all right, United States, you go first, you, you demilitarize, you denuclearize, you, you, uh, shut, uh, your economy down and then we'll, we'll see what we'll do about it, you know, two decades later." Well, that's not, that's not a prescription for, um, for economic growth, opportunity, jobs, and, ultimately, the wealth that is going to be necessary to address, uh, the most extreme possibilities under a climate, uh, scenario.

Dean Reuter:                     We've got two questions pending again. So let's check in with our next caller.

Speaker 6:                           Hi, I just wanted to get your comment on the kind of the underlying strategy by Exxon here. It seems quite clever and interesting that they are, uh, asserting that the, if they were, if these, you know, California jurisdictions were really so worried about this as a risk, that they should have been disclosing the risk on their bond offerings. I thought that was quite funny and, uh, might be a good way for Exxon to expose how it is a political stunt. Um, you want to comment on that strategy? I just, I just thought it was amusing and, and worth a comment.

Hon Boyden Gray:           Well, that, that is (laughs) basically the reason why we have this podcast is, is, is to, is to bring, uh, bring to people's attention, uh, that there is this rather dramatic, uh, uh, conflict in what these municipalities are saying. And that's what I think Exxon is trying to do is to alert people to the fact that it, it, it just doesn't add up. Their behavior, it just doesn't this doesn't square, uh, with, with, with the facts on the ground. And it's, I, I (laughs) I, I'm, I'm interested in your, in your, um, characterization of it as clever. That makes it, that sort of has a, almost a connotation of, um, not being sincere. Um, I, I, and I think what Exxon is doing is sincere. Uh, there are all kinds of contradictions in the singling out of one set of companies in, you know, in the United States out the whole world that have contributed to th- uh, to, to this potentially contributed to this problem.

                                                It's, it's, um, it's a great publicity stunt. It makes, it makes people feel very good, I guess, when they can take a pound of flesh out of a, out of a extremely well run company that does not deny the climate is real and has, um, supported, uh, carbon taxes in the past. So it's not saying, "We are not prepared to do anything about it. We are prepared. We will support this. We would support that." But to, to take out after it in, in this way is, uh, is, uh, uh, uh, quite I think unfair and, um, counterproductive. And so Exxon's fighting back and saying, "You know, uh, watch your hypocrisy here. Watch, uh, watch what you're, what, what you're saying because it's going to come back and bite you if you're not, if you're not careful."

Speaker 6:                           Right. Agreed. I don't, uh, I don't see anything disingenuous about it but it's clever to kind of go outside the box and not fight in the, in the same realm of only denying on the topic of climate change, but rather just pointing out the hypocrisy that, in that sense-

Hon Boyden Gray:           Yeah.

Speaker 6:                           It is clever.

Hon Boyden Gray:           Well, I, I think it's a, I think it's, it's a very effective tactic, frankly. I mean, if you read, if you read and I could run through some of the quotes and, uh, but, but you can get them probably. I think Dean Reuter can make them available at the Federalist Society, if you'd like to see some summations of, of these, uh, of these statements. But the allegations that they make are simply completely, uh, undone by disclosures to, uh, the bondholders.

Dean Reuter:                     Once again if you have a question, push the star button then the pound button on your telephone. We've got one question pending, then our lines are wide open. Uh, before we go to our next caller, Ambassador, I'm wondering, was there, uh, any corollary in, uh, tobacco litigation? I'm thinking back to when, uh, tobacco companies were sued, um, under, I guess, similar theories. Um, uh, but these were, uh, the same states and cities that were bringing the suits that were taxing tobacco and, uh, uh, its citizens were using the products, obviously. Um, you, you say that, uh, New York can't exist without, without fossil fuels. It probably could exist without cigarettes, but, um, I suppose, but, um, its citizens certainly were enjoying that, uh, legal product and, uh, the cities and states were enjoying tax revenue, uh, from those products. Did, did the, did the tobacco companies ever push back in this same way?

Hon Boyden Gray:           Well, not, not, not really, uh, because the two situations are so different. There, there was a very substantial amount of, of, uh, public health evidence linking, uh, components of tobacco, uh, with, with, uh, you know, personal health, um, harm. And a lot of epidemiology, uh, went into that and the, uh, proof o- over, over the years became, uh, quite compelling. And that's in a sense I think why the tobacco companies, uh, ultimately, uh, s- s- settled because, because of, of the, of the nature of the evidence. But in this, in this set of facts, we have no way of tracing, uh, what the 11% of methane carbon produced by these, allegedly produced by these, two oil companies. No way on earth of, of tracing that down to a, a manageable, uh, declaration of damages for some municipality. In California, there's, there's simply no way of, of doing this and to try to, to look back and apportion damages given all of the, of the benefits that have come from, uh, uh, a high energy, uh, economy, uh, like ours and like now China's and India's and Europe's, uh, Japan's.

                                                Um, it, y- y- y- it's just a totally different, a totally different set of, uh, of, of conditions. And so it's very, very difficult to com- to compare the two. It's very, very difficult. It's not, they're just not comparable.

Dean Reuter:                     Once again if you have a question, push the star button then the pound button on your telephone. We've got one question pending. Let's check in with another caller.

Speaker 7:                           Thank you, sir. I wanted to ask you to comment on the legal theories that were previewed by Exxon in their filing and, in particular, uh, claim under Section 1983, um, their constitutional deprivation that they're talking about is viewpoint discrimination and as to the municipalities the policy element of that claim would certainly seem to be present, uh, by virtue of them filing these lawsuits. Uh, so could you comment on, uh, if you have any ideas about the prospects of those claims against the municipalities as it's articulated by Exxon in this filing?

Hon Boyden Gray:           Well, I think it's a, it's a, it's a very good argument. Uh, it's a, it's a little bit novel. I mean, there's not a whole lot of precedent for, uh, for the lawsuits and, um, the constitutional aspects of it are also n- novel. But that doesn't mean they're not meaningful and it doesn't mean they're not, um, they're not, uh, they, they don't merit, uh, uh, close judicial attention. Uh, the way Exxon is being and the, and the other oil companies, is being treated here is, um, uh, from a, I think a str- strict legal perspective is really quite irregular. And, um, so I think they've got a good argument that they're being, uh, they're being, uh, uh, censored, uh, they're being, um, dispossessed of their, of their rights as a company, uh, on grounds that they cannot, uh, they, they cannot get aired in a, in a court context.

                                                And so it's sort of a, you know, it becomes almost like a political game. And that's just, you know, it's not, it's not, it's not productive, it's not gonna help solve, uh, this problem in, in any way shape or form. And Exxon has, has got every right if not a duty to its shareholders, and its customers, and its suppliers, uh, and its employees. It's got a, it's got a duty to, to say, "Look, this is, this is the wrong way to do it and you're doing in ways that really do disadvantage our, um, ecosystem, our employees, our customers, our suppliers, and our shareholders." And that's, that's perfectly, uh, uh, I think it's perfectly appropriate, if not in fact demanded, uh, by the way, uh, they're, uh, they're being treated.

Speaker 7:                           Thank you.

Dean Reuter:                     We do have two more questions pending now, so let's carry on.

Speaker 8:                           [crosstalk 00:34:13] Hi, thank you. Hi, I was wondering if you can, if you have any predictions that you can share about other cities that might be following suit in a similar manner to New York and what we've seen in California?

Hon Boyden Gray:           Um, I don't know. I think the, the, the, uh, the, uh, I don't know how to ... The group that is, that is arranging all of this is not, uh, a politically diverse group. It's, it's made up of AGs from Democratic states primarily. And so it, in that sense it's quite, it's quite political. And so I would look at other major Democratic cities, maybe, maybe Chicago, uh, uh, you know, maybe, maybe San Francisco particularly. I don't know. You, you might see other cities in Democratic hands try to do something with this. Again, trying to make it into a political issue. But, again, even at a political level, it doesn't really, it doesn't really work, uh, because as I pointed out, uh, just a few minutes ago, uh, President Obama had a very, very ambitious plan to, uh, put to the Congress, but he couldn't get it out there and it was, and it was ultimately defeated by Democrats, not by Republicans, but by, but by Democrats who, who couldn't vote for it and didn't vote for it.

                                                So, uh, I don't really see this being widespread in terms of his political diversity, but I could see some more Democratic cities like jumping in just, just, just to pile on. But I don't think it's going to do anything, uh, productive.

Speaker 9:                           Characterize- 

Dean Reuter:                     Let's take another call here. Go ahead, caller.

Speaker 9:                           Why do you continue to characterize it as the problem and why does Exxon continue to support carbon taxes, when, first of all, you pointed out correctly at the beginning of this conference that, uh, that, uh, to the extent there is warming, it benefits large swaths of the world, including the United States. Second, during the, from the late '40s to the early '70s during one of the biggest periods of inter- of world industrialization, the temperature actually fell. And. among other things, number three, the Earth is actually much cooler than it was about 1,000 years ago.

Hon Boyden Gray:           Well, (laughs) I want to make a couple of additional points for your, uh, position, um, but I have to at the outset say I'm not a scientist, I'm not qualified as a scientist, I'm not a geologist, I'm not a meteorologist. I am a lawyer and I accept the basic, uh, scientific framework, I, I, because I can't quarrel with it. Um, you, I can't answer the question, I don't represent Exxon, uh, in this matter. I can't, uh, tell you why they, uh, why they would accept, or why they would support a carbon tax, uh, when, when, when you're arguing, "Well, you know there really isn't anything to this at all." Well, I, I think from Exxon's position they, they don't believe that there's nothing here. But, but when you get into the details it becomes very, very interesting and one detail, which m- most people, I think, don't fully appreciate, is that, uh, you know, it has to do with the second biggest source of CO2 emissions in the world. You probably don't know what that is. But, but, but I'll ask a question now. Are you aware of what the second biggest source is?

Speaker 9:                           I can guess is one of two things. Either humans exhaling or sheep and cattle farting.

Hon Boyden Gray:           (laughs) No, it's, it's-

Speaker 9:                           Previously about the latter.

Hon Boyden Gray:           Well, termites and, and, and cattle and, you know, do, do, do pass gas, they do. There's no question about it, um, and they are a major source. But the second biggest source of CO2 is actually, uh, cutting down, uh, parts of the rainforest in Brazil and, and Costa Rica and Borneo and wherever. Uh, so, but the point I'm trying to make is, is that, uh, the last 100 years in the United States has seen, East of the Mississippi, the greatest reforestation-

Speaker 9:                           Mm-hmm (affirmative).

Hon Boyden Gray:           ... in, in the history of mankind.

Speaker 9:                           Mm-hmm (affirmative).

Hon Boyden Gray:           Uh, for the first couple hundred years in the United States, uh, in the 17th and 18th centuries, um, the East was blanketed with forest and v- and it was all cut down to build America, to build ships, to build houses, to build office buildings, and to heat homes and whatnot. Uh, but, but in the last 100 years with most of that having been accomplished and other building materials being used, we've had a massive reforestation occur East of the Mississippi. And, a- as a result, we have deer coming into our gardens if we are lucky enough to have a garden eating all the flowers-

Speaker 9:                           Mm-hmm (affirmative).

Hon Boyden Gray:           ... uh, in, in the suburbs. But the point is, is that that re- reforestation sucked in an enormous amount of CO2 and it may very well be I've never seen numbers, no one's ever these numbers or published them. It may be that, that the United States is not really a net producer of CO2 at all. If you look at it over-

Speaker 9:                           Mm-hmm (affirmative).

Hon Boyden Gray:           ... um, when you, when the trees were cut down 300 years ago, 200 years ago, they released a lot of carbon. But that's worked its way through the system and the reforestation intake, or uptake of carbon has not worked its way through the system. It's still, it's still, um, a benefit. It's, out there and ... But, but this is the kind of thing that, that, that a court simply can't grapple with. Uh, it's, it's not something that, that lawyers really can grapple with in, in, in a legal litigation, uh, setting. And I think over time, the real facts will sort themselves out and we'll know and we'll have the c- capacity, technolog- technologically, to address these problems. If, if it turns out that they really are as dire as some people think. But, you know, the, the predictions of, of, of, of, uh, polar bears disappearing, uh, predictions of no more glaciers in the Himalayas, predictions of, uh, major s- major s- sea level increases. All of those predictions and all those dire, um, uh, statements have not, have not proved true.

Speaker 9:                           Amen.

Hon Boyden Gray:           That doesn't mean there isn't the problem, but it, but it does mean that, uh, it's a good thing we didn't, we didn't, uh, fall on our sword and destroy our economy for something that turned out not to be, uh, not to be true.

Speaker 9:                           Amen.

Dean Reuter:                     We do have yet another question pending. We've got a few minutes left. You can push the star button and the pound button on your telephone if you'd like to join the queue. For now let's go to our next caller.

Speaker 10:                         Uh, I was just curious, you said the, you mentioned the second largest source of greenhouse gassing, but what is the largest source? I, I missed that.

Hon Boyden Gray:           Well, it's CO2 and that's, um, a combination of what's known in, in environmental law as a combination of stationary sources, electricity generation, utilities, uh, on the one hand. And mobile sources, cars, trucks and buses on the other. And up until fairly recently the largest source of CO2 in America are emitted by American, uh, American, um, enterprises, uh, has been utilities. But with the, uh, displacement of coal by natural gas, uh, the, the mantle has sort of shifted to, to the transportation sector as the largest source of CO2. But combined that's, that's the largest, uh, that's the largest single source of, uh, of CO2. Now, when you get into other greenhouse gases like, uh, chlorofluorocarbons, you know, that's a question of refrigeration and, you know, refrigerators, air conditioners, both in cars and in the home. And, uh, you, you, you know, there are all kinds of comparisons that can be made, again.

Speaker 10:                         That's more related to, uh, uh, the ozone, uh, layer.

Hon Boyden Gray:           That's why it was done. That's why I was done, but it turns out that, that, um, these same products are, uh, highly potent greenhouse gases. I'll tell you one little anecdote, um, about this, which always used to irritate me when I was in the White House. We had as I said, uh, taken steps to implement the so-called Montreal Protocol, which was, which was implemented or decided or ratified under, under Reagan. But it was, um, it was implemented as Title VI of the, of the Clean Air Act, um, to reduce chlorofluorocarbons, uh, which the motivating, uh, factor being the ozone hole in the stratosphere. So, but we wanted to take credit ... That was in the election effort. We wanted to say, "Look, we've, we've made a down payment on climate change." Climate change science was a lot less definitive then, than it is now. And, uh, so it wasn't that big an issue. We want to say, "Look, we've, we've, we've taken measures to make pretty significant reductions in greenhouse gases already."

                                                And the scientists all told us, uh, including scientists who were in the White House working for President Bush, 41, um, Senior, were, were Senior. We were told in no uncertain terms, chlorofluorocarbons, CFCs, are not greenhouse gases. Well, guess what?

Speaker 10:                         They're not.

Hon Boyden Gray:           No, they are.

Speaker 10:                         Oh, they are.

Hon Boyden Gray:           So, on January 21st, 1993, guess what? They were classified as greenhouse gases. Uh, and that just shows you how political this whole thing is. The, the [crosstalk 00:45:05]

Speaker 10:                         Oh, so there was no scien- no scientific basis for that classification, it just [crosstalk 00:45:09]

Hon Boyden Gray:           No, th- no, it was purely political they didn't want the, the liberals, the [inaudible 00:45:15] didn't want a Republican, uh, taking credit for any environmental benefit. (laughs) You know? That's, Republicans don't clean up the environment, all they do is dirty it, that's, that's the narrative of the media and the, and, and Democrats. And, uh, it's quite vicious and so vicious that, you know, we weren't permitted to even speak of CFCs as, as greenhouse gases. But lo and behold, on January 21st, magically they became a greenhouse gas when a Democrat was in the White House.

Speaker 10:                         Mm-hmm (affirmative).

Hon Boyden Gray:           So that just goes ... I mean, that's just a, a political fact which occurred and it always used to frustrate me. Now it amuses me.

Dean Reuter:                     Let me make a final-

Hon Boyden Gray:           Yeah.

Dean Reuter:                     Yeah. Let me make a final call for questions. If you have a question, push the star button and the pound button on your telephone now. This is the time for the final question. Um, and I'll make a quick observation. While you two were chatting, I looked up on car insurance.com. Uh, California has nearly twice as many ... When you mentioned the transportation sector it, uh, uh, sparked some thought here. But, uh, has nearly twice as many cars as the next closest state, registered vehicles, as the next closest state. Uh, 27.6 million compared to 14 million in Texas, and more than twice as many licensed drivers as well. Uh, of the next closest state, again, Texas. So some interesting statistics there.

                                                Uh, it looks like we have had our final question, Ambassador Gray. Um, do you wanna express a final thought before we adjourn the call? 

Hon Boyden Gray:           Well, your comment about California is, is, I think, you know, uh, jumping off point while making a final sort of, uh, comment that, that, uh, somehow the oil companies are, are blamed for, uh, the consumption of oil and, therefore, the production of some CO2. But look at all the customers out there, look at all of the drivers in, in California, 24 million whatever the number is. I mean, you know, they're not being forced to burn oil by Exxon. They, they want to burn gasoline so they can get around Los Angeles and they can, uh, you know, get around the state which is very, very big. And, uh, so we're all, we're all complicit in this. If there is complicity to be handed out, we're all complicit. Those of us who drive, uh, to work or who take public transit to work, um, uh, are using, uh, energy to do that. And so we're all part of this and it's not, it's not (laughs) Exxon is providing a service to us. It's not, it's not us being commanded to do anything by, uh, by Exxon.

Dean Reuter:                     Well, Ambassador Gray, my thanks to you on my, uh, my own behalf, but also on behalf of the Federalist Society and our callers. Uh, we certainly appreciate your analysis here. Uh, I want to thank the audience as well for dialing in and for your thoughtful questions. A reminder that our next scheduled Teleforum conference call tomorrow at noon, we'll be talking about the parsonage housing allowance, but until the next call we are adjourned. Thank you very much everyone.

Speaker 1:                           Thank you for listening. We hope you enjoyed this Practice Group Podcast, For materials related to this podcast and other Federalist Society multimedia, please visit the Federalist Society's website at FedSoc.org/multimedia.