Michigan Wants to Make Big Oil Pay for Climate Change

First, the lawsuit says, the fossil fuel industry engineered an across-the-board abandonment of renewable energy that only makes sense in the context of anticompetitive collusion. Already in 1980, Exxon scientists had “internally modeled” that avoiding catastrophic climate change would require a transition away from fossil fuels. Under a “competitive scenario,” they predicted, clean energy would achieve a 50 percent share of the global energy market within 50 years. “A self-interested and law-abiding rational firm,” Michigan’s complaint argues, “would have used this insight to innovate and compete in the energy market.” Instead, Michigan alleges, Exxon shared this proprietary information with its ostensible competitors, both directly and through API, choosing to abandon a massive business opportunity in exchange for what Michigan argues amounted to a strategy of collusively restraining innovation to delay the inevitable energy transition. It’s like if in the 1990s, Apple had internally modeled that MP3 players were the next big thing, but instead of developing the iPod, Steve Jobs had taken the information to Sony and other competitors and worked together to collectively keep the market locked into CD players.

Michigan’s complaint then argues that Big Oil misused intellectual property rights to suppress the development and spread of clean energy technologies. Exxon, which invented the lithium battery and obtained other electric battery patents, and even developed the first hybrid electric vehicle, sat on these technologies rather than pursuing them. Chevron blocked the use of nickel-metal hydride, or NiMH, rechargeable batteries, another critical E.V. technology, with capture-and-kill tactics to acquire NiMH patents in order to restrict their use in cars. Stanford Ovshinsky, the inventor of NiMH batteries, explained that this technology was never commercialized because he “made the mistake of having a joint venture with an oil company” and “it’s not a good idea to go into business with somebody whose strategies would put you out of business, rather than building the business.”

The industry pursued similar strategies, Michigan argues, to restrain the growth of solar energy. Oil companies could have led the solar revolution—indeed, by the early 1980s, they controlled approximately 70 percent of U.S. solar sales, which accounted for 85 percent of global supply. Instead, companies like BP focused on acquiring solar technology patents and then engaging in extensive patent infringement lawsuits to slow the progress and commercialization of the technology, before ultimately closing plants, selling off assets, and exiting the solar business altogether.