Michigan Wants to Make Big Oil Pay for Climate Change
First, according to the lawsuit, the fossil fuel industry has caused a widespread shift away from renewable energy that only makes sense in the context of anticompetitive collusion. As early as 1980, Exxon scientists had “internally modeled” that to avoid catastrophic climate change, fossil fuels would have to be abandoned. In a “competitive scenario,” they predicted, clean energy would reach a 50 percent share of the global energy market within 50 years. “A rational, self-interested, law-abiding company,” the Michigan complaint asserts, “would have used this knowledge to innovate and compete in the energy market.” Instead, Michigan claims, Exxon shared this proprietary information with its apparent competitors, both directly and via API, choosing to give up a massive business opportunity in exchange for what Michigan sees as a strategy of collusively restricting innovation to delay the inevitable energy transition. It’s as if, in the 1990s, Apple modeled internally that MP3 players were the next big thing, but instead of developing the iPod, Steve Jobs took the information to Sony and other competitors and worked together to collectively keep the market locked to CD players.
The Michigan complaint goes on to claim that Big Oil has abused intellectual property rights to suppress the development and diffusion of clean energy technologies. Exxon, which invented the lithium battery and obtained other patents on electric batteries, and even developed the first hybrid electric vehicle, has relied on these technologies rather than pursuing them. Chevron has blocked the use of rechargeable nickel-metal hydride, or NiMH, batteries, another key electric vehicle technology, with capture-and-destroy tactics to acquire NiMH patents to restrict their use in cars. Stanford Ovshinsky, the inventor of NiMH batteries, explained that the technology was never commercialized because he “made the mistake of entering into a joint venture with an oil company” and that “it’s not a good idea to go into business with someone whose strategies would put you out of business, rather than growing the business.”
The industry has pursued similar strategies, Michigan says, to curb the growth of solar power. Oil companies could have led the solar revolution: indeed, in the early 1980s, they controlled about 70% of solar power sales in the United States, which represented 85% of global supply. Instead, companies like BP focused on acquiring patents on solar technology, then engaged in extensive patent infringement lawsuits to slow progress and commercialization of the technology, before ultimately closing factories, selling off assets, and exiting the solar business altogether.
