Last May, when the Obama administration was furiously cracking down on the Kremlin in the aftermath of the CIA-backed Ukraine presidential coup and the resulting "territorial expansion" by Russia which promptly took over the Crimea peninsula (and is on its way to annexing the Donetsk republic) with attempts to "isolate" Russia, one prominent US company dared to defy the White House embargo and extended its partnership with Moscow.

This is what we posted last May: "Several of the largest oil companies in the world are doubling down in Russia despite moves by the West to isolate Russia and its economy. ExxonMobil and BP separately signed agreements with Rosneft – Russia’s state-owned oil company – to extend and deepen their relationships for energy exploration. The U.S. slapped sanctions on Rosneft’s CEO Igor Sechin in late April, freezing his assets and preventing him from obtaining visas.

However, the sanctions do not extend to Rosneft itself, allowing western companies to continue to do business with the Russian oil giant. ExxonMobil signed an agreement with Rosneft, extending its partnership to build a liquefied natural gas (LNG) terminal on Russia’s pacific coast. Known as the Far East LNG project, the export terminal will receive natural gas from Russia’s eastern fields as well as from Sakhalin-1, an island off Russia’s east coast. Rosneft announced the deal in a press release on its website on May 23. By defying the White House, the oil majors salvaged what would have otherwise been an embarrassing event for the Kremlin. The absence of the world’s largest companies would have demonstrated Russia’s increasing isolation. Instead, Russia used the event to detail plans to expand its massive energy sector. “(They're) eager to continue work on projects in Russia,” Russia’s Energy Minister Alexander Novak said of ExxonMobil and Royal Dutch Shell. To be clear, the oil companies are not legally running afoul of international sanctions. But their collective shrug in the face of European and American pressure to boycott Russia – along with the $400 billion natural gas deal Russia signed with China last week – illustrates the difficulty with which the West will have at undermining Russia’s energy sector, if it chose to do so. Russia is too big of a prize for the likes of ExxonMobil, BP, and Shell. Or viewed another way, the moves to deepen business in Russia suggest that the world’s biggest oil companies are confident that the U.S. and Europe won’t be so bold as to truly attack Russia’s energy machine.

To be sure, back than oil was over $100, and perhaps now that it is below $50 a different reality would have been unveiled, but for all intents and purposes, the take home was that while Obama was scrambling to show a united front in his ideological war against Russia, Exxon dared to cross Obama's latest "red" line.

And now it's payback time.

As the NYT reports, the New York AG has "begun a sweeping investigation of Exxon Mobil to determine whether the company lied to the public about the risks of climate change or to investors about how those risks might hurt the oil business."

According to people with knowledge of the investigation, Attorney General Eric T. Schneiderman issued a subpoena Wednesday evening to Exxon Mobil, demanding extensive financial records, emails and other documents.

The NYT adds that "the focus includes the company’s activities dating to the late 1970s, including a period of at least a decade when Exxon Mobil funded groups that sought to undermine climate science."

It is unclear just which science is envisioned: perhaps the "science" that was purchased thanks to the more than $79 billion in "climate change" money spent in the 21st century as the infamous 2009 Climate Money report by Joanne Nova revealed.

Or perhaps it was the "science" that Australia PM Tony Abbott dared to challenge? Recall Abbott previously questioned the reliability of climate science, and had proceed to probe the "statistics and data" behind the Australian Bureau of Meteorology. This "probe" threatened a potentially massive revenue stream for Goldman in the form of carbon credits, and which is why Abbott was replaced by Malcolm Turnbull: a former Chairman of Goldman Sachs Australia from 1997 to 2001.

Which "science" the NY AG is referring to is unclear, but one thing is clear: Exxon has dared to deny "climate change" and now it must be punished. As the NYT says "a major focus of the investigation is whether the company adequately warned investors about potential financial risks stemming from society’s need to limit fossil-fuel use."

A "need" spearheaded, incidentally, by the "bleeding heart humanitarian" and infinite humanist, Goldman Sachs, which stands to make billions from such programs as cap-and-trade. Here is a quick reminder of just how Goldman's profit motive is aligned with the "science" Obama finds beneficial to society, from 2009:

it’s early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs – its employees paid some $981,000 to his campaign – sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.Gone are HankPaulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm’s co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance. Here’s how it works: If the bill passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions: President Obama conservatively estimates that about $646 billion worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount. The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of all’ electricity suppliers in the U.S. total $320 billion. Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they’re the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief ofstaff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climate-change problem.” A few years later, the bank’s carbon chief, Ken Newcombe, insisted that cap-and-trade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.” * * * Cap-and-trade is going to happen. Or, if it doesn’t, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees – while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.

And, best of all, Goldman's next and potentially perhaps largest ever revenue stream has the cover of doing what is "socially right", and is, according to the NY AG, "backed by science."

That, in a nutshell, are the two sides of the "climate change" debate, and without taking either side, we show whose financial interests are most at stake.

But back to Exxon, whose financial interests are certainly at stake now that it is suddenly in the crosshairs of allegedly denying "climate change", a charge which will result in billions in settlement fees or worse.

Here is the NYT:

The Exxon Mobil investigation might expand further, to encompass other oil companies, according to the people with knowledge of the case, though no additional subpoenas have been issued to date. The people spoke on the condition they not be identified. The Martin Act, a New York state law, confers on the attorney general broad powers to investigate financial fraud. Mr. Schneiderman’s decision to scrutinize the fossil-fuel companies may well open a sweeping new legal front in the battle over climate change. To date, lawsuits trying to hold fossil-fuel companies accountable for the damage they are causing to the climate have been failing in the courts, but most of those have been pursued by private plaintiffs. Attorneys general for other states could join in Mr. Schneiderman’s efforts, bringing far greater investigative and legal resources to bear on the issue. Some experts see the potential for a legal assault on fossil fuel companies similar to the lawsuits against the tobacco companies in recent decades, costing those companies tens of billions of dollars in penalties. “This could open up years of litigation and settlements in the same way that tobacco litigation did, also spearheaded by attorneys general,” said Brandon L. Garrett, a professor at the University of Virginia law school. “In some ways, the theory is similar — that the public was misled about something dangerous to health. Whether the same smoking guns will emerge, we don’t know yet.”

The premise behind the probe is whether Exxon was "funding", and thus influencing, the other side of the argument, namely "deniers".

The sources said the attorney general’s investigation of Exxon Mobil began a year ago, focusing initially on what the company had told investors over the course of decades about the risks that climate change might pose to its business. News reporting in the last eight months added impetus to the investigation, the sources said. In February, several news organizations, including The New York Times, reported that a Smithsonian researcher who had published papers questioning established climate science, Wei-Hock Soon, had received extensive funds from fossil fuel companies, including Exxon Mobil, without disclosing them.

This reminds us of the NYT's other expose on "pay-for-research" professors such as University of Houston's very own Craig Pirrong who recently made waves reporting that commodity traders are not a "systemic risk" when it quickly became clear that they are. However, the truth is that there have been such anti-intellectual mercenaries for decades: people who will goalseek a conclusion to benefit the party that commissioned the study; Pirrong is just one of them, Wei-Hock Soon may be another, but what about the tens of billions spent to fund research slamming "climate change deniers" which incidentally, is far more prevalent and far more pervasive among the progressive media than the counter?

Logic aside what happens next is that "climate change deniers" will be treated just the same as big tobacco.

That struck some experts as similar to the activities of tobacco companies that had contrived scientific papers to suggest that smoking was safe, ultimately leading to court findings that they had defrauded the public. More recently, Inside Climate News and The Los Angeles Times have reported that Exxon Mobil was well aware of the risks of climate change from its own scientific research, and used that research in its long-term planning for activities like drilling in the Arctic, even as it funded groups from the 1990s to the mid-2000s that denied serious climate risks.

To be sure, Exxon has a different take on things.

Mr. Cohen, of Exxon, said on Thursday that the company had made common cause with such groups largely because it agreed with them on a policy goal of keeping the United States out of a global climate treaty called the Kyoto Protocol.

Ah yes, the Kyoto Protocol treaty which commits member states to reduce greenhouse gases emissions, and which the overly sensitive about global climate change United States (together with India and China) has refused to sign and has said will not ratify any treaty that will commit it from legally reducing CO 2 emissions.

It is almost as if the US is applying a double standard: one when applying moral suasion in preaching what is good for the public, and why Exxon must be punished, and a totally different one when actually implementing the pursuit of reducing cabon emissions.

But everyone knows the US would never do that.

As for Exxon, "Wall Street analysts reacted to the legal action against Exxon Mobil with mixed concerns about a company that, like other oil and gas companies, is already suffering from a plunge in commodity prices. "This is not good news for Exxon Mobil or Exxon Mobil shareholders,” said Fadel Gheit, a senior oil company analyst at Oppenheimer & Company. “It’s a negative, though how much damage there will be to reputation or performance is very hard to say.”

Brian Youngberg, senior energy analyst at Edward Jones, said, “There is headline risk, but the actual financial impact will not affect the company for a long time, if ever. I think there will be a modest overhang.”

And that is precisely what Obama wants: to keep a lid, both literally and metaphorically, on yet another sector, and have all the leverage (mostly monetarily) over an industry that for the past decade was one of the few bright spots in the US economy. Because soon energy companies, like banks, like biotechs, are about to become another "utility" of the government which will decide just how much profit is fair, and how much isn't... and has to go into the government's pocket.

More importantly, as the title suggest, with this salvo, it is now open season on "climate change deniers" everywhere. And it will certainly teach companies far and wide to defy Obama in public and make a global mockery of his ironclad foreign policy.