Environmentalists say a groundbreaking investigation in New York involving energy giant ExxonMobil could have implications for Canadian oil producers.

The state's attorney general is looking into allegations the company lied to the public and investors about the risks of climate change.

"This is the thin edge of the wedge," says Keith Stewart, climate and energy campaign co-ordinator for Greenpeace.

"Similar to tobacco — it took time for these court cases to kick in, but once they did, the damages were in the billions."

Who should pay?

The investigation stems from media reports claiming Exxon saw the dangers of fossil fuels in its own research as far back as the 1970s, but funded groups that publicly challenged climate change in the decades that followed.

Keith Stewart, Greenpeace

Keith Stewart, climate and energy campaign coordinator for Greenpeace, says he thinks climate change lawsuits against oil companies are inevitable. (greepeace.org)

ExxonMobil says the allegations are unfounded. In blog posts, vice-president of public affairs Ken Cohen tackles a report in the Los Angeles Times, saying it's based on "selective, out-of-context use of publicly available documents."

Cohen says ExxonMobil has been open about its research on climate change for decades. But that's different from being certain about the effects: "We have nothing to hide."

The truth of those allegations will unfold in time. But Stewart said what's just as significant is that the battle over climate change appears to be moving into courtrooms.

Last year, Greenpeace and the World Wildlife Fund sent letters to dozens of Canadian and international oil companies to get them on the record about their public communication and lobbying efforts around climate change.

Stewart says they're hoping to lay the groundwork for court cases to come, in the event oil producers have been working to slow efforts to fight global warming.

Tobacco example

That is a page taken directly from litigation that saw tobacco manufacturers pay billions in the United States for deliberately misleading consumers about the health impacts of smoking.

At the time, the Canadian Association of Petroleum Producers dismissed the letters as a stunt, pointing to the industry's efforts to to advocate for carbon policy. Greenpeace, they say, just wants to shut down the industry.

West Coast Environmental Law staff counsel Andrew Gage said he knows of no evidence Canadian companies have been sitting on research.

But the possibility of litigation opens up a question of financial liability.

Who should pay for damage from hurricanes, storms, ice melts and damage done to infrastructure as a result of global warming?

"Fossil fuel companies have been making billions of dollars of profit, they've known that their product was actually causing these kinds of impacts. Is there a conversation about the kind of share they should be paying?" he asks.

"That is a very live question for the Canadian companies, because if they didn't know when they set up the oil sands operations, they should have known very shortly thereafter."

Other environmental lawyers suggest the list of potential defendants could include the past government of Canada — for withdrawing from the Kyoto Protocol and muzzling Environment Canada scientists.