More US states making 'Big Oil' pay on climate

More US states are holding major fossil fuel companies financially responsible for climate change damages.

New York legislators recently approved the Climate Change Superfund Act, mandating that the companies cover the costs of climate change-mitigation projects, if the measure is signed by Governor Kathy Hochul.

If the legislation is enacted, New York will become the second US state requiring such companies to bear some of the financial burden of climate change.

Last month, Vermont became the first state to approve such a law, and at least four other states — California, Maryland, Massachusetts and Minnesota — are considering similar measures.

The New York bill would obligate the companies to pay $3 billion annually for 25 consecutive years. The bill's supporters say that will total $75 billion for the state to address climate damages and construct more resilient infrastructure.

"Recent science has determined that the largest one hundred fossil fuel producing companies are responsible for more than 70 percent of global greenhouse gas emissions since 1988, and therefore bear a much higher share of responsibility for climate damage to New York State than is represented by the $75 billion being assessed them," the bill says.

The bill awaits Hochul's signature, and she hasn't commented publicly about it. The governor recently reversed her support for a first-in-the-nation congestion-pricing plan and halted its implementation in New York City, jeopardizing expected emissions cuts and much-needed funding for the city's subway system.

The plan was aimed at reducing traffic below 60th Street in Manhattan and increasing mass transit use.

If enacted, the climate law will affect around three dozen companies, according to a memo written by New York state Senator Liz Krueger, The Wall Street Journal reported.

"We're probably spending a lot more than [$3 billion] a year already, and the numbers keep growing when you look at flooding damage, storm damage, rising water tables, fires, pollution, health — all these things being caused by climate change," she told the Journal.

Saudi Aramco, the leading company on the list, could be liable for $644 million annually to New York, according to the memo by Krueger. That is about 2 percent of the company's first-quarter 2024 profits, which totaled $27.27 billion.

Critics argue that states lack the authority to regulate emissions, that companies shouldn't be retroactively charged for emissions that were legal when produced, and that it is unfair to target only oil companies without including power plants and car drivers who used the energy provided by the companies.

Scott Lauermann, a spokesman for the American Petroleum Institute (API), the top lobbying group for the oil and gas industry, told the Journal that he hopes Hochul will veto the legislation.

"This punitive new fee represents yet another step in a coordinated campaign to undermine America's energy advantage and the economic and national security benefits it provides," he said.