States’ greedy lawsuits against oil will hurt us all

Several U.S. states and cities are trying to sue or legislate fossil fuel companies out of existence while lining their own pockets. Hawaii has litigation against fossil fuel companies pending before its state supreme court as well as the U.S. Supreme Court. Similarly, California’s attorney general and lesser jurisdictions are suing fossil fuel companies. Recently, the Vermont legislature passed a bill requiring fossil fuel companies to pay for storm damage in 2023.

The claims about harm are speculative. The legal and constitutional arguments are even worse. These blatant cash grabs will usher in a brave new world of predation and conflict in which every state legislature will seek to fill its coffers at the expense of its neighbors.

State officials and other aspiring petty tyrants have no right to cancel the American energy industry and impoverish American citizens.

These states have confused their authority to regulate emissions generated within their state’s borders with the alleged indirect effects of global emissions in their state. If any of these states succeed in their attempt to extort billions of dollars from fossil fuel companies, our entire economy will be at risk of catastrophic contraction.

Still, states continue their crusade against fossil fuel companies because, as Willie Sutton famously said of banks, “That’s where the money is.” State officials hungry for more funding see fossil fuel companies as a tempting target. These efforts blend climate change alarmism with financial opportunism.

In Vermont, advocates claim that Senate Bill 259, “An act relating to climate change cost recovery,” simply holds fossil fuel companies accountable for damage they caused Vermonters by drawing oil from the ground, refining it, and selling it to customers whose use of it then released greenhouse gases that contributed to climate change, which increased the severity of these storms.

If that sounds like a stretch, that’s because it is.

Ironically, these states attempt to penalize the unintended indirect consequences of fossil fuels that they themselves have benefited from tremendously. People benefit, not only when they drive to work or to the store, but whenever they buy goods or go out to eat or fly in an airplane or turn on a light switch. We shouldn’t penalize companies that deliver tremendous value to us every day.

We know that when governments shake down fossil fuel companies, all those activities become much more expensive. California shows us what a war on fossil fuels creates: $5 per gallon gas and electricity costs twice the national average. Similarly, Europe’s war on fossil fuels has made its electricity costs twice those of the United States and four times those of China.

Stealing billions of dollars from domestic fossil fuel companies (really shareholders, workers, and customers) will drive costs through the roof, bringing higher prices at the pump and skyrocketing electricity costs.

Allowing any and every jurisdiction to shake down U.S. oil and gas companies will also stunt economic growth. Look again at Europe. Their economy has grown less than 1% a year since 2010. Such shakedowns may eventually shutter America’s energy industry altogether, in which case China, Russia, and Saudi Arabia will sit back and laugh while gladly accepting billions of our dollars for their oil and gas.

Allowing states to pursue speculative damages from American companies will discourage entrepreneurship, innovation, and investment, as executives will worry about being sued or taxed for potential unintended consequences of their decisions from years or decades ago.

These state cash grabs should be rejected quickly and definitively. State officials and other aspiring petty tyrants have no right to cancel the American energy industry and impoverish American citizens.