Designated For Destruction: California’s Economic Oxygen


Like it or not, the industry that drives California’s economy is the hydrocarbon business. But fossil fuels have become villains in the Golden State story and are now so detested that lawmakers want to cruelly and unusually punish the companies that provide the energy as they also try to kill them off.

The Polluters Pay Climate Cost Recovery Act, Senate Bill 1497, requires “fossil fuel polluters to pay their fair share of the damage caused by the sale of their products.” The “responsible parties” are defined as entities that between the 2000 and 2020 calendar years, did business in the state or otherwise had sufficient contact with the state. These entities are “responsible for more than 1,000,000,000 metric tons of covered fossil fuel emissions, as defined, in aggregate, globally during the covered period.”

Then, within a “year of the effective date of the act,” the ​​California Environmental Protection Agency is to “conduct a climate cost study to, at a minimum, quantify the total damage amount, which the bill would define as all past and future climate harms and damages to the state through December 31, 2045.”

Is the bill in effect a death sentence?

Certainly the state is, as energy author and consultant Todd Royal says, “trying to extract money out of fossil fuel companies” to the point of bankruptcy.

“A crazy climate ideology has taken over,” he says.

Despite all the dutiful support SB 1497 will no doubt receive, Royal believes its future is uncertain. Even if passed and signed, he’s convinced it won’t survive an inevitable court challenge.

He might be right. New York City sued several oil companies and the American Petroleum Institute on Earth Day in 2021, claiming they had violated the city’s Consumer Protection Law and the New York City Administrative Code. Marxist Mayor Bill de Blasio bragged that the city was “taking on some of the biggest polluting corporations for false advertising and greenwashing.”

The suit was filed in state court three weeks after the city failed to advance its agenda in federal court. The U.S. Court of Appeals for the Second Circuit ruled on April 1 of that year that a city could not “utilize state tort law to hold multinational oil companies liable for the damages caused by global greenhouse gas emissions.” Turns out “that the federal common law displaced state law in this context.”

The city and county of Honolulu have also used the courts as “a ‘stalking horse’ for Green New Deal.” While the ​​Hawaii Supreme Court, made of “hyper-ideological justices,” says one critic, has allowed Honolulu’s suit to roll on, there’s some speculation the U.S. Supreme Court will step in and curb the Hawaii court’s “Aloha spirit” legal interpretations.

Not to be left out, California has jumped into the legal fray. Last fall, Gov. Gavin Newsom and state Attorney General Rob Bonta filed suit in San Francisco County Superior Court, complaining that “Big Oil” has created, contributed to, and/or assisted “in the creation of state-wide climate change-related harms in California.”

The point is, activist governments will do anything to appease the climate cult and burnish their green bona fides, even if their agenda keeps being pushed back into their faces. They hope to wear down the system that stands in the way of their crusade.

If they do, they will then run into the same problem that fictional candidate Bill McKay did when he won a California U.S. Senate seat and then, bewildered by his unexpected victory, asked, “What do we do now?” Because a win for the climate fanatics is a loser. No modern economy can run without the fuel provided by crude oil. Not now, not in a decade, not in 50 years.

Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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