Here’s why gas prices could skyrocket again


We’re all looking for relief from record-high gas prices these days.

Gas prices are the highest in the United States history at a nationwide average of $4.59 as of May 19, according to AAA. Many states surpass this average with California at $6.050, Nevada at $5.224, Washington at $5.148, and New York at $4.868, to name a few.

But lawsuits filed by several cities across the country could actually drive gas prices even higher. In the name of climate change, over a dozen federal lawsuits have been filed by state and local governments, including New York City, Baltimore, and several California cities. They are suing oil and gas companies for alleged damages they caused contributing to climate change.

So what do climate change lawsuits have to do with the devastating gas prices sweeping the nation?

State and municipal climate lawsuits are anti-growth, anti-innovation, and anti-environment. They could impose large economic costs on families and businesses as the hundreds of billions of dollars in damages these municipalities are seeking in these lawsuits would inevitably be passed along to consumers.

As calculated in a new Pacific Research Institute study, for every $100 billion in potential judgments in these cases, gas prices could rise by 31 cents per gallon — or an additional $326 per household per year in higher energy costs.

As Americans suffer through painful inflation increases, such additional costs are simply unaffordable for most households.

Burdening consumers and businesses with additional costs is detrimental not only to economic growth but discourages the private sector innovation required to meet America’s clean energy goals. A strong economy fosters an environment more conducive to developing the meaningful innovations required to address the global climate change these municipalities claim to be fighting for.

In fact, increasing use of natural gas contributed to the decline of carbon emissions over the past twenty years. The U.S. Energy Information Administration (EIA) has noted that “the 4% decrease in U.S. carbon intensity came largely from a decrease in the consumption of fuels with high carbon contents. Part of this change came from the continuing trend of natural gas and renewables displacing coal for electric power generation, both of which have lower or zero carbon content. Low natural gas prices supported this switch from coal use, and higher natural gas prices in 2021 have started to reverse this trend.”

The development of once-celebrated natural gas through private sector innovation has resulted in lower overall emissions. Investors see this litigation effort as a threat, making them less likely to make future investments in nuclear energy advancements, new battery technology, improved fuel efficiency and other innovations required to continue lowering emissions.

We cannot afford to stifle positive incentives for innovation in this space. Rather than continue with these lawsuits, there are other, better ways that state and local governments concerned about climate change can make positive changes. For example, they could increase incentives for private sector investment by reducing taxes for the companies working to develop innovative technologies that reduce GHG emissions. Such a positive-focused policy has the potential to address the risks associated with climate change through the private sector, rather than punishing innovators who have successfully reduced emissions through misguided lawsuits.

It’s time to find new ways to make America’s clean energy potential a reality. If these lawsuits are successful, we will continue to see increased energy expenditures for consumers across the country, further strained family budgets, rising costs of production for businesses, and decreased motivation to innovate — while ironically reducing our progress in combating climate change.

Dr. Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute and author of the new issue brief, “Counterproductive.” Download a copy at

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.

Scroll to Top