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Lawfare California Style – AG Bonta Targets Oil Companies

3 20
04.11.2024

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Last fall, when California Attorney General Rob Bonta launched a legal war on the oil and gas industry, he pledged to make the companies pay for “engaging in a decades-long campaign of deception and creating statewide climate change-related harms.”

“This is us holding big oil accountable for their damage to our planet and our future,” Bonta told Elex Michaelson, a popular local FoxLA news reporter. But Bonta didn’t seem prepared for the logical follow-up question.

At the time, a gallon of regular gas in California averaged more than $5.60, the highest price in the nation, about a dollar more than it is today. Michaelson asked Bonta whether the landmark civil suit, modeled on the successful multi-state litigation against tobacco companies in the 1990s, would drive prices even higher.

“We are protecting folks in California, including those who pay for gas, and I don’t know what the impacts will be of our effort to hold big oil accountable, but it must end,” Bonta replied, referring to what he cast as decades of deceit by the companies aimed at downplaying their products’ impact on the climate.

Late last month, Bonta opened a new front in his war on fossil fuels, filing a lawsuit against ExxonMobil, alleging that the company also misled the public on the merits of plastic recycling. And last week, the Superior Court of San Francisco denied a motion filed by major oil producers to dismiss climate-related suits filed in California based on the court lacking “personal jurisdiction.”

Few would question Bonta’s audacity in targeting big oil and gas (former California attorneys general, including Kamala Harris and Xavier Becerra, declined to file similar suits). But the Yale-educated lawyer is well aware that sweeping legal action could push already steep gas prices across his state – and many others – higher still.

By April Bonta was saying the quiet part out loud. He acknowledged in remarks to the environmental group Climate One that one goal of the lawsuits is to make oil and gas “more expensive” as a way to discourage their use and extract “billions of dollars” in costs that the companies will “have to share with their shareholders.”

Jamie Court, president of Consumer Watchdog, a leading consumer advocacy group in California, backs Bonta’s suit targeting oil and gas companies but doesn’t want to see any costs passed on to motorists.

“The money that would go into a fund to pay for climate mitigation would come from shareholders – they can take shareholder funds and designate them if they wanted to,” he told RealClearPolitics. “I think it’s totally doable.”

It’s hard to find an economist who agrees. In the mid-1990s, a pack of cigarettes cost less than $2 a pack. Today, it’s five times that amount – far outpacing inflation – an increase due to taxes and the cost passed along to consumers by tobacco companies to comply with the litigation that now inspires lawsuits against big oil.

Gasoline prices are already high in California because of extra taxes and the state’s stringent fuel standards, meaning that punishing oil companies will lead to an even greater exodus of refineries, creating more supply problems and raising prices even higher.

Separate from any price increase Bonta’s lawsuit could spur, analysts say drivers statewide could see gas prices spike as much as 65 cents a gallon if the California Air Resources Board approves new regulations. The board has conveniently put off voting on them until Nov. 8, three days after the election.

Like California Gov. Gavin Newsom and most progressive Democrats across the country, Bonta says fossil fuels have led to a destructive long-term change in weather patterns and that fighting their effects should be a top policy priority – even if that means higher energy prices in the decades-long near term and less consumer choice overall.

But there’s hardly a consensus in this country regarding how much of a priority lawmakers should place on addressing global warming – and the level of sacrifice consumers should be asked to make.

An NPR/PBS NewsHour/Marist poll released last year found a slim majority of respondents (53%) who said addressing climate change should be given priority even at the risk of slowing the economy. That included 80% of Democrats but only 54% of independents, while nearly three-quarters of Republicans said the economy should be given priority.

Another more recent survey found that although most Americans support climate reforms, it wasn’t driving their voting preferences. Yale polling data found that climate change ranked 19th among 28 issues voters consider in deciding a presidential candidate.

Newsom’s messaging strategy that big oil is price-gouging customers has never been proven, but that hasn’t stopped him from lambasting the industry for high gas prices over the last several years and signing a bill that threatens refineries with up to $1 million in fines per day if they don’t stockpile fuel.

Even though California gas prices have decreased over the last year, they remain the highest in the country. Democrats worry the pain at the pump could hurt their election chances this November, so Newsom convened a special session to lay the blame on oil and gas producers.

While Republicans decried the move, some veteran Democrats in California considered it smart politics.

“It’s a major issue to California consumers, and since the California refineries seem to have the highest margins in the country, it’s a legitimate question to be asked – whether there’s some illegal behavior........

© RealClearPolitics


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