California’s Crude Court Attack on Oil Companies
Both the Golden State and New York City are targeting oil companies over climate change.
No city in America can function without fossil fuels. Nevertheless, last year a slew of money-grabbing opportunists along the California coastline began targeting BP, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell in court, where they are trying to compel said oil companies to fund climate change mitigation. Oakland, San Francisco, Santa Cruz and Imperial Beach along with Santa Cruz, Marin and San Mateo Counties argue that they shouldn’t be financially liable for erecting infrastructure to combat sea level rise. Instead, the municipalities contend, the funding should be seized from oil companies, wherein the fault allegedly lies.
Successfully litigating a blockbuster attack on oil companies won’t be easy, particularly with what Exxon has dug up. While the plaintiffs point to an admonition from November in which, according to The Wall Street Journal, “Moody’s Investors Service flagged environmental disruptions as a ‘growing negative credit factor’ for coastal municipalities and said it would adjust its ratings methodology to take climate change into account,” Exxon has just retaliated with its own court filing by exposing some damning hypocrisy. When it came to persuading their own investors, these municipalities kept their mouths shut and looked the other way. For example, the Journal notes:
> San Francisco’s lawsuit said it faced “imminent risk of catastrophic storm surge flooding,” while a general obligation bond offering last year said the city “is unable to predict whether sea-level or rise or other impacts of climate change … will occur.” Santa Cruz County said in its complaint it was experiencing more frequent and extreme droughts, precipitation events, heat waves and wildfires, and faced a 98% chance of a “devastating” three-foot flood by 2050. Yet a bond offering last year mentioned only “unpredictable climatic conditions, such as flood, droughts and destructive storms” as a risk factor.
How can these municipalities claim to be under imminent threat and expect oil companies to foot the bill when, in truth, they are lying to their own investors for the sake of business interests? Just another example of “Do as I say, not as I do.”
Meanwhile, the anti-oil-company bandwagon continues to grow. This week, New York City took legal action against the same oil companies. According to the lawsuit, “In this litigation, the City seeks to shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat.” Moreover, The Washington Post reports that “officials said they expect to divest up to $5 billion in investments from as many as 190 companies with fossil fuel ties, even as they promised to maintain their fiduciary duty to New York’s pensioners.”
It’s worth noting that analogous climate lawsuits against corporate entities have failed. And these should too. A New York Post editorial appropriately asks, “Why should the oil companies pay? They’re not actually burning the fuel — that’s the world’s utilities, motorists, etc.” Besides, it would be remarkably hypocritical to punish oil companies when their antagonists demonstrably engage in daily machinations.
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