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Today New York Governor Kathy Hochul signed the Climate Change Superfund Act, which will bill oil and gas companies an estimated $75 billion over the next 25 years. The controversial measure, sponsored by Sen. Liz Krueger and Assemblymember Jeffrey Dinowitz, is modeled on federal and state superfund laws that impose burdens on companies accused of polluting the environment.
While environmental groups supported the legislation, business groups argued that it would increase the cost of doing business in the state and that consumers would ultimately bear the brunt of higher energy prices.
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New York Governor Kathy Hochul (Lev Radin/Pacific Press/LightRocket via Getty Images)
“The Climate Change Superfund Act is now law,” he said Sen. Krueger. “Too often in the last decade, courts have dismissed lawsuits against the oil and gas industry on the grounds that the issue of climate debt should be decided by lawmakers. Well, the legislature of New York State – the tenth largest economy in the world – has accepted the invitation, and I hope we have made it very clear: the planet’s biggest polluters bear a unique responsibility for creating the climate crisis, and they must pay their fair share to help ordinary New Yorkers cope with the consequences.”
But critics say the bill is impractical and claim it will be subject to lengthy legal challenges.
“What should they do? Do not sell fuel in New York State,” said Ken Pokalsky, vice president of the New York State Business Council.
New York State Senator Liz Krueger, D-Manhattan. (Getty)
A group of business and industry leaders also criticized the measure: “This legislation represents poor public policy that raises significant implementation questions and constitutional concerns. Additionally, its $75 billion price tag will create unintended consequences and increased costs for households and businesses.”
However, Gov. Hochul called the legislation a victory for the state’s citizens and said the funds would be used for climate change efforts.
“This bill would allow the state to recoup $75 billion from major polluters…For too long, New Yorkers have borne the costs of the climate crisis that affects every part of the state.”
The bill will impose significant burdens on both domestic and foreign energy producers, including Saudi Aramco Saudi Arabia The largest burden is expected to be $640 million per year, while Mexico’s state-owned company Pemex faces an annual burden of $193 million.
The Russian Lukoil is expected to be threatened with around 100 million US dollars per year.
Ratings are based on estimated annual CO2 emissions, measured in millions of tons of greenhouse gases.
In total, 38 companies considered carbon polluters will be on the hook, including American oil giants Exxon and Chevron, Britain’s Shell and BP, and Brazil’s Petrobras.
Critics of the legislation also pointed to the potential difficulty of obtaining required reports from foreign companies.
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The bill is also of concern to consumer groups as it is being implemented in conjunction with other new measures that will have a significant impact on commuters and consumers:
“We also note that this action would follow the reinstatement of congestion pricing in New York City and ahead of the Department of Environmental Protection’s upcoming cap and invest rule, which also collectively entails billions of dollars in new fossil fuel assessments would bring fuel economy, which affects a large number of consumers,” said the opponents of the bill.
