Oil companies seek Trump’s help to thwart climate lawsuits, superfund laws

The fossil-fuel industry wants to avoid the financial penalties tobacco companies faced

US President Donald Trump has signaled he would consider ways his administration could help the oil-and-gas industry. Photo: Annabelle Gordon / AFP

Now that a pro-fossil-fuel president is in the White House, the oil industry is pushing to make some of its biggest legal headaches go away.

Oil-and-gas executives raised their concerns about recent state laws that will fine them for contributing to greenhouse-gas emissions, at a White House meeting Wednesday with President Trump. They also discussed the dozens of climate lawsuits filed by state and local governments against Exxon Mobil, Chevron, Shell and others, according to people familiar with the matter.

Trump appeared to agree with the industry that the states’ actions had the potential to undermine his energy-dominance agenda and signalled he would consider ways his administration could help the industry, the people said. The chief executives of Exxon, Chevron, ConocoPhillips and Hess were among those in attendance at the meeting.

Fossil-fuel interests contributed tens of millions of dollars to help Trump get elected, hoping he would help the industry lock in demand for their products for years to come. While frackers have been unnerved by his first weeks in office, Trump has started making good on their demands to undo environmental regulations, open up more US land for drilling, and help them export more natural gas.

Now, the industry hopes to put its legal woes on Trump’s radar as it faces mounting threats.

The industry is making a case for the Justice Department to file briefs in support of its lawsuits, or file its own suits against Vermont and New York. Last year those states passed climate superfund laws designed to collect fees from fuel-burning oil companies to help cover costs for environmental projects and infrastructure.

The industry thinks the Justice Department might have grounds to sue states it sees as encroaching on federal policy territory. Photo: Eddie Seal/Bloomberg

The industry thinks the Justice Department might have grounds to file suits against states it sees as encroaching on the territory of the US government on climate policy.

Separately, oil-and-gas lobbyists are urging members of Congress to consider granting legal protection for oil companies against lawsuits over their contributions to climate change.

The fossil-fuel industry has learned from the mammoth lawsuits that clobbered tobacco companies and wants to avoid the same fate. Executives are seeking a predictable environment to navigate, and think that now is the time to push back against claims, people familiar with the lobbying push said.

Oil-and-gas companies are facing a deluge of climate actions emanating from state and local governments.

The superfund law passed in New York last year authorises the state to levy billions of dollars in fines on fossil-fuel companies for their contribution to greenhouse-gas emissions. The bill charges fossil-fuel companies a total of $3 billion a year for 25 years, which the state plans to use to pay for climate change adaptation efforts.

Exxon, Shell, Petróleos Mexicanos, BP, Chevron and Peabody Energy could each owe upward of $150 million annually, according to a memo co-written by New York Sen. Liz Krueger, a co-sponsor of the bill.

California lawmakers introduced a superfund bill last month, saying oil companies should help pay for extensive damages from the Los Angeles wildfires. Vermont passed the first such law in the US but has since inspired lawmakers in states including Massachusetts to set up similar funds.

A person fishes with offshore oil and gas platform Esther in the distance in Seal Beach, California. Photo: Mario Tama/Getty Images/AFP

Opponents have argued states don’t have the authority to regulate emissions, companies shouldn’t be charged retroactively for emissions that were legal at the time, and it is unfair to focus solely on fossil-fuel companies and not energy consumers. More than a dozen states, including West Virginia and Texas, and oil-and-gas associations have challenged the New York law in court.

“We will continue to make that case in the courts, and we are exploring all options to correct this overreach by certain states,” said Justin Prendergast, a spokesman for an oil lobbying group, the American Petroleum Institute.

Heightened interest in climate superfund legislation is driven in part by the slow progress of lawsuits brought by states and cities seeking compensation from fossil-fuel companies, according to legal scholars.

The lawsuits, some of which date to 2017, seek financial damages based on claims that range from public nuisance and negligence to consumer deception and racketeering.

Several states, including Delaware, Massachusetts, New Jersey and Rhode Island, and dozens of municipal governments have accused the world’s largest energy companies of playing down the industry’s contributions to climate change.

The Supreme Court in 2023 turned away appeals by the companies seeking protection from potential liability under state laws for harms caused by climate change. The decision allowed a number of cases to move forward under state laws that the industry sees as less favourable than federal environmental statutes.

Trump can’t do much about the climate lawsuits without help from Congress. In his first term, the Justice Department expressed its views about the climate litigation in briefs. The oil industry is hoping lawmakers include legal protection against climate lawsuits for oil companies in a coming Trump-endorsed bill.

Congress passed legislation two decades ago that granted gun manufacturers some legal protection against lawsuits. But with slim Republican majorities in Congress, such legal protections for oil companies could be difficult to obtain.

Oil companies say the myriad lawsuits have made doing business in the US more difficult to navigate. Last year, California’s attorney general filed a lawsuit — the first suit of its kind — against Exxon accusing the company of misleading consumers about the recyclability of plastic products and polluting the state.

Exxon filed a defamation lawsuit against California attorney general Rob Bonta and environmental groups, saying their “false statements” had led to prospective business falling through.

The Wall Street Journal