Local US authorities seek compensation for costs ranging from sea wall upgrades to retrofitting storm drains
June 9, 2019
Fossil fuel companies are already grappling with the risks posed by climate change, from the physical threats of extreme weather to the challenge of switching to cleaner energy. Now they have a new item rising up their list of worries: liability lawsuits.
Over the past two years, a growing number of legal cases in the US — brought by cities, counties, and the State of Rhode Island — are seeking damages from energy companies for a litany of climate-related problems.
Baltimore wants compensation for the cost of retrofitting storm drains to prepare for worsening storms. In San Francisco, the city says it will cost $5bn to upgrade the city’s sea wall to prepare for higher sea levels. Meanwhile, Rhode Island expects coastal properties worth $3.6bn to be under threat by the end of the century.
Taken together, these lawsuits amount to a legal onslaught that climate activists hope will have a profound financial impact on oil and gas producers, by imposing huge penalties. The example they draw on is the years of litigation against tobacco companies that culminated in a settlement guaranteeing $206bn in payments to 46 US states over the first 25 years.
Sheldon Whitehouse, a democratic Senator from Rhode Island known for his climate activism, said the threat of litigation is a major worry for oil companies at the moment. “They are frightened at the prospect of liability at what they have done, and they are scared of courts.”
He said the comparison with the tobacco lawsuits is apt. “If you . . . pop out the word tobacco, and put in the word fossil fuels; pop out the word health, and put in environmental harms. The complaint writes itself,” he said.
One crucial difference, however, is that the climate cases are not yet on the scale of the tobacco litigation — none of the lawsuits have succeeded yet, and several have been thrown out.
At present there are more than a dozen climate liability cases under way in the US: 10 brought by counties, four brought by major cities (New York City, San Francisco, Oakland, Baltimore) and one by a state (Rhode Island). The next cities to file climate-related lawsuits are likely be Honolulu, and Washington, DC, which has already put out a call for lawyers.
However the energy companies, and the lobby groups that represent them, are sceptical that these cases have merit.
“There has been a long history of this litigation that has not been successful, and for good reason,” said Phil Goldberg, special counsel at the National Association of Manufacturers, a lobby group in DC whose members include fossil fuel companies.
“The fundamental flaw with these lawsuits is that the companies didn’t do anything wrong . . . they are selling a useful product,” Mr Goldberg added. “The whole thing is just a red herring.”
But he stops short of dismissing the lawsuits altogether. “Anytime you are sued, you take it seriously,” he said. The growing number of cases has prompted the association to set up a new wing — the Manufacturers’ Accountability Project — to address them.
At the same time, some energy companies, including Shell and BP, have poured millions of dollars into lobbying for a new carbon tax bill that would also include a liability waiver for fossil fuel products sold in the past, which would make most of these lawsuits vanish.
Cycle Industry News)
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