Governor Kathy Hochul faces a pivotal choice regarding a controversial bill that could impose remarkable financial penalties on oil, natural gas, and coal companies, demanding billions of dollars in compensation for their contributions to climate change. Dubbed the Climate Change Superfund, this initiative is intended to function similarly to the federal Superfund program, which has historically sought to hold polluters accountable for hazardous waste sites.
Proponents of the bill argue that it would generate substantial revenue, drawing parallels to the federal program’s efforts. Conversely, detractors argue that New York’s version, which was approved by both the Assembly and Senate earlier this spring, is flawed, likely to impose higher costs on consumers, and could be entangled in prolonged legal disputes if it becomes law.
Climate Change Superfund bill could demand $75 billion from oil and gas giants; Hochul still reviewing
An analysis conducted for bill sponsors, state Senator Liz Krueger and Assemblyman Jeffrey Dinowitz, reveals that both foreign and domestic corporations could be liable for about $3 billion annually, accumulating to $75 billion over a span of 25 years.
Saudi Aramco, the prominent oil company from Saudi Arabia, might face the largest annual fee of $640 million due to its extensive greenhouse gas emissions. Meanwhile, the Mexican state oil firm Pemex could be assessed $193 million, and Russia’s Lukoil might encounter a $100 million annual fee.
The list of 38 targeted companies includes major international and American oil and gas firms such as Exxon, Chevron, Shell, BP, Total Energies, Petrobras, BHP, Glencore, Equinor, and ENI.
Governor Hochul has yet to make a decision on the bill, with her office indicating that she is still reviewing it. John Howard, a former state Public Service Commission Chairman, expressed skepticism about the practicality of enforcing fees from foreign-owned companies, questioning how payments from entities like Saudi Aramco and Lukoil would be collected.
Critics, including New Yorkers for Affordable Energy Executive Director Daniel Ortega, claim the bill is unconstitutional and could dissuade businesses from operating in New York. Ortega warned that such legislation could create an unwelcoming environment for businesses, potentially prompting them to withdraw from the state.
The proposed fund would be used for various climate-related projects, including restoring coastal wetlands, enhancing stormwater drainage systems, installing energy-efficient cooling systems, and constructing sea walls to address severe weather conditions.
Krueger and Dinowitz estimate that the cost of climate adaptation through 2050 will far exceed the $75 billion targeted from the fossil fuel industry. They argue that foreign companies with operations in the U.S. will be subject to state regulations and courts, and anticipate that other states may follow suit with similar initiatives.
