Governor Kathy Hawkle Decide now Whether to approve a controversial bill that would force oil, natural gas and coal companies to pay billions of dollars to the state for contributing to climate change.
Supporters liken the plan — a proposed Climate Change Superfund — to the federal Superfund program that has sought to hold polluters accountable for toxic waste sites that have been abandoned for decades.
But critics argue that New York’s climate change plan — passed by both the House and Senate in the spring — is unworkable, would only burden customers in the long run, and would be challenged in court for years if approved.
Under the plan, foreign and U.S. companies would pay a combined total of about $3 billion a year, or $75 billion over 25 years, according to an analysis conducted on behalf of the bill’s sponsors, State Sen. Liz Krueger (D-Manhattan) and Assemblyman Jeffrey Dinowitz (D-Bronx) and obtained by The Washington Post.
Saudi Arabia’s oil giant Saudi Aramco could face annual fines of $640 million, the largest of any company, for emitting 31.269 billion tonnes of greenhouse gases between 2000 and 2020.
Aramco, officially known as the Saudi Arabian Oil Company, is owned by the Saudi Arabian royal family.
Mexico’s state-run oil company Petróleos Mexicanos (Pemex) could face a $193 million fine for emitting 9,512 tonnes of carbon dioxide and contributing 9.512 billion tonnes of greenhouse gases.
Russia’s Lukoil could face fines of $100 million per year for emitting 4.912 billion tonnes of carbon dioxide.
The 38 companies identified as carbon polluters include US oil giants such as Exxon and Chevron, as well as Britain’s Shell and BP, France’s Total Energies IES, Brazil’s Petrobras, Australia’s BHP, Switzerland’s Glencore, Norway’s Equinor and Italy’s ENI.
Governor Hawke has not yet said whether he will sign the bill into law, but a representative told The Washington Post that the governor is still reviewing the bill.
The bill is well-intentioned in that it seeks to get money for New York state to prepare for climate change, said John Howard, a former chairman of the state Public Utilities Commission.
But he questioned whether government officials could collect fees from foreign-owned companies or those headquartered in other countries.
“What is the mechanism for recovery from Saudi Aramco and Lukoil? The Crown Prince [Mohammed bin Salman of Saudi Arabia] “What do you mean? Are foreign companies going to pay?” Howard asked. “I don’t see a mechanism for them to pay.”
He said that either way, carbon fuel companies would likely try to pass on the costs to gas station customers.
Daniel Ortega, executive director of the group Affordable Energy New York, added in a statement that “this bill is unconstitutional and will certainly be challenged legally.”
“This bill sends a terrifying signal to businesses selling legal products anywhere in New York State,” Ortega wrote. “For businesses, this bill means that the Legislature could impose fines after the fact, after they have followed every rule and regulation and collected and paid every tax.”
“Would any sane person want to continue doing business under those conditions?”
Funds raised under the proposed program would be used for new or upgraded infrastructure needs, such as coastal wetlands restoration, upgrading storm drainage systems, energy-efficient cooling systems for public and private buildings, including schools and public housing, and building seawalls to combat severe weather conditions.
“Based on a range of estimates for projects that will affect different parts of the state, the cost to the state of climate adaptation investments through 2050 could easily reach hundreds of billions of dollars, far exceeding the $75 billion levied on the fossil fuel industry,” Krueger and Dinowitz wrote in the bill.
Krueger said there should be no problem collecting greenhouse gas fees from foreign companies, saying: “They all have U.S.-based divisions and will be subject to U.S. laws and courts.”
Dinowitz agreed, saying there’s “no reason to think it can’t be done.”
“We hope other states will follow suit,” the politician said.
Vermont was the first state in the U.S. to pass a climate change Superfund law, which went into effect on July 1.
