ǿմý

Why oil companies are worried about climate lawsuits from gas states

By Lesley Clark | 11/07/2023 06:30 AM EST

In this photo made with a fisheye lens, on Thursday, March 12, 2020, work continues at a Seneca Resources shale gas well drilling site in St. Mary's, Pa.

A Seneca Resources shale gas well drilling site in St. Mary's, Pa., on March 12, 2020. Keith Srakocic/AP

Pennsylvania and Ohio — two major fossil fuel-producing states — are emerging as unlikely battlegrounds in local governments’ sprawling legal fight to put the oil and gas industry on the hook for the costs of climate change.

Research to estimate what local officials in the two states would spend to address planet-warming emissions, conducted by a group that supports climate litigation, has sparked interest from some lawmakers — and alarm from the oil industry and its allies.

“It would be like a cherry on top,” Richard Wiles, president of the Center for Climate Integrity, said of the possibility of a climate liability lawsuit in Ohio or Pennsylvania. “It would be great if we could get a case in a fossil fuel-producing state.”

Advertisement

Industry groups are assiduously tracking the center’s efforts, detailing every development on the website for Energy In Depth, a research and outreach campaign run by the Independent Petroleum Association of America. The group has accused the center of trotting out a familiar playbook in hopes of seeding climate lawsuits.

“Pennsylvania and Ohio are home to prolific natural gas and oil development that benefits the entire Appalachian region and country, and we have decades of experience developing these resources safely and responsibly,” IPAA CEO and President Jeff Eshelman said in a statement. “Wealthy, foreign interests that seek to halt this progress through costly litigation on the taxpayer’s dime — and with it, eliminate thousands of jobs that are powered by these essential resources — are misinformed, hypocritical, and doomed to fail.”

IPAA has accused the climate center of receiving $7 million from British investor Chris Hohn between 2018 and 2020. The center says the money was directed to its parent organization, the Institute For Governance & Sustainable Development, and that none of it was spent on litigation in the United States.

Wiles said the effort to calculate climate change expenses — from planting trees to increasing storm drainage capacity — for municipal governments is aimed at educating local officials, as well as talking to them about ways to pay those bills.

“It’s no secret that we go around and talk to elected officials about their damages and their options for recovering costs,” Wiles said. “One of the first questions is, ‘What are my damages?’ We’re trying to figure out if there is a systematic way to answer that question.”

Scrutiny of the center comes as an increasing number of local governments — most of them led by Democrats — have sued oil and gas majors for compensation, accusing them of misleading the public about the dangers of burning fossil fuels.

If the challenges are successful, courts could order oil companies to pay out billions of dollars.

Since June, local governments have filed two more suits, bringing the tally to eight states, nearly 40 cities and counties, as well as the District of Columbia and Puerto Rico. With limited exceptions, the cases have been filed in areas without significant fossil fuel footprints.

In Colorado, a top oil-producing state, the city of Boulder and two counties filed a climate liability suit in 2018. And California — which produces oil — became the biggest player in the nationwide legal battle when Democratic Gov. Gavin Newsom and Attorney General Rob Bonta filed a lawsuit in September.

Pennsylvania is second only to Texas in estimated natural gas reserves, according to the U.S. Energy Information Administration. And Ohio accounts for about 5 percent of U.S. natural gas production.

'Polluters should and must pay'

The push for more information in Pennsylvania began when the Center for Climate Integrity in July estimating that municipal governments in the Keystone State will need to spend at least $15 billion by 2040 — or nearly $1 billion a year — to protect residents from extreme heat, rising seas, and heavy rain and snow.

Two elected officials joined Wiles on a press call in July to tout the report and said the effects of climate change are already straining local budgets. They both echoed calls for litigation against the oil and gas industry, saying it was unfair to further burden taxpayers.

“Here in Sharpsburg, we’re doing so much to be part of the solution for problems that are so much bigger than we are,” said Brittany Reno, mayor of Sharpsburg, a Pittsburgh suburb. “The polluters that got us into this mess and hid the fact that they were having this impact are not doing their fair share.”

Monica Taylor, who chairs the Delaware County Council outside Philadelphia, called the numbers in the report a “wake-up call” that Pennsylvania municipalities need to take action.

“I agree that it’s not fair for this burden of addressing climate change to fall only on our residents,” Taylor said. “Polluters should and must pay.”

Neither Reno nor Taylor returned requests for comment for this story. Other lawmakers in Pennsylvania have embraced the possibility of a climate liability lawsuit in their state.

State Rep. Christopher Rabb, a progressive Democrat who represents a Philadelphia district, wrote on his website that the Legislature doesn’t have $15 billion tucked away to respond to climate effects.

“In a just world," he wrote, "those who caused the problem should pay for the damages.”

'Extreme and shortsighted'

Though Wiles said he is having conversations with officials across Pennsylvania, no lawsuits have been proposed.

Still, the Pennsylvania Manufacturers' Association says it’s prepared to “scrap” with anyone who decides to pursue litigation against the oil industry.

“This is talk on the part of some truly extreme and shortsighted individuals,” said David N. Taylor, the association’s president and CEO. “Maybe it will come to pass, maybe it won’t, but certainly vigilance is our watchword.”

Taylor said the lawsuits are “completely flawed” because they target a necessary resource.

“Anybody who’s more mature than a small child understands the concept of trade-offs: To get one thing, you give up another,” said Taylor, adding that the “entire modern civilization” is dependent on oil and gas.

“For people who are blaming fossil fuels, lead the way," he said. "Show us how to live without them."

Taylor also suggested a lawsuit led by Pennsylvania — where many Democrats are members of energy sector unions — would be a tough lift.

He noted former Democratic Gov. Tom Wolf sought to bring the state into a in 2019, but the effort was opposed by a Republican-dominated General Assembly — and “all of the hard-hat Democrats.”

Ohio and beyond

Wiles said that although the Center for Climate Integrity initially suspected there could be some interest in a climate lawsuit in Ohio, the group now believes that’s unlikely. Republicans control the governor’s office, as well as both legislative chambers.

The center worked with local energy and environmental groups to release , estimating that municipalities in the Buckeye State would need to increase spending by $1.8 billion to $5.9 billion per year by midcentury to adapt to climate change.

The report noted that beyond raising taxes, policymakers could look at “holding accountable the corporations most responsible for causing and exacerbating climate change.”

Democratic Ohio Sen. Sherrod Brown cited the report at an August 2022 hearing of the Senate Banking, Housing and Urban Affairs Committee, but there was no mention of potential lawsuits.

Still, Wiles said the reports in Ohio and Pennsylvania will aid future efforts as the center tries to hone its analytics to quantify the costs of climate change for local governments. That information could be used to support climate liability lawsuits if they make it to trial, he said.

The center issued a report in 2019 on the costs for communities across the United States to adapt to sea-level rise, followed by a 2021 report that looked at the cost to cool schools. Ohio was the first state to be studied, but Wiles said Pennsylvania followed because the center was looking for a non-coastal state — and one where filing a potential climate liability lawsuit was not impossible.

“We’re not oblivious to the fact that it’s a major natural gas-, fossil fuel-producing state,” Wiles said of Pennsylvania. “But it’s a purple state, a state that hasn’t lost its mind completely.”

He added that some states, such as Texas, would likely be out of bounds for climate litigation outreach because it could trigger a backlash among state lawmakers. In a rebuke to Wall Street’s focus on environmental and other risks, Texas Republicans passed a law in 2021 that allows the state to restrict contracts with any financial firm it believes “boycotts” the fossil fuel sector.

“You look at the politics of any state,” Wiles said, adding that Texas lawmakers could react to the center's work by saying, “You’re going to sue oil companies? Nobody’s suing anyone ever again.”