Hochul signs bill that will charge energy firms $75B, but critics say customers will really foot the tab

Today New York Governor Kathy Hochul signed into law the Superfund climate change bill, which will bill oil and gas companies an estimated $75 billion over the next 25 years. The controversial measure, sponsored by Sen. Liz Krueger and Assemblyman Jeffrey Dinowitz, is modeled after federal and state Superfund laws, which charge companies accused of pollution.

While environmental groups heralded the bill, business groups argued that it would increase the cost of doing business in the state and that consumers would ultimately bear the brunt in terms of higher energy prices.

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“The Climate Change Superfund Act is now law,” he said Senator Krueger. “Over the past decade, courts have too often dismissed lawsuits against the oil and gas industry, saying climate blame should be decided by legislatures. Well, the New York State Legislature—the 10th largest economy in the world—has accepted the call, and I hope that We’ve been clear: the biggest climate polluters on the planet bear sole responsibility for creating the climate crisis and must pay their fair share to help regular New Yorkers deal with the consequences.”

However, critics consider the bill impractical and claim it will be subject to protracted legal challenges.

“What would you want from them? Not to sell fuel in New York state,” said Ken Pokalsky, vice president of the New York State Business Council.

A group of business and industry leaders also condemned the measure: “This bill is bad public policy that raises significant enforcement and constitutional issues. Moreover, its $75 billion price tag will result in unintended consequences and increased costs for households and businesses.”

However, Governor Hochul heralded the legislation as a victory for the citizens of the state, stating that the funds will be used for climate change mitigation efforts.

“This bill would allow the state to recover $75 billion from major polluters…For too long, New Yorkers have borne the cost of the climate crisis, which affects every part of the state.”

The bill will result in significant assessments for domestic and foreign energy producers, including Saudi Aramco Saudi Arabia will likely face the highest cost of $640 million a year, while Mexico’s state-owned company Pemex will be looking at an annual cost of $193 million.

Russia’s Lukoil is likely to face charges of around $100 million a year.

Estimates are based on estimated annual CO2 emissions, measured in millions of tons of greenhouse gases.

A total of 38 companies considered carbon polluters will be targeted, including US oil giants Exxon and Chevron, Britain’s Shell and BP, and Brazil’s Petrobras.

Critics of the bill also noted potential difficulties in collecting the required assessments from foreign companies.

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The bill also concerns consumer advocacy groups in light of its implementation combined with other new measures that will greatly affect travelers and consumers:

“We also note that this measure will come after the reestablishment of congestion pricing in New York City, and before the Department of Environmental Protection’s pending ‘cap and invest’ rule, which together will also impose billions of dollars in new assessments of fossil fuel fuel consumption, affecting a wide range of the consumer,” said opponents of the law.