Governor Kathy Hochul will soon have to decide whether to approve a controversial bill that would force oil, natural gas and coal companies to pay the state billions for their contributions to climate change.
Supporters compare the plan – the proposed Climate Change Superfund – to the federal Superfund program, which has tried for decades to hold polluters accountable for abandoned toxic waste sites.
But critics say New York’s version of climate change legislation – which passed both the House and Senate in the spring – is impractical, would only add costs to customers in the long run and, if passed, would attract years of litigation.
An analysis conducted for the bill’s sponsors, Senator Liz Krueger (D-Manhattan) and Representative Jeffrey Dinowitz (D-Bronx), and obtained by The Washington Post, shows that foreign and American companies combined would pay about $3 billion a year under the plan – or $75 billion over 25 years.
Saudi Arabian oil giant Saudi Aramco faces the highest annual tax bill of any company – $640 million a year – for emitting 31,269 million tonnes of greenhouse gases between 2000 and 2020.
Aramco – formerly known as Saudi Arabian Oil Co. – is owned by the Saudi royal family.
The Mexican state-owned oil company Petróleos Mexicanos (Pemex) emitted 9,512 tons of CO2 and could face a fine of $193 million for generating 9,512 million tons of greenhouse gases.
The Russian oil company Lukoil could be fined $100 million annually for emitting 4,912 million tons of CO2.
The 38 companies identified as CO2 polluters include American oil giants such as Exxon and Chevron, as well as Shell and BP in the UK, Total Energies IES in France, Petrobras in Brazil, BHP in Australia, Glencore in Switzerland, Equinor in Norway and ENI in Italy.
Hochul has not yet said whether she will sign the bill. A spokesperson told The Washington Post that the governor is still reviewing the bill.
The bill is well-intentioned and attempts to raise funds to prepare New York for climate change, said former chairman of the state Public Service Commission John Howard.
However, he doubted that government agencies would be able to collect fees from foreign-owned companies or those based in other countries.
“What is the mechanism to collect the debts from Saudi Aramco and Lukoil? What will the Crown Prince (Mohammed bin Salman of Saudi Arabia) say? Will the foreign companies pay?” Howard asked. “I don’t see any mechanism for them to pay.”
He said the companies that produce carbon-based fuels would try to pass on any costs to customers at the pump anyway.
Daniel Ortega, executive director of New Yorkers for Affordable Energy, added in a statement: “This bill is unconstitutional and will surely be challenged in court.”
“This bill sends a terrible message to all businesses that legally sell goods in New York State,” Ortega wrote. “For businesses, it means they can follow all the rules and regulations, collect and pay all the taxes, and then be penalized by the legislature after the fact.”
“Who in their right mind would want to continue doing business in such a state?”
The funds raised under the proposed program would be used for new or improved infrastructure, such as restoring coastal wetlands, upgrading stormwater drainage systems, energy-efficient cooling systems in public and private buildings, including schools and public housing, and managing extreme weather conditions by building seawalls.
“The cost of investments in climate change adaptation will easily reach several hundred billion dollars for the state by 2050, based on a range of estimates for projects affecting various regions of the state. That is far more than the $75 billion attributed to the fossil fuel industry,” Krueger and Dinowitz explain in the bill.
According to Krueger, there should be no problem imposing greenhouse gas emissions taxes on foreign companies because “they all have U.S.-based operations that must follow our laws and jurisdictions.”
Dinowitz agreed, saying, “There is no reason to believe that we cannot do this.
“I expect other countries to follow this example,” said the politician.
Vermont was the first state in the U.S. to pass a Climate Change Superfund Act, which took effect on July 1.
