New York Governor Kathy Hochul has enacted a law requiring fossil fuel companies to pay $75 billion over 25 years for their role in climate change. Similar legislation is being supported by New Jersey Senators John McKeon and Bob Smith. However, these initiatives face significant legal challenges regarding their constitutionality.
Recently, the U.S. Chamber of Commerce and the American Petroleum Institute filed a federal lawsuit against Vermont, the first state to pass a Climate Superfund law, despite lacking gubernatorial approval and not producing or refining fossil fuels.
Ray Cantor, Deputy Chief Government Affairs Officer at NJBIA, anticipates strong legal scrutiny of such laws. “There is so much to legitimately legally challenge with these laws or bills you almost don’t know where to start,” Cantor stated. He emphasized that while each state's situation may differ, the ultimate test of these laws' validity will occur in court.
In opposing New Jersey's bill S-3545, Cantor argued that it unfairly imposes retroactive liability on companies that were operating legally and supporting state and federal policies. “How do you retroactively penalize companies that were, and are, providing a legal product needed for both our survival and our prosperity,” he questioned.
Cantor also noted the lack of specific scientific evidence linking fossil fuel use to damages in New Jersey. He referenced an IPCC report suggesting no direct link between greenhouse gas emissions and extreme weather events like hurricanes and floods.
States like California, Massachusetts, and Maryland are closely monitoring Vermont's lawsuit as they consider similar bills. In Vermont's case, plaintiffs argue that the law is preempted by the Clean Air Act and violates constitutional protections by targeting out-of-state energy companies.
Meanwhile, New Jersey's bill S-3545 has advanced through the Senate Environment and Energy Committee. Cantor warned of potential economic repercussions: “The bottom line is there will be no shortage of ways to legally contest these state laws... this bill would further drive up the cost of everything.”
