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🛢️ California Blames Oil Industry While Increasing Taxes

Climate Litigation Activists Turn to Fearmongery

Good morning; here's what the Oilman has for you today:

  • California Slams Oil Industry with Price-Gouging Law

  • Climate Fear Factory Ramps Up

  • Tweet of the Day

California Slams Oil Industry with Price-Gouging Law

California just became the first state to approve a penalty regime for fuel retailers for price-gouging.

The new law, passed only a week after the bill was introduced at the state legislature, follows months of accusations and threats from the governor’s office to the oil industry.

How exactly is it going to work?

The idea is as simple as it is worrying. Responsibility for the penalization action will lay with the California Energy Commission.

It will make the decision based on information supplied by a new agency, which will collect information that oil companies will be obliged to disclose.

Think climate disclosures.

That information will help that agency monitor the fuel market and, if necessary, launch investigations into possible price-gouging.

“If we force folks to turn over this information, I actually don’t believe we’ll ever need a penalty because the fact that they have to tell us what’s going on will stop them from gouging our consumers.”

That’s what one member of the California legislature said in comments on the news.

That about sums it up, doesn’t it?

There is no carrot. There is only the stick.

California’s leaders have been tireless in their persecution of the oil industry.

From banning local extraction through the highest gasoline tax in the States to the price-gouging accusations, Governor Newsom and company have worked hard to squeeze oil companies.

Of course, the fact that this has led to higher imports of crude from places such as Saudi Arabia and Ecuador has been consistently overlooked in favor of yet more squeezing.

The pressure will no doubt continue until the state’s leadership runs out of ways to apply it.

How much of an oil industry will be left then and what prices Californians will be paying for gasoline remains to be seen.

Today's Edition is Brought to You By Energy Builders Podcast.

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Climate Fear Factory Ramps Up

More and more companies outside the oil and gas industry are warning about growing litigation risks related to their emissions footprint.

The trend suggests businesses are getting increasingly sensitive to the risk of lawsuits regardless of their area of activity.

The danger is real

“Climate change-related litigation and investigations have increased in recent years, and any claims or investigations against us could be costly to defend, and our business could be adversely affected by the outcome.

The above comes from Lockheed-Martin, which is among a small but growing group of companies that have started disclosing their climate litigation risks in financial reports.

It is a warning that Cenovus recently echoed: “[...] There can be no assurance that legal, societal, scientific and political developments will not increase the likelihood of successful climate change-related litigation against energy producers including us.”

Once the ball starts rolling...

For now, climate lawsuits are relatively few, but the number is growing. What’s more, potential plaintiffs are now targeting not just the companies themselves but their leadership individually.

The first case of its kind, naming the board of Shell as defendants, was recently filed in the UK. In it, the plaintiffs from ClientEarth accused the board of mismanaging climate risk and violating company law.

ClientEarth had the backing of several institutional Shell shareholders with more than $500 billion in AUM.

Meanwhile, in the U.S., lawsuits against oil companies just got a better chance of ending with wins after an appeals court ruled in favor of such suits being heard at state rather than federal courts.

All it could take is one such win for the tidal wave to really get going.

Wake up, Oil & Gas Industry. It's not paranoia if they really are out to get you.

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