California’s lawsuit against ExxonMobil, Shell, BP, ConocoPhillips and Chevron seen as ‘monster of a climate case’

Five oil majors – ExxonMobil, Shell, BP, ConocoPhillips, and Chevron – together with the American Petroleum Institute (API) are being sued in the U.S. state of California for their alleged role in downplaying the risks posed by fossil fuels, which led to tens of billions of dollars in damage. This lawsuit, which was welcomed by climate leaders and activists for aiming to hold Big Oil accountable for climate change, is perceived as a reckoning of sorts at a time when energy transition and net-zero efforts are getting a bigger foothold in the global energy game.

According to California’s Office of the Attorney General, its Attorney General, together with the California Governor, has filed a lawsuit in San Francisco County Superior Court against ExxonMobil, Shell, Chevron, ConocoPhillips, BP, and the American Petroleum Institute for allegedly engaging in “a decades-long campaign of deception and creating statewide climate change-related harms in California.”

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Rob Bonta, California Attorney General, commented: “Oil and gas companies have privately known the truth for decades — that the burning of fossil fuels leads to climate change — but have fed us lies and mistruths to further their record-breaking profits at the expense of our environment. Enough is enough. With our lawsuit, California becomes the largest geographic area and the largest economy to take these giant oil companies to court.

“From extreme heat to drought and water shortages, the climate crisis they have caused is undeniable. It is time they pay to abate the harm they have caused. We will meet the moment and fight tirelessly on behalf of all Californians, in particular those who live in environmental justice communities.”  

Furthermore, the complaint asserts that although the companies have known since at least the 1960s that the burning of fossil fuels would warm the planet and change the climate, they denied or downplayed climate change in public statements and marketing. As outlined in the complaint, California has spent tens of billions of dollars to adapt to climate change and address the damages caused so far, however, it will need to spend even more in the years to come.

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Therefore, Attorney General Bonta, on behalf of the people of California, is seeking nuisance abatement through the creation of a fund to finance climate mitigation and adaptation efforts; injunctive relief to both protect California’s natural resources from pollution, impairment, and destruction as well as to prevent the companies from making any further “false or misleading statements” about the contribution of fossil fuel combustion to climate change; damages; and penalties. 

Gavin Newsom, California Governor, remarked: “For more than 50 years, Big Oil has been lying to us — covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet. California taxpayers shouldn’t have to foot the bill for billions of dollars in damages — wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts parching our wells. With this lawsuit, California is taking action to hold big polluters accountable and deliver the justice our people deserve.”

Moreover, California’s Office of the Attorney General claims that the complaint contains “extensive evidence” demonstrating that the five oil majors and API have long known about the catastrophic results caused by the use of fossil fuels. In a bid to hammer this point home, it underlines that API and its members received a report from the Stanford Research Institute in 1968, which was hired to assess the state of research on environmental pollutants, including carbon dioxide. 

The report stated: “Significant temperature changes are almost certain to occur by the year 2000, and … there seems to be no doubt that the potential damage to our environment could be severe.” California’s Office of the Attorney General also highlights that an internal Exxon memo stated in 1978: “Present thinking holds that man has a time window of five to ten years before the need for hard decisions regarding changes in energy strategies might become critical.” 

In addition, Office of the Attorney General emphasizes that the defendants have “deceptively” portrayed themselves and their products as part of the climate solution. Shell, which claims online that it aims to become a net-zero emissions energy business by 2050 and that it is “tackling climate change,” is mentioned as an example. California’s Office of the Attorney General points out that Shell’s CEO told the BBC on July 6, 2023, that cutting oil and gas production would be “dangerous and irresponsible.”

Recently, Shell unveiled plans to spend around $40 billion on its Integrated Gas and Upstream businesses while investing $10-15 billion from 2023 to 2025 to support the development of low-carbon energy solutions, including biofuels, hydrogen, electric vehicle charging, and carbon capture and storage (CCS).

The UK oil major believes that LNG is set to play “an even bigger role” in the energy system of the future than it plays today. In light of this, the company also disclosed its intention to spend about $13 billion a year during this decade on oil and gas with a focus on LNG, which adds up to potentially over $100 billion in total by 2030.

The complaint against Big Oil alleges that all the players, by their “deceptions, acts, and omissions,” have created, contributed to, and assisted in creating “harmful” climate-related conditions throughout California while their “misconduct” has served to exacerbate the climate crisis in this state, leading to the pollution, impairment, and destruction of its natural resources.

Additionally, the complaint claims that all five oil majors and API made “misleading” statements concerning fossil fuels with the intent to induce members of the public to purchase and utilize fossil fuel products, thanks to environmental marketing claims that are “untruthful, deceptive, and/or misleading, whether explicitly or implicitly.”

The complaint also asserts that all five giant oil and gas players and API committed unlawful acts by – among other things – deceiving the public about climate change and affirmatively promoting the use of fossil fuels while knowing that this would lead to devastating consequences to the climate, including in California, thus, as a result of their failure to warn about the climate-related harms associated with the use of their products, the state has sustained “a plethora of injuries and damages,” including to state property, state infrastructure, and its natural resources.

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Aside from filing this lawsuit, Attorney General Bonta has supported states and municipalities that have filed their own complaints to hold major fossil fuel-producing companies accountable for – what is deemed to be – their campaign of deception that has worsened the climate crisis. In line with this, Attorney General Bonta filed amicus briefs in August and September 2021 supporting such efforts by the City of Honolulu and the County of Maui; the City of Baltimore; the state of Rhode Island; and the State of Minnesota.

On April 7, 2023, Bonta filed an amicus brief in the District of Columbia Court of Appeals in support of the District of Columbia’s efforts. Come May 12, 2023, he led a multistate coalition in filing an amicus brief in the Ninth Circuit Court of Appeals supporting the efforts by the City of Oakland as well as the City and County of San Francisco. 

After Governor Newsom and Attorney General Bonta announced that California was in the process of suing Big Oil for more than 50 years of deception, cover-up, and damage, climate activists across the country have shared their support.

David Weiskopf, Senior Policy Advisor, NextGen Policy, emphasized: “This is a big deal. The oil industry is the most profitable enterprise in human history, and their profits have come at the expense of every person and other living thing on our planet. For too long, governments have subsidized, rather than worked to limit the damage done by these multi-billion dollar corporations. Today, the state of California is standing up for the legal rights of its residents. 

“We thank the Attorney General and the Governor for bringing this lawsuit, and we hope that every state will follow suit. It is vital that all parts of our government work together to usher in an era of equitable clean transportation and that means aligning all public spending with our state’s climate goals and with the substance of this lawsuit. Oil companies have been harming the public for far too long – it is way past time to take every reasonable action to hold them accountable.” 

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Brandon Dawson, Sierra Club California Director, underlined: “Holding Big Oil accountable for their decades-long deception is necessary and crucial to protect California communities from the effects of the climate crisis. By bringing this lawsuit, Governor Newsom and Attorney General Bonta are cementing California as a leader in the fight against climate change and Sierra Club California applauds these efforts.”

In line with this, Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, sees California’s lawsuit as a “historic” one; Bill McKibben, environmentalist and founder of 350.org, believes this to be “a big big deal;” and Richard Wiles, President of the Center for Climate Integrity, perceived the lawsuit to be “the most significant, decisive, and powerful climate action directed against the oil and gas industry in U.S. history.”

Kathy Mulvey, accountability campaign director in the Climate and Energy Program, Union of Concerned Scientists, said: “California’s suit adds to the growing momentum to hold Big Oil accountable for its decades of deception, and secure access to justice for people and communities suffering from fossil-fueled extreme weather and slow onset disasters such as sea level rise.”

Another climate activist, Jane Fonda, who is also an actress and author, deems the lawsuit to be“a watershed moment to hold polluters accountable,” while Amy Westervelt, investigative journalist, labels this as “a freakin’ monster of a climate case.”

Jamie Court, President, Consumer Watchdog, underlined: “California is again leading the way in forcing oil companies to be accountable and pay for the substantial damage they have caused to the earth, taxpayers and consumers. Governor Newsom has led the nation in pioneering penalties for oil companies for their price gouging, and now he is working to make sure Californians are paid back for the devastation to our environment, health, and safety that oil companies have intentionally wrought.”

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Laura Deehan, State Director, Environment California, remarked: “Governor Newsom and AG Bonta are showing some guts by taking on the biggest oil companies. For decades, we have tried to alert the public to the threats of our growing dependence on fossil fuels. Meanwhile, as alleged in this lawsuit, the oil companies have downplayed or outright lied about, the risks of burning fossil fuels. Any company that lies about or obscures the public safety or environmental risks of their products should be held accountable.”

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Jamie Henn, Director, Fossil Free Media, underscored: “California just kicked open the door for every city and state in America to sue the fossil fuel industry for climate damages. After this summer of brutal heat waves and climate disasters, I think the public is hungry for a way to hold the fossil fuel industry accountable for the damage they’ve done. Big Oil knew, they lied, and now it’s time to make them pay.”

California’s lawsuit against Big Oil comes at a time when Earthjustice sued to keep 1 billion barrels of oil in the ground ahead of the U.S. government’s plans to auction off 67 million acres in the Gulf of Mexico to oil and gas companies for drilling. Lease Sale 261 could result in over 1 billion barrels of extracted oil, 4 trillion cubic feet of natural gas, and 370 million tons of greenhouse gas emissions. For Earthjustice, this lease sale, which is mandated by the Inflation Reduction Act (IRA), is “a climate and public health catastrophe.”

George Torgun, Earthjustice Senior Attorney, Oceans Program, stated: “The people who live on the Gulf Coast will continue to be subjected to poisonous fossil fuel contamination and higher rates of cancer and heart and lung diseases that have resulted from years of fossil fuel development in the Gulf. These communities are also on the front lines of rising sea levels and more intense hurricanes caused by global warming and face the ever-growing risks of devasting oil spills like the infamous Deepwater Horizon spill in 2010.”

During the previous lease sale, four oil majors being sued by California – Chevron, ExxonMobil, BP, and Shell – submitted the biggest chunk of high bids. These oil and gas giants are also expected to be the highest bidders in the incoming lease sale. As the previous five-year offshore leasing program expired with no new plan in place, several energy trade groups recently urged the Biden administration in a letter sent to President Joe Biden, to finalize a program that includes the maximum number of lease sales and begin the pre-leasing work required to start holding sales in 2024.

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In the wake of the U.S. Bureau of Ocean Energy Management’s final notice to hold Lease Sale 261 for acreage in the Gulf of Mexico in September 2023, API filed a motion for preliminary injunction in the U.S. District Court Western District of Louisiana, seeking immediate action from the court ahead of the planned lease sale as more than 6 million acres were removed from it.

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While efforts to put an end to fossil fuels development are certainly gaining ground, the oil and gas industry is still very much in the game and well-positioned to keep its spot in the future energy mix, especially natural gas, which is often seen as a bridge fuel to a carbon-free world. This does not mean that the U.S. is not working on enriching and accelerating its renewable energy market.

However, grid challenges on the supply and demand side need to be tackled, among other things, to fully reap the benefits of renewables. Despite the hurdles in green energy’s path, during one of Offshore Energy’s previous interviews, we came to the conclusion that the U.S. offshore wind sector was poised for growth.