California sues major oil companies, claiming they deceived on climate change for decades

California sued some of the world’s largest fossil fuel companies on Friday, alleging that they misled consumers for decades about their products’ role in contributing to climate change.

The lawsuit, filed in San Francisco Superior Court by Attorney General Rob Bonta, accuses five major oil companies of mounting a “disinformation campaign” beginning in the 1950s to conceal the harm of fossil fuels and delay the transition to a low-carbon future.

“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,” Gov. Gavin Newsom said in a statement ahead of his expected announcement on Sunday during a climate conference in New York. “Wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts parching our wells. California taxpayers shouldn’t have to foot the bill.”

The state has requested a judge order the oil companies to pay into a fund that California would use to finance future climate mitigation and adaptation efforts to protect against pollution and climate change-fueled events.

The targets of the suit are BP, ConocoPhillips, Chevron, ExxonMobil and Shell. The lawsuit also names American Petroleum Institute, an oil industry trade group.

Chevron criticized the lawsuit in a statement Saturday, saying in a statement that the case would have “no constructive or constitutionally permissible role” in changing energy policy.

“Climate change is a global problem that requires a coordinated international policy response, not piecemeal litigation for the benefit of lawyers and politicians,” the statement continued. The other companies could not be reached for comment.

A handful of states and dozens of municipalities across the country have filed similar actions against the energy industry in recent years, but California’s case is likely the most significant to date.

With nearly 40 million people, California is the nation’s most populous state but it’s also one of the top oil and gas producers. Californians regularly experience extreme weather events made more severe by climate change — ranging from wildfires and floods to rising sea levels, heat waves and, this year, the remnants of a hurricane months after the state endured torrential winter rains and snow.

The record storms and runoff from a remarkable Sierra snowpack caused widespread flooding in the Sacramento and San Joaquin valleys, ushering the reappearance of long-extinct Tulare Lake among other anomalies.

The 135-page complaint, first reported by the New York Times, details the tens of billions of dollars that California has already invested to address the issue, including in wildfire response and water infrastructure projects. The state anticipates that it will need to spend “multiples of that” in the years to come, according to the suit.

“From extreme heat to drought and water shortages, the climate crisis they have caused is undeniable,” Bonta said about the oil companies in a statement on Saturday. “It is time they pay to abate the harm they have caused.”

California lawsuit accuses oil companies of deception

The lawsuit alleges that oil executives understood decades ago that fossil fuels produce carbon dioxide and other greenhouse gas pollution that would cause “catastrophic” consequences.

Instead of warning the public, the industry discredited the scientific consensus on climate change and created doubt in the minds of consumers in order to delay the transition to cleaner energy, according to the suit.

Major studies, including by Harvard researchers published this year, found that oil companies such as ExxonMobil privately predicted global warming only to spend decades publicly tarnishing similar science in order to protect its business model and core products.

The lawsuit lists growing damages inflicted on Californians by climate change-induced heat waves and blames oil companies for exacerbating the state’s deadliest natural disasters, as well as water shortages, crop damage, coastal erosion and biodiversity loss.

“Their deception caused a delayed societal response to global warming,” the complaint reads. “And their misconduct has resulted in tremendous costs to people, property, and natural resources, which continue to unfold each day.”

Environmental advocacy groups celebrated the lawsuit as an example of strong climate leadership that could lend urgency to other similar cases.

“This lawsuit provides major momentum in the race to protect a livable planet,” said Kassie Siegel, senior counsel and director of the Center for Biological Diversity’s Climate Law Institute. “This case opens a new avenue for California to lead the nation in ending deadly fossil fuels.”

Kevin Slagle, spokesman for the Western States Petroleum Association, slammed the assertions made in the lawsuit as merely symbolic.

“The effective climate policy Californians deserve will not happen through meritless lawsuits and political stunts,” Slagle said. “Demonizing our industry is not climate leadership, it’s a tired play.”

The lawsuit is the latest step by Newsom to reinforce both his and the state’s reputation as leaders in confronting climate change.

The suit comes nearly a year after the governor announced plans to levy a windfall profits tax on oil companies for allegedly “price gouging Californians” at the gas pump. Newsom’s proposed tax never came to fruition. Instead, California lawmakers passed new data reporting requirements meant to increase transparency into oil company finances.

Challenges to reducing emissions persist

Under Newsom’s administration, California adopted a ban on the sale of new gas-powered vehicles by 2035 and a mandate to reach net zero greenhouse gas emissions by no later than 2045.

California lawmakers on Thursday sent two landmark climate bills to the governor’s desk that would shed light on the carbon footprint of the state’s largest corporations and provide insight into how those companies plan to address their climate-related risks.

Despite these progressive steps, California faces serious hurdles to achieving its near-term goal of reducing emissions across the economy to 48% below 1990 levels by 2030, acknowledged California Air Resources Board staff last month.

The state’s overarching climate plan relies heavily on largely unproven carbon capture technologies that are unlikely to be widely available soon. Without them, experts warn that energy prices could rise dangerously higher.

The statewide average for a gallon of regular unleaded fuel reached nearly $5.58 on Saturday morning, about a nickel higher than the same gas on Friday and up 14 cents from the same time a year ago. Fuel remains cheaper than the highest prices found in June 2022 when a gallon averaged about $6.34.

The companies named in the suit represent the five largest Anglo-American sellers of oil products in the world with a combined market capitalization of $1.25 trillion. In the last four quarters ending June 30, the companies earned a combined $220.8 billion in revenue.

By comparison, the companies’ value is equivalent to roughly one-third of California’s gross state product in 2022 of $3.5 trillion, according to the state Department of Finance.

Publicly traded shares in all five sank in aftermarket trading Friday and Saturday as the lawsuit came to light, most off by about 1%.

All of the firms are based outside of the state with the exception of San Ramon-based Chevron, which is the world’s third-largest oil producer with $317.61 billion in market cap, behind ExxonMobil ($467.17 billion) and Saudi Aramco, the kingdom-backed oil producer worth over $2.1 trillion.