Should Oil, Gas Co.’s Be Accountable For Climate Change-related Disasters?

In a bid to what he says will lower property insurance costs, a California lawmaker has filed a bill to make oil and gas companies accountable for climate change-related natural disasters. Called the Affordable Insurance and Climate Recovery Act, the law, if enacted, would allow victims of natural disasters to sue fossil fuel companies for damages.

Like efforts to make weapons manufacturers liable for gun-related crimes, or tobacco companies responsible for smoking-related illnesses, the bill claims that oil and gas corporations have long been aware of the environmental risks associated with their products and have misled the public about these dangers.

The increasing frequency and severity of climate disasters has sent insurance prices skyrocketing across California and has pushed many families into the state’s insurer of last resort, the FAIR Plan. From 2018-2022, California had the largest number of average acres burned annually and the most residences destroyed due to wildfires of any state within the United States. The preliminary assessment of damages from the Palisades fire is over $250 billion.

'A devastating price' for the climate crisis

“Californians are paying a devastating price for the climate crisis, as escalating disasters destroy entire communities and drive insurance costs through the roof,” said the bill’s sponsor Sen. Scott Wiener. “Containing these costs is critical to our recovery and to the future of our state. By forcing the fossil fuel companies driving the climate crisis to pay their fair share, we can help stabilize our insurance market and make the victims of climate disasters whole.”

California would be the first state to implement such measures targeting climate change-related disasters, and the proposal has garnered support from various environmental and consumer protection groups but is expected to face strong industry opposition.

“Telling my son his school burned down during the fires was one of the hardest things I ever had to do,” said Amanda McPhillips, a single mother of two and a member of Extreme Weather Survivors, who evacuated from her home during the LA fires. “Dozens of families and friends in our community are facing heartbreaking challenges – rebuilding homes, finding space for schools, cleaning and smoke remediation, navigating it all is beyond overwhelming – and the escalating expense of it all makes it even more daunting. [This bill] means the cost is not only on us, it’s also on the companies who help cause these disasters.”

Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association accused Weiner of making fossil fuel companies a political scapegoat in the wake of the California fires.

“It is a shame that [he sees] the Los Angeles fires as nothing more than a political opportunity,” she said. “We need real solutions to help victims in the wake of this tragedy, not theatrics.”
Reheis-Boyd noted that consumers rely on and choose to use gas-powered vehicles and purchases products made with fossil fuels.

“Our economy depends on oil and gas even as California looks to reduce its carbon footprint,” she said. “The vulnerabilities in the existing oil and gas infrastructure must be addressed. Otherwise, technical realities will get in the way of aspirational goals, if left ignored.”

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