Hochul approves plan to bill polluters billions for climate costs

ALBANY — Gov. Kathy Hochul on Thursday approved the legislature’s bill to require the world's biggest oil and gas companies to pay $75 billion for repairs from superstorms and other remediation forced by climate change.

Supporters have lauded the bill as an ambitious effort to protect taxpayers from the potentially disastrous costs of environmental damage. But they also expect the big energy producers to fight it in court.

"New York has fired a shot that will be heard 'round the world: The companies most responsible for the climate crisis will be held accountable," said state Sen. Liz Krueger (D-Manhattan), a sponsor of the bill.

"Repairing from and preparing for extreme weather caused by climate change will cost more than half a trillion dollars statewide by 2050," Krueger said. "The Climate Change Superfund Act is a critical piece of affordability legislation that will deliver billions of dollars every year to ease the burden on regular New Yorkers."

The bill states that science can now effectively link the production of greenhouse gases from pollution with its sources. That would be the basis of assessing fees on corporations of $75 billion over 25 years to cover a substantial part of climate change costs projected for the state. The biggest energy companies would pay about $3 billion a year to the state, according to state officials.

Hochul said the law "will put the responsibility on polluting entities to pay for the damages they have knowingly caused, so that everyday New Yorkers are not left with the bill."

Justin Wilcox of the Upstate United business group, which includes former Lt. Gov. Robert Duffy as a board member, blasted the measure.

"Gov. Hochul’s decision to sign the Climate Change Superfund Act law is a misguided move that does a disservice to all New Yorkers, who already pay enough to fund the shortsighted measures linked to [the state climate change law]," Wilcox said.

The plan is patterned after state and federal Superfund laws that have for decades forced companies to clean land and waterways they polluted. State officials have estimated that climate change will require up to $100 billion to protect Long Island alone from storms and rising sea levels. Another $55 billion would be needed for climate change work in the rest of the state, under the estimate.

Assemb. Jeffrey Dinowitz (D-Bronx) called the bill he co-sponsored "a groundbreaking victory for accountability, fairness and environmental justice."

"We refuse to let the entire burden of climate change fall on the backs of our taxpayers while Big Oil reaps record profits at the expense of our future," Dinowitz said.

Supporters of the approach cite economic studies that show corporations won’t be able to pass along the cost to customers. Supporters say the fees would have to be treated as past activity and be considered a one-time payment for accounting purposes, rather than a new cost that could be passed to consumers.

In addition, sponsors of the measure said energy companies won't be able to retaliate against New York because of federal antitrust laws and because of competitive pressure in the energy markets.

Resistance from business

Business groups had lobbied aggressively against the measure.

"This legislation, while aimed to address climate change, fails to consider the practical realities faced by residents across the state," Wilcox said. "This ill-advised decision is guaranteed to be quickly met with a host of lawsuits and legal challenges, further burdening New York taxpayers with the responsibility to foot the bill."

There was no immediate comment from New Yorkers for Affordable Energy, a lobbying group opposed to the measure and headed by former energy company executives with a goal of expanding use of fossil fuels. The group’s leader, Daniel Ortega, has said the measure is unconstitutional and unworkable in part because many of the fossil fuel producers are based in other countries.

Vermont is already facing court challenges to a similar law, which it adopted in May. Vermont Gov. Phil Scott, a Republican, has said he expects a costly fight from big energy companies that have produced fossil fuels from which emissions have contributed greatly to climate change.

Fierce lobbying

Back in New York, environmental groups that mounted grassroots lobbying campaigns for the bill praised the action, once thought to be impossible to pass into law.

"Until [Hochul's] approval, New York taxpayers were 100% on the financial hook for climate costs," said Blair Horner of the New York Public Interest Research Group. "Now Big Oil will pay for much of the damages that they helped cause. As a result, New Yorkers will have their future tax burden reduced by $3 billion annually."

Hochul and legislative leaders agreed to some changes in the bill, which passed in June. Hochul said the state Department of Environmental Conservation will have more time to develop the Superfund program. The final version also provides for greater transparency in allocating funding for infrastructure and other projects to gird against superstorms like Sandy that slammed Long Island in 2012.

Lobbying was furious on the bill, with hundreds of thousands of dollars spent over the last two years by entities including the American Petroleum Institute, National Fuel Gas Co. and Consolidated Edison of New York employing some of Albany’s most veteran lobbyists, according to state lobbying records.

The measure passed mostly along party lines in the Democrat-controlled Senate — 43-17 — and in the Democrat-led Assembly, 92-49, in the closing hours of the 2024 legislative session.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.