At a moment when California is losing refining capacity and state gas prices remain high, San Francisco State Sen. Scott Wiener introduced a sweeping new climate-liability bill targeting oil and gas companies. 

The bill (SB 982) gives the California Attorney General authority to sue oil and gas companies to recover insurance costs due to alleged climate damages. Covered costs would include homeowners’ premium increases attributed to extreme weather events, and special assessments imposed by California’s insurer-of-last-resort, the FAIR plan. 

The Western States Petroleum Association blasted the bill: 

“This is a political stunt that will kill jobs and increase costs for consumers ,” [WSPA spokesman Jim Stanley] said. “This bill would essentially make oil and gas companies financially liable for every natural disaster impacting California — creating a never-ending web of litigation and claims with no foundation in fact or science.”   

Bill recycles bad ideas that will raise gas prices 

SB 982 is similar to a bill Sen. Wiener introduced last year (SB 222), which failed amidst opposition from the energy industry, labor groups, businesses, and insurers.   

• Challenging claims that climate change alone is to blame for high insurance costs and limited coverage, California Policy Center argued that the state’s own mismanagement of the insurance industry has barred insurers from accurately pricing risk, leading many insurers to “leave the state altogether.”   

• R Street Institute‘s Steven Greenhut pointed out that California’s own policy and environmental review requirements – not oil and gas companies’ production of energy – has substantially increased wildfire risk in the state. 

• Christian Britschgi, a reporter at Reason Magazine, explained that California regulators, up until recently, prohibited insurers from “factoring climate risks into their premiums,” contributing to the very shortage Wiener and others now blame on climate change. 

• Analysis from the Pacific Research Institute showed that SB 222 would “increase the average household energy costs by $2,176” annually if applied to damages from the Los Angeles Wildfires.  

• The California Center for Jobs and the Economy published research showing that SB 222 “effectively turns climate policy into litigation,” and would increase the cost of gasoline by 63%.  

No one thought SB 222 was a good idea, except for the activists that co-sponsored the bill. The same appears to be true this time around: SB 982 is co-sponsored by California Environmental Voters and Extreme Weather Survivors, a climate activist group pushing for lawsuits against the energy industry across the country.  

Wiener Bill a Political Headache for Newsom 

The timing is especially notable. After backing California’s high-profile 2023 climate lawsuits against big oil, Gov. Gavin Newsom has recently shifted in the opposite direction amid presidential speculation, warning that the state must not “walk blindly into supply shortages” or policies that “drive fuel gas prices higher for working families.” 

California Attorney General Rob Bonta has gone mum on the 2023 case in recent months, while Newsom omitted it entirely from his final State of the State address in January, a striking absence given the political fanfare when both officials rolled out the state’s climate suit at New York Climate Week in 2023.  

The reason why is hardly a mystery.  

With voters expressing fury with energy affordability challenges in California, any association with climate lawsuits like the 2023 California case or those envisioned by Wiener could be big time losers at the ballot box.   

That political tension has only increased in recent weeks, as California continues to lose additional refining capacity amid mounting regulatory and litigation pressure. Just this week, Valero announced it would shutter its Benicia refinery earlier than expected, a move that will likely jeopardize fuel supplies and send gas prices even higher.  

BOTTOM LINE: Layering aggressive climate-liability lawsuits onto a shrinking refining base could be a recipe for disaster, and exacerbate the very affordability challenges the bill claims to address.