California’s anti-energy crusade has made the state one of the most expensive places to work and raise a family, but some lawmakers seem intent on making a bad situation for consumers even worse.
As EID documented, in February State Sen. Scott Wiener introduced SB 222 – legislation that would authorize the state FAIR plan, individuals, and insurers to sue oil and gas companies for damages tied to the recent string of devastating wildfires.
Naturally, any lawsuits that arise from this bill would be on top of the state’s ongoing frivolous lawfare campaign against American energy, which has helped propel California’s gasoline costs to the highest in the country.
New research from the California Business Roundtable and Pacific Research Institute (PRI) calculated exactly how much SB 222 stands to cost California’s economy.
More Anti-Energy Lawfare Risks Even Higher Prices
In January, the San Bernadino Sun Editorial Board blasted SB 222 in a decisive editorial titled, “Senate Bill 222 must be defeated in the Legislature”:
“If SB 222 passes and Gov. Gavin Newsom signs it, the state’s petroleum industry would be thrown into uncertainty pending court review that could take many years. Legal costs and an uncertain future for the industry would reduce investment in state oil production and distribution, inevitably pushing up prices at the pump.”
Recent analyses from the California Business Roundtable and PRI put hard data behind a fact that many expert commentators know to be true: SB 222 will not provide any economic relief, but instead drive up costs for all Californians.
According to a March analysis from PRI, if plaintiffs’ attorneys successfully recouped the $164 billion in losses from the Los Angeles fires – plus punitive damages – the economic consequences for California would be dire.
Using estimates of punitive damages from a February California Business Roundtable analysis of SB 222, PRI concluded that if plaintiffs’ attorneys were to successfully recoup the $164 billion in losses attributed to the wildfire, California households could see a fifteen percent increase in their annual energy costs.
The added costs wouldn’t be just restricted to utility bills – impacts would also extend to the entire economy. Based on historical trends, the report projects that a 15% spike in energy costs would:
For families, the pain is even more direct. The report, using PRI’s Tax and Budget Model, estimates that higher energy costs would slow income growth, leaving the median household’s income $739 lower after five years compared to a no-SB 222 baseline.
Adding that that to the $2,176 in extra energy costs, the total projected loss in purchasing power per household is a staggering $2,915. (Emphasis Added)
PRI’s analysis is focused squarely on SB 222 and does not forecast how California’s economy would fare if all of its anti-energy lawfare efforts – which include a climate lawsuit, a plastics recycling lawsuit, and a climate superfund bill – were to succeed.
Sacramento Lawmakers Taking Their Time With SB 222
Despite being introduced in February, the legislation has yet to receive a hearing date in the Senate committees where it was assigned.
It is unclear whether lawmakers are hesitant to give the bill any airtime, especially considering state Democrats are reportedly weighing climate priorities against competing goals like reducing the cost of living.
Moreover, it’s unclear where California’s insurers stand on the bill. The San Francisco Chronicle reported that insurance companies weren’t even consulted on the bill. Regarding whether the bill could pose a conflict of interest for insurers that also cover oil and natural gas companies, a spokesperson for Weiner’s office told the paper that “it’s an important question to ask.”
SB 222 Shifts Blame Away From State and Local Governments
Steven Greenhut of the R Street Institute provided a sharp critique of SB 222 in the American Spectator, arguing that it represents a foolish attempt to shift blame onto oil companies rather than address the failures around local land management that are fueling California’s real insurance crisis. Greenhut writes:
“SB 222 would absolve local governments and property owners of responsibility for the wildfires and just blame it all on the oil companies … California’s residents will pay the price through higher gasoline and electricity prices.”
The bill, he argues, is a thinly veiled attempt to weaponize the legal system against the energy sector, which will ultimately exacerbate the state’s affordability crisis and further destabilize its economy.
BOTTOM LINE: SB 222 isn’t about justice or fixing wildfires-it’s a cash grab that would hammer consumers with $2,915 in lost purchasing power, kill 140,000 jobs, and shrink the economy, all while letting California’s leaders off the hook for their own policy failures. Lawmakers would be wise to ditch this bill and focus on actual solutions.
