Big Oil Continues to Rake It in, While the World Burns

Posted by NYPIRG on August 28, 2023 at 6:54 am

For many, August is the traditional time for vacationing.  Vacations are often the week or so before Labor Day.  Yet, while many would like to relax, it’s hard to chill out with the ongoing drumbeat of bad news about the worsening climate.

Interested in going to Hawaii?  Bad news there, as out-of-control wildfires have devastated one of the islands.  America’s central plains?  Heat domes contributing to very hot temperatures.  Planning a trip to the Mediterranean?  Wildfires there too, as well as unprecedented water temperatures, heat domes, and floodingAfrica is facing severe climate disasters.  Asia has more than its share of problems, too.  South America?  Same.  Even Antarctica, which is in its winter season, is breaking up due to unseasonably warm temperatures.

When it comes to the worsening climate, there is nowhere to hide.

Here in New York, Governor Hochul has spent a good chunk of her past year responding to this state’s climate catastrophes.  Since last summer, the governor has unveiled at least $1.8 billion in state money for climate related projects – either responding to disasters or spending to help protect from future ones.  All of those monies came from New Yorkers’ wallets –  and that doesn’t include additional spending that local governments are allocating for climate costs.  A study from NYS Comptroller DiNapoli found that over a ten-year period (the last five and next five years), 55% of New York localities’ municipal spending outside of NYC was or will be related to climate change.

New Yorkers are spending big and that spending is expected to increase to as much as $10 billion annually by the middle of the century. 

The debate in Albany has been on how to shift from an economy that relies on fossil fuels to one that does not.  The state has a goal of “net zero” greenhouse gas emissions by the middle of the century. A laudable, and scientifically-backed, goal, but it ignores an important question:  Who pays the costs for climate damages that occur in the meantime and who pays for projects to allow the state to adapt to a hotter planet?

The current policy of the Hochul Administration is to pass those enormous costs onto the public, while opposing legislation that would force the biggest oil companies to pay for those costs.

There is good reason to make the oil companies pay. First, they are responsible; the oil industry knew that the burning of fossil fuels would lead to a greenhouse gas effect that would warm the planet. Instead of alerting the world to what was coming, they did all they could to undermine climate action.  Starting in the 1970s, scientists working for Exxon made “remarkably accurate projections of just how much burning fossil fuels would warm the planet.”  Yet for years “the oil giant publicly cast doubt on climate science and cautioned against any drastic move away from burning fossil fuels, the main driver of climate change.”

And it’s not like the oil companies don’t have the money.  In a new review of the oil industry’s profits, it was estimated that over the past two and a half years the largest, publicly-traded oil companies, as well as the Saudi Aramco company, rang up profits of three-quarters of a trillion dollars.  You heard correctly, three-quarters of a trillion dollars in 30 months.  Those profits are expected to continue for quite some time.

Big Oil certainly has the money – their coffers are filled from the actions that have contributed mightily to the catastrophic conditions we are experiencing now, and will continue to endure.

And while Big Oil has the money and continues to rake it in hand over fist, New York does not.  According to the most recent state analysis, New York is facing state budget deficits of $36 billion over the next few years.  Of course, that could look different when lawmakers return to Albany in January, but it’s safe to say that big projected budget deficits will result in stingier spending on services. One area where costs cannot be ignored is the infrastructure costs resulting from climate-caused damages.  Roads, bridges, and other critical infrastructure that we all rely on every day will need to be repaired, rebuilt, and protected.

It is mind-boggling that the governor would review the state’s budget situation and its rising climate costs and ignore the profits of the oil industry.  The legislation that is under consideration has been approved by the state Senate and has the virtue of forcing some of the massive oil industry profits into state spending, and doing it in a way that ensures that any such charges are not borne by the public.

It’s bad enough that New Yorkers are suffering from dangerous air, intense storms, and rising sea levels, they are also on the hook for hundreds of millions of dollars to deal with the costs from a worsening climate.  At the same time, Big Oil is reporting staggering profits on top of record earnings last year.  Making Big Oil pay is the obvious solution.  If Governor Hochul and the State Assembly want to deal with affordability and the climate crisis, they must join with the Senate and pass the Climate Change Superfund Act and make corporate climate polluters – not hardworking New Yorkers – pay.