What does a San Francisco case have to do with Louisiana jobs? Unfortunately, this can all be explained to the hardworking women and men of our state – and this is yet another example of the government’s frivolous lawsuits that are killing jobs and opportunities in the Pelican State.
The state of California recently sued energy producers and manufacturers, saying they are responsible for climate change and billions of dollars in damages. The lawsuit sounds a warning about a dangerous tactic across the United States being deployed by some state and local governments — from California to Hoboken, NJ
They used the court system to set national energy policy and achieve their environmental goals, with Louisiana workers paying the price. It’s also dejà vu for Louisiana, which is already suffering the consequences of the government’s baseless lawsuits against the energy industry.
The California lawsuit may be the latest government-led attack on the energy industry, but it’s certainly not new or novel. For nearly 20 years, states and local governments have sued major energy companies, saying they are responsible for climate change. In Louisiana, which is home to a quarter of the country’s energy supply and where the industry employs more than 250,000 citizens, cases like this are devastating and spell doom for the return of our state.
The legal basis for climate litigation is on shaky ground, and the Supreme Court has repeatedly struck down similar cases. In the 2011 case of American Electric Power v. Connecticut, Justice Ruth Bader Ginsberg wrote the unanimous opinion and dismissed the climate claims brought by eight states and the city of New York, pointing out that legislative bodies are the appropriate venues. for climate regulation – not courts. Lower federal courts have also rejected these types of claims.
In 2021, the US Court of Appeals for the 2nd Circuit dismissed the case in New York City, saying that even if the allegations were true, no single entity could be held legally responsible for global climate change.
But just because a lawsuit is baseless doesn’t mean it’s free. Unfortunately, Louisiana has had first hand experience with wrongful government lawsuits against the energy industry through endless lawsuits on the coast. Louisiana parishes have sued more than 200 energy companies since 2013, alleging that the companies’ operations dating back decades have damaged coastal wetlands and wetlands.
In reality, the lawsuits are nothing more than an unprovoked attack by a small group of ambitious, well-funded lawyers against a seemingly deep-pocketed industry. . But make no mistake, these cases are not a fight between a small state and “Big Oil.” Of the companies targeted, most of them are small and independent operators, and more than 33,000 workers work in these companies.
When governments sue our job creators to score political points for their constituencies, our workers and communities pay the price. A 2019 Pelican Institute study found that coastal lawsuits have a direct impact on Louisiana’s economy, resulting in losses of between $44 million and $113 million each and every year since the coastal lawsuits were filed. in 2013. At least 2,000 jobs were lost in a two-year period when the lawsuits were first filed, equating to $70 million in lost income for Louisiana workers—all directly tied to the case.
Ironically, the lawsuits brought by the government also hurt Louisiana governments. As offshore drilling has declined by more than 50% since 2013, state and local governments are losing at least $22.6 million annually in royalties to the industry. Again, the citizens suffer, because there is less money for schools, roads and other infrastructure; in some cases, working families saw increased taxes to offset these losses.
If we aim to reduce emissions, innovation and the free market are the better way. For example, switching to natural gas is one of the most successful ways to reduce carbon emissions. According to the Energy Information Administration, the shift from coal to natural gas led to a reduction in carbon emissions by 32% from 2005 to 2019.
Louisiana is uniquely positioned to lead the way for the nation and the world. Compared to other states, Louisiana has the third largest natural gas production, fifth largest proven natural gas reserves, and about 10% of total marketed natural gas production.
Louisiana’s experience with frivolous government lawsuits against the energy industry is a cautionary tale for the nation. States and local governments should heed this lesson. Using the court system to extract money from energy companies and set national energy policy could set a dangerous precedent and come with a painful price tag, especially in Louisiana, where the Energy operations support nearly one out of every nine jobs in our state.
We’d better maximize the clean resources we have and work with companies that can invest in innovation, hire employees – our fellow citizens – and give wages and dollars to taxes for our communities.
Daniel J. Erspamer is the CEO of The Pelican Institute for Public Policy.
