California bill would hold oil and gas companies liable for climate change-fueled damage

A bill introduced in California’s state Legislature would make fossil fuel companies legally liable for damages from climate change, similar to current law holding utilities liable for fires started by their equipment.

State Sen. Scott Wiener (D), who co-introduced the bill Monday, said in a statement that the bill would shift the cost burden from climate disasters from homeowners to oil and gas companies.

“Containing these costs is critical to our recovery and to the future of our state. By forcing the fossil fuel companies driving the climate crisis to pay their fair share, we can help stabilize our insurance market and make the victims of climate disasters whole,” Wiener said.

The legislation would also allow the Fair Access to Insurance Requirements (FAIR) Plan, the state’s insurer of last resort, to sue fossil fuel companies to recoup costs rather than passing them onto ratepayers.

The San Francisco-area state senator accused fossil fuel companies of knowingly misleading the public about their products’ role in climate change. While he did not cite specific examples, internal communications at ExxonMobil suggest the company, then known as Exxon, was aware of the relationship as early as the 1970s. Exxon has denied allegations that it spread disinformation about climate change, including during testimony under oath before the House Committee on Oversight and Reform.

The bill's introduction comes weeks after devastating wildfires began ravaging the southern part of California. Extreme weather in the state was a major contributing factor to the damage from the fires — after California had an unusually wet winter, including a number of “atmospheric river” storms, it then experienced record heat the following summer and an atypically dry rainy season, allowing fires to quickly spread in the extra vegetation that grew as a result of the wet weather.

In the longer term, insurance companies have increasingly scaled back their coverage or left California entirely, due largely to the costs of natural disasters in the state. Gov. Gavin Newsom (D) controversially backed a bill last year that sought to discourage insurer exits by allowing faster rate hikes.

Wiener argued the passage of the new bill would allow the insurance market to stabilize without insurers taking a loss from covering the impacts of climate disasters.

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