Bonta lawsuit will push gas prices higher

Anyone who has filled up a tank of gasoline in California has seen that prices are soaring again, topping $6 a gallon throughout Los Angeles and Orange counties. Those prices are up nearly 70 cents a gallon since a month ago. Apparently, California Attorney General Rob Bonta doesn’t think they’re high enough — as he last week announced a lawsuit against big oil companies that will only make the problem worse.

The lawsuit — breathlessly described by his office as the People of California v. Big Oil — accuses five of the largest oil companies (Exxon Mobil, Shell, Chevron, ConocoPhillips, and BP) and the American Petroleum Institute of spending decades deceiving the public about the effect of fossil-fuel production on the climate. The lawsuit claims billions of dollars in damages from pollution, drought and heat waves. It’s a publicity stunt, but a dangerous one.

“Oil and gas companies have privately known the truth for decades – that the burning of fossil fuels leads to climate change – but have fed us lies and mistruths to further their record-breaking profits at the expense of our environment,” Bonta said in a statement. Gov. Gavin Newsom’s supporting statement was equally overheated and disingenuous, as he prattled about holding “big polluters accountable and deliver the justice our people deserve.”

Specifically, the lawsuit declares oil and gas production to be a public nuisance, which is news to the Californians who depend on fossil fuels to power their cars, businesses and homes – not to mention the 59,000 Californians who work directly in the industry. The oil industry also generates more than $40 billion a year in tax revenues to the state, local governments and school districts.

The action also alleges that the companies have led to the destruction of the state’s natural resources, have engaged in false advertising, made misleading marketing claims and engaged in unfair business practices by promoting fossil fuels while knowing that they “would lead to devastating consequences to the climate, including in California.” It’s an ideologically driven attack on a legal industry.

The American Petroleum Institute is correct to describe this as part of an “ongoing, coordinated campaign to wage meritless, politicized lawsuits against a foundational American industry.” Climate change may pose a challenge, but taking a punitive and combative approach will not lead to climate solutions. It will only encourage companies to slash production, which is no doubt the design as the state mandates an all-electric future. But it will come at a steep price for consumers.

California’s oil prices are the highest in the nation for several reasons, including our high tax rates and regulatory burdens. But the main reason centers on supply. The state requires a special environmental formulation that limits importation from other states. Furthermore, state policy makers passed a law banning new internal-combustion vehicles beginning in 2035.

“The industry’s time in California is limited, and the oil-refining industry is behaving as any industry would in comparable circumstances, by transitioning its operations away from gasoline to activities that will prove to be more profitable in the long run,” wrote the Hoover Institution’s Lee Ohanian.

Compounding these policies with a punitive lawsuit will further dry up production and oil supplies and — you guessed it — drive gas prices even higher. Well, at least you know who to blame.