California’s Latest Attack on Oil Industry Reveals Misplaced Priorities

This month, California State Sen. Scott Wiener introduced a bill that would allow Californians, private insurance companies, and the state’s insurer of last resort to sue oil and gas companies for wildfire damages.

The new bill takes the premise of California’s climate lawsuit – which is already on shaky legal ground, as similar suits are facing a string of defeats in state courtrooms across the country – and pushes it in an even more absurd direction.

Of course, what the legislation is truly about is not insurers, wildfires, or even helping Californians; it is another way for the state to seek damages in the form of oil companies’ profits, a favorite game of California lawmakers.

More Scapegoating

As EID has catalogued, California has continued to find new avenues to attack oil and gas companies, including frivolous lawsuits, a climate superfund bill, and an unfounded crusade against the state’s refiners.

The new fire insurance bill is the latest move in an aggressive campaign waged by California progressives against oil and natural gas companies. But it’s California’s residents who get the bad end of the bargain, as Sacramento’s antagonism has pushed energy companies out of the state and stuck California’s drivers with the highest gas prices in the country.

Energy companies have been quick to point out the obvious disconnect between the new bill and the challenges at hand, namely, proper wildfire management and disaster response. President and CEO of The Western States Petroleum Association Catherine Reheis-Boyd emphasized this point:

“We need real solutions to help victims in the wake of this tragedy, not theatrics. Voters are tired of this approach.”

California’s Misplaced Priorities  

Why would California rush to sue oil companies (again)? Probably because it’s easier to push the blame to oil companies than to face the consequences of California’s misplaced priorities.

First, according to the Institute for Energy Research (IER), California has underinvested in fire response and water conservation, leaving the region vulnerable to fires. As IER explains:

“As Los Angeles burned from the wildfires, Newsom’s administration was working on a mission to protect a supposedly endangered form of trout. The state employs about 5,300 workers in conservation and wildlife protection vs. 570 in the fire agency’s wildland management — a 9 to 1 dichotomy.”

It’s not just a resource allocation problem – according to Newsweek, California has been limited in its ability to undertake controlled burns and other preventative measures due to state and federal environmental regulations. These regulations open the door for activists to block wildfire management efforts in the courts.

Making things worse, California has limited insurance companies’ ability to accurately factor wildfire risk into home insurance policies. As private insurers flee the state, California has leaned heavily on its state-run property insurer, the FAIR plan. As a result, according to the California Policy Center, the FAIR plan has become cash-strapped and overexposed.

Reason Magazine explains that the FAIR plan is set to dig out of its budget hole via an upcoming assessment on private insurers, which will result in increased rates for individual policyholders. Unless, that is, individuals, insurance plans, and the FAIR plan can all extract funds from oil companies instead:

“By shifting financial liabilities for the wildfires from insurers and insured onto oil companies, S.B. 222 could spare individual insurance policyholders from what’s sure to be a politically unpopular double whammy of a special FAIR assessment and hiked premiums.”

Reason points out that this pass-the-buck exercise would “undermine the purpose of insurance” altogether, as insurers would be able to avoid pricing wildfire risk into their premiums.

Curiously, the San Francisco Chronicle reports that “there’s one group that wasn’t directly consulted on the bill – insurance companies themselves.” Instead, the activist groups California Environmental Voters, Center for Climate Integrity, and Extreme Weather Survivors “worked on the bill” alongside State Sen. Weiner’s office.

The involvement of the Center for Climate Integrity, a billionaire-backed group that promotes frivolous lawsuits against energy companies, should tell you all you need to know about the true motivations behind the legislation.

Bottom line: California State Sen. Wiener’s latest bill is just the next move by a state obsessed with targeting the profits of oil and gas companies instead of taking responsibility for their own policy failures. If S.B. 222 were to succeed, it’s clear that it would amount to another oil industry shakedown, only exacerbating the structural and policy problems that leave Californians vulnerable to wildfires.

Read the full story at EIDClimate.com.

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