Big Oil Seeks to Shield Itself From Climate Liability While Trump Is in Power

As several climate liability lawsuits against large oil and gas companies inch closer to trial and states start to adopt climate “Superfund” legislation, the White House and Republican-controlled Congress are rolling out new measures to shield the industry from accountability. 

In a new executive order signed at a White House event on April 8, President Donald Trump directed the Department of Justice to cease enforcement of state climate laws and initiatives—including but not limited to laws and lawsuits targeting fossil fuel companies. It instructs Attorney General Pam Bondi, in consultation with agency heads, to identify “all state and local laws” and regulations, policies, and legal actions that hamper fossil fuel production and that try to rein in climate pollution or address environmental justice. That includes lawsuits and legislation that attempt to hold Big Oil accountable for climate damages and deception. 

The order specifically calls out California’s cap-and-trade policy, polluter-pays climate Superfund laws in Vermont and New York, and state climate lawsuits against energy companies that “could result in crippling damages.” 

The order comes after oil CEOs recently met with Trump and reportedly asked for his help in quashing their mounting climate liability risks. At a private White House meeting on March 19, chief executives from major oil and gas companies, including ExxonMobil, Chevron, ConocoPhillips, and Hess, discussed their growing concerns about state climate liability laws and lawsuits that could put the industry on the hook for paying billions of dollars in damage costs, the Wall Street Journal reported. The oil companies reportedly encouraged the DOJ to file briefs on its behalf or to directly sue states like New York and Vermont that have enacted climate Superfund laws. 

Petroleum companies are currently battling dozens of state and municipal climate lawsuits brought under state tort and consumer protection laws. The suits allege the companies have engaged in a decades-long campaign of deception to misrepresent the climate risks of their products. In January, the Supreme Court declined to take up oil companies’ petitions in a climate tort case brought by Honolulu, clearing the way for that case to advance toward trial. Last month the Supreme Court also rejected a bid from 19 Republican-led states to try to stop climate lawsuits from California and several other "blue" states by filing a case directly with the high court. 

Some states are also passing legislation modeled after the federal Superfund program to impose liability on the largest fossil fuel producers for their past emissions and require them to pay into a state fund that will go toward financing climate damage and adaptation costs. Last year, Vermont became the first state to enact such a law, and New York soon followed. California and nearly a dozen other states have seen similar legislation introduced. 

The Vermont and New York laws are already facing legal challenges from industry groups and Republican-led states. Trump’s Department of Justice could file briefs in support of these challenges, or it could potentially bring its own lawsuit against the state laws. 

The American Petroleum Institute, which is challenging both the Vermont and New York climate Superfund laws, issued a statement applauding Trump’s order. “Directing the Department of Justice to address this state overreach will help restore the rule of law and ensure activist-driven campaigns do not stand in the way of ensuring the nation has access to an affordable and reliable energy supply,” said API senior vice president and general counsel Ryan Meyers. 

Legal experts, however, say the president and his administration do not have the authority to unilaterally quash state climate policies or actions they disagree with. 

“The order itself has no legal effect,” Pat Parenteau, emeritus professor of law and senior fellow for climate policy at Vermont Law and Graduate School, told Sierra. “They can’t just declare all these laws unconstitutional or ‘stop’ them.”

“The president has no authority on his own to nullify state laws,” Michael Gerrard, founder and faculty director of the Sabin Center for Climate Change Law at Columbia Law School, explained. “He is directing the Department of Justice to attempt to intervene in the numerous lawsuits that are challenging the state efforts he doesn't like. It will be up to the state court judges who are hearing these cases to decide whether to allow such intervention, and then whether to agree with their arguments.” 

Parenteau concurred that courts—not the executive branch –—will ultimately determine whether state climate policies and actions, including attempts to hold fossil fuel companies liable, will stand. “[The executive order] won’t save the oil companies from their date with destiny. State courts will decide liability based on the facts and law in each case,” he said.

If the Department of Justice decides to go on offense and investigate or sue states that have enacted strong climate laws or that have targeted Big Oil companies, that would be unchartered territory, Parenteau told Sierra. “If they bring federal lawsuits to try to invalidate state laws, that really will be a whole new chapter. We’ve never seen that before.” 

Environmental advocates and some Democratic elected officials condemned Trump’s executive order, arguing it is an attack on state sovereignty and a brazen gift to fossil fuel polluters. 

Senator Ed Markey (D-Mass.) called Trump’s executive order “a slippery slope to picking and choosing which states get stripped of their sovereignty—just as he is picking and choosing his billionaire donors to repay.” New York Governor Kathy Hochul and New Mexico Governor Michelle Lujan Grisham, co-chairs of the US Climate Alliance, said in a joint statement: “The federal government cannot unilaterally strip states’ independent constitutional authority. We are a nation of states—and laws—and we will not be deterred.” 

“Are we shocked that this president would side with filthy-rich oil executives over the farmers, small businesses, and homeowners who have been devastated by climate catastrophes? We are not,” Paul Burns, executive director of the Vermont Public Interest Research Group, which campaigned in support of Vermont’s climate Superfund bill, told Sierra. “But the president does not have the authority to strike down state law on his own. So, Vermont will keep fighting for this industry to pay for at least some of the harm it has caused. That’s justice.” 

Lobbying congress

In addition to asking for help directly from Trump to push back against state climate laws and lawsuits, oil companies are also turning to political allies in Congress for liability relief. Anticipating such a move, nearly 200 environmental and advocacy groups, including the Sierra Club, sent a letter last month to Senate Democratic Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries urging that Democrats oppose any fossil fuel industry attempts at obtaining a liability waiver or other legal immunity protection through federal legislation. 

“We have reason to believe that the fossil fuel industry and its allies will use the chaos and overreach of the new Trump administration to attempt yet again to pass some form of liability waiver and shield themselves from facing consequences for their decades of pollution and deception. That effort—no matter what form it takes—must not be allowed to succeed,” the groups wrote in the letter. 

While no specific immunity proposal has yet emerged, the Wall Street Journal confirmed advocates’ suspicions that the industry is lobbying Congress for a liability shield. “Separately, oil-and-gas lobbyists are urging members of Congress to consider granting legal protection for oil companies against lawsuits over their contributions to climate change,” the Journal reported last month. 

The oil industry has made previous attempts to shield itself from climate liability. In 2017, an industry-backed group called the Climate Leadership Council proposed a liability waiver and elimination of regulations on greenhouse gas emissions in exchange for a modest carbon tax. And in 2020, during the Covid pandemic, immunity language for the fossil fuel industry was slipped into a draft version of an economic relief package. In response, Congressman Jamie Raskin led a coalition of 60 House Democrats in writing to House leadership urging steadfast opposition. Furthermore, a climate action plan from Democrats on the House Select Committee on the Climate Crisis, released June 30, 2020, included a position statement opposing immunizing the fossil fuel industry from liability. 

“This executive order, I think, is a signal of further escalation,” Cassidy DiPaola, communications director at Fossil Free Media, which supports the national Make Polluters Pay campaign, told Sierra. “And we feel confident that there is going to be a strong and coordinated unified response.” 

DiPaola said her organization and other partner groups are talking with congressional offices and helping to build support for blocking any immunity provision that may emerge. 

“This is a moment for congressional Democrats, and really anyone, any Republicans, who value state authority and state rights, to draw a line in the sand,” she said.