On November 29, the California Energy Commission will hold a public hearing to question oil executives and experts about why gasoline prices have spiked in California in recent months despite drops in the price of crude oil and gasoline nationally. The record-high prices have yielded record-high profits for oil companies. San Ramon-based Chevron recently reported quarterly profits of $11.2 billion, for example, and ExxonMobil posted its largest quarterly profit ever—$19.7 billion.
When pressed, the industry has been unable to provide a sufficient explanation for the surge in gas prices, which has led to investigations by multiple attorneys general and strongly worded threats by the Biden administration. in California, Governor Newsom said he is working with the state legislature to enact a price gouging penalty on oil companies that would go directly to taxpayers.
This focus on imposing potential consequences on the corporate practices of major oil companies is an important step in our collective reckoning with the fact that these companies have long privatized the profits of their business while socializing the costs.
For decades, the fossil fuel industry downplayed the reality of climate change while deliberately spreading disinformation about the damage its products cause to people and the planet. As losses and damages from climate change-related extreme weather mount, there is growing urgency to demand accountability from fossil fuel polluters. In the absence of regulations or policies that would rein them in, cities and states have turned to the courts.
A federal judge recently ruled that San Francisco and Oakland can proceed in state court with a lawsuit accusing BP, Chevron, ConocoPhillips, ExxonMobil and Shell of deceiving customers about their contributions to the fossil fuel-driven climate crisis and creating a public nuisance.
The lawsuit contends that the companies “did not simply produce fossil fuels. They engaged in large-scale, sophisticated advertising and public relations campaigns to promote pervasive fossil fuel usage and to portray fossil fuels as environmentally responsible and essential to human well-being.”
Since the lawsuit was originally filed in 2017, the costs of coping with the climate crisis have become increasingly clear. In 2018, San Francisco voters approved a $425 million bond to protect the Embarcadero seawall from earthquakes and sea-level rise, which already contributes to regular flooding of the Embarcadero during extra-high tides. According to reporting by the San Francisco Chronicle, work to prepare the city’s shoreline for these future challenges will take decades and cost more than $5 billion.
This lawsuit, and others like it, have hinged on establishing what fossil fuel companies knew about the harms of their products (that they’d cause “potentially catastrophic events”), when they knew it (as early as 1965), and what they did with that knowledge (buried it and painted rosy pictures for shareholders and the public).
To this day, deception remains a core strategy for these companies. This fall, the U.S. House of Representatives Committee on Oversight and Reform released more than 200 pages of internal corporate documents demonstrating that oil executives are fully aware that they are publicly touting solutions to the climate crisis that won’t deliver the swift and deep emissions cuts needed to slow global warming and are instead designed to delay the transition away from fossil fuels.
History shows that oil and gas companies’ bottom lines have always been more important to them than ethical business practices or our planet’s future. That’s why it’s more important than ever to hold major oil producers accountable for the harms they are causing—from the cost of gas at the pump to the worsening impacts of climate change. It’s good news that California policymakers are picking up the magnifying glass to closely examine alleged price gouging as the latest incident in this long history of deception. It’s time for oil companies to be in the hot seat.