Jury Verdict Against The Oil and Gas Industry Could Drive Up Energy Costs
The latest judgement in Louisiana against Chevron is especially troublesome.
Lawsuits against oil and gas companies date back to 2008 when the Native Village of Kivalina in Alaska filed a lawsuit against ExxonMobil, Chevron, BP, Shell, ConocoPhillips, Peabody Energy, and 18 other energy companies for their contribution to climate change. The suit alleged that the greenhouse emissions of these companies accelerated the melting of Arctic sea ice. In turn, this exacerbated coastal erosion, threatening Kivalina’s existence and necessitating relocation costs estimated at $95 million to $400 million. The case was dismissed on September 30, 2009, with the judge ruling that regulating greenhouse gas emissions was a political matter for Congress and the executive branch, not the judiciary, citing the political question doctrine. The Ninth Circuit Court of Appeals upheld the dismissal on September 21, 2012, and the U.S. Supreme Court declined to review it in 2013.
Since then, dozens of lawsuits have been filed against oil and gas companies for their contribution to climate change and other vague allegations, such as “Exxon Knew”, referring to the allegation that Exxon knew its oil and gas activities contributed to climate change. That campaign significantly influenced other climate litigation, inspiring lawsuits like New York v. ExxonMobil, filed in 2018, where the state alleged Exxon had misled investors about climate risks. Even though Exxon prevailed in 2019, the case bolstered other cases like California’s 2023 suit against ExxonMobil and others, citing decades of deception.
If you thought such lawsuits against oil and gas companies only happen in liberal states such as New York and California, think again. A jury in Louisiana recently decided that Chevron must pay 744 billion dollars to Plaquemines Parish as compensation for land erosion allegedly caused by oil and gas exploration off the coast of Louisiana. As reported by The Center Square:
A $744 million jury verdict in Louisiana is at the center of a coordinated legal effort to force oil companies to pay billions of dollars to ameliorate the erosion of land in Louisiana, offset climate change and more.
Proponents say the payments are overdue, but critics say the lawsuits will hike energy costs for all Americans and are wrongly supplanting the state and federal regulatory framework already in place.
In the Louisiana case in question, Plaquemines Parish sued Chevron alleging that oil exploration off the coast decades ago led to the erosion of Louisiana’s coastline.
A jury ruled, April 4, 2025, Friday that Chevron must pay $744 million in damages.
The Louisiana case is just one of dozens of environmental cases around the country that could have a dramatic – and costly – impact on American energy consumers.
The verdict drew sharp criticism from Louisiana’s oil and gas industry and its allies, who warned the ruling could have dire consequences for the state’s economy:
Today's verdict not only undermines Louisiana's position as an energy leader, but but also threatens our country's trajectory at America-first energy dominance across the globe," Tommy Faucheux, president of the Louisiana Mid-Continent Oil & Gas Association, said. "These lawsuits were never about restoring the coast. As the number one private investor in our working coast, the energy industry is already doing that. Instead, this is a deep-pocketed trial lawyers driving baseless lawsuits hoping to make millions in legal fees. Today's decision is sacrificing the livelihoods of our families, friends and neighbors to give these trial lawyers their big payday.
The worry is that this verdict will cost the state jobs and investments. Marc Ehrhardt, executive director of the Grow Louisiana Coalition, said:
This is a shortsighted, flawed verdict that has the potential to sacrifice tens of thousands of jobs at the altar of Louisiana's trial lawyer economy. With this verdict, Louisiana will be branded as a state that will extort the most recognizable companies on earth for billions of dollars, decades later. Some 40 more lawsuits targeting over 200 companies are underway as well.
My Take:
While previous lawsuits against oil and gas companies alleged harm from “climate change,” these Louisiana lawsuits are troubling because they alleged specific environmental damages for particular activities in the past. It seems to me that it is impossible to draw a direct connection between coastal erosion and the prior activities of specific companies, but that is precisely what they did, and the approach was successful.
Unfortunately, this legal approach to extracting money from oil companies will continue to be replicated, perhaps jeopardizing the “drill baby drill” policy as the cost of doing business increases. Hopefully, the courts will see such efforts as extortion and end them.
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This "coastal erosion" is an unsubstantiated damage in so many ways I don't where to start. At the largest scale, there is the problem of isostacy. The melting of glaciers ten thousand years ago on the Canadian shield allowed that part of the tectonic plate to begin rising, thus having an effect on the Gulf Coast of a teeter-totter, and pushing it downward. This has been documented in published work. Next, the redirection of the Mississippi River away from the Atchafalaya caused this region to be deprived of sediment that would have been naturally deposited over time. Even NASA can document this. But finally, (and I know this because I have worked on oil fields in Plaquemines Parish) this area was mined using solution mining for sulfur back in the 1920's and 1930's. It was the major industry here. In many places surface land became submerged land due to sulfur mining. Port Sulphur has its name because of this, and Freeport Sulphur Company (now Freeport McMoRan) was one of the largest companies. Then there is salt mining in the same area, which isn't always the cause of subsidence, but it can be. Then you add major growth faults in the area, and all along the Gulf Coast, and these huge faults are constantly sliding down to the ocean, and often have salt diapirs pushing their way up the faults. Avery Island, in Iberia Parish, is one of these salt diapir islands that became the home of Tabasco Sauce. Then there is subsidence due to natural gradual compaction of millions of years of deposits of sand and mud by the Mississippi River. The whole Parish, and indeed the whole coastline here is geologically unstable. For what it is worth, I have lived there. I have seen all of this firsthand, in seismic data, in wells drilled, and on the surface. How Chevron can be blamed for any small percentage of this is beyond any scientific integrity, and must be purely political in nature. I can't believe Chevron could not or would not defend themselves with facts.