Hochul’s Big Move Rocks the Industry – Oil, Gas, and Coal Get Charged $75B, but Guess Who’s Really Paying!

New York Governor Kathy Hochul has enacted a groundbreaking climate law targeting oil, gas, and coal companies, demanding they contribute $75 billion to the state over the next 24 years. While proponents say this is a critical step toward holding polluters accountable, critics argue the law is flawed and could backfire on everyday New Yorkers.

“This bill would allow the state to recoup $75 billion from major polluters,” Hochul announced in her approval message, highlighting that fossil fuel companies have emitted over 1 billion metric tons of greenhouse gases in the state since 2000. Funds collected from the companies will be used for environmental resilience projects like flood prevention and coastal protection.

For climate activists, this law is a major victory. Modeled after federal regulations requiring polluters to clean up toxic waste sites, the New York Climate Superfund aims to make corporations pay for the damage caused by their carbon emissions. Groups like the Sierra Club and Environmental Advocates NY have praised the move, calling it a significant win for climate justice.

But not everyone is on board. Opponents of the law argue it’s impractical and could lead to higher costs for consumers. “What would you have them do? Not sell fuel in New York State,” questioned Ken Pokalsky, vice president of the New York State Business Council, one of the law’s critics. He, along with more than three dozen business and energy groups, sent a letter to Hochul urging her to veto the bill, citing potential economic fallout.

The law’s financial burden falls on 38 fossil fuel companies, including American giants like Exxon and Chevron and foreign firms like Saudi Aramco and Russia’s Lukoil. Saudi Aramco faces the largest share, with an annual fee of $640 million, while other companies like Pemex and Lukoil could pay hundreds of millions each year.

Advocates of the law argue that these assessments are fair, as the companies are profiting from products that contribute to global warming. Hochul said the move is about shifting the financial burden of the climate crisis away from New Yorkers. “For too long New Yorkers have borne the costs of the climate crisis, which is impacting every part of the state,” she said, referencing increasingly severe storms and other climate-related challenges.

However, concerns about how this law will be enforced—especially for foreign companies—remain a hot topic. Former state Public Service Commission chairman John Howard pointed out the legal and logistical hurdles in holding international firms accountable. “The companies will likely get a friendly ear in federal court,” Howard warned, questioning whether the law could withstand legal challenges.

Adding to the controversy, critics say the financial fallout could trickle down to consumers. With energy companies facing hefty new bills, the cost of fuel and utilities could rise for households and businesses. “Its $75 billion price tag will result in unintended consequences and increased costs for households and businesses,” warned a letter co-signed by the Business Council and the American Petroleum Institute Northeast Region.

Moreover, this law comes alongside other new costs in New York, like a congestion toll to enter Midtown Manhattan and an upcoming “cap and invest” rule targeting fossil fuel usage. Together, critics argue, these measures create a financial double hit for residents and businesses.

While climate advocates applaud the bold step, the debate over its economic impact and legal viability is far from settled. For now, New York’s attempt to tackle climate change by holding corporations accountable has sparked both hope and controversy, setting the stage for a prolonged battle over its implementation.