In December 1999, tobacco companies paid California counties, cities and the state $314,169,788. And that was just the first payment.
Tobacco companies paid many more hundreds of millions of dollars to California under the “Tobacco Master Settlement Agreement” that was reached after extended litigation with seven tobacco companies. The companies agreed to change their marketing, to finance a $1.5 billion anti-smoking campaign, to turn over confidential company documents, to disband industry trade groups accused of hiding damaging information, and most of all, to pay the states an estimated $206 billion.
On the website of the California attorney general at oag.ca.gov/tobacco/msa, documents from the case are posted for public view. Along with the Tobacco Master Settlement Agreement, there’s a Consent Decree, a Memorandum of Understanding, and an Agreement Regarding Interpretation of Memorandum of Understanding.
By now, everybody understands. If government officials can determine that big companies covered up bad facts, hundreds of billions of dollars can be extracted from the companies and routed to the government, where politicians get to spend it.
In order for this revenue-through-settlements operation to work, the companies have to be convinced that a jury would find them guilty of something so heinous that fines of hundreds of billions of dollars are totally justified and maybe not even adequate.
It’s not necessary for the companies to be guilty in actual fact. All that’s necessary is that the general public believes the companies are guilty.
On Friday, California Attorney General Rob Bonta filed a lawsuit against five major oil companies. “From extreme heat to drought and water shortages, the climate crisis they have caused is undeniable,” Bonta said. “It is time they pay to abate the harm they have caused.”
According to Bonta, “Oil and gas companies have privately known the truth for decades — that the burning of fossil fuels leads to climate change — but have fed us lies and mistruths to further their record-breaking profits at the expense of our environment.”
The Office of Governor Gavin Newsom put out a statement, too. “For more than 50 years, Big Oil has been lying to us — covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet. It has been decades of damage and deception. Wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts parching our wells. California taxpayers shouldn’t have to foot the bill. California is taking action to hold big polluters accountable.”
This is the tobacco settlement model, but there’s one major difference. Nobody needs tobacco to survive. Try getting along without oil and gas, not to mention electricity. If you weren’t aware that much of the electricity used in California is generated with natural gas, even on a sunny day when solar power is producing maximum megawatts, go online to caiso.com and click “Today’s Outlook” and “Supply.” Check it during the day and again after sunset. Then think about the fact that California lawmakers intend to force gas-fired power plants to close, and soon.
You may also want to check the website of the California Energy Commission at energy.ca.gov to see the “Annual Oil Supply Sources to California.” In 2022, 59% of the oil California needed was imported from foreign countries. Another 15.2% came in from Alaska, and only 25.8% was produced in-state. For comparison, in 1982, 61.4% of the oil refined in California was produced in California, and only 5.6% came from foreign sources.
The state needs oil and gas, and it’s a costly fantasy to pretend otherwise.
California officials endlessly repeat that the state is “getting off fossil fuels” and make evidence-challenged statements blaming climate change for the predictable consequences of their own policy changes affecting land management and water allocation.
But California won’t boycott oil and gas companies, because the lights would go out and transportation would be priced out of reach. Voters would probably notice.
So Bonta and Newsom plan to make the oil companies pay “financial penalties” and “punitive damages,” which will further raise the price of energy along with the price of everything that’s made or moved in California.
This will cause actual damage to the lives of real people. Will anyone be held accountable?
Write Susan@SusanShelley.com and follow her on X @Susan_Shelley
