Why You Will Soon Pay More For Fuel (A Lot More)

Traveling through the Middle East this week, I heard unprecedented pessimism from colleagues in government and the private sector about the health of economies that are mostly dependent on the flaccid price of oil. In Bahrain, for instance, construction cranes still punctuate the dusty skyline, but headlines are dominated by budget cuts and layoffs. To be sure, the world will continue to consume vast quantities of oil for the foreseeable future, including by the Formula 1 race cars that roared into the island kingdom this week, but is there something in the wind to suggest the real price is far higher - - and that we might soon be paying it?

Private plaintiffs and government attorneys have sued tobacco companies for decades, holding them accountable for the harms their products caused and for the deceptive smoke they blew in the faces of health officials and consumers alike. The result was billions of dollars of settlements and judgments, which caused the price of cigarettes to rise exponentially to cover those added costs. In 1970, a pack of smokes cost 38 cents. By 2014, it had risen to more than six bucks. Inflation alone would have raised the cost to only about $2 and change, so most of that bump was the cost of accountability.

So what does this have to do with the price of oil and fuels? California’s Senate Bill 1161, called “The Climate Science Truth & Accountability Act,” would allow state and local governments - - and private citizens who believe they have been harmed, including shareholders of oil companies - - to sue those companies for tobacco style deception about the dangers of their products. It would cover actions as far back as thirty years, potentially creating billions of dollars of liability.
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