New York consumers could be hit with up to $75 billion in extra costs over the next 25 years thanks to a new tax on fossil fuel companies. Governor Hochul just needs to sign the bill.

The Climate Change Superfund Act passed through the state legislature and is now on its way to the governor’s desk, awaiting her signature. The piece of legislation, if Mrs. Hochul puts ink to paper, would require fossil fuel companies to help finance the state government’s investments in climate change infrastructure.

Although the bill puts a $3 billion annual burden on fossil fuel companies for 25 years, that weight can be passed along to consumers of gas and oil.

“These companies have the ability to charge a surcharge just in New York. Three billion dollars collected solely from New Yorkers is nothing to sneeze at,” the director of research at the Empire Center for Public Policy, Ken Girardin, tells the Sun.

“I’ve never in my life seen corporations choose the ratepayer over the stockholder,” the Democratic speaker of the New York State assembly, Carl Heastie, said. Thus, the penalty will be “taken out on the ratepayer.”

From a consumer perspective, the bill presents a hidden tax in the form of higher costs, as companies try to recover losses. With millions of New Yorkers already planning to leave the state, according to recent polls, the bill may provide them with one more reason to pack their bags.

“More New York farmers and businesses will leave the state, more and more families will leave,” the ranking member of the assembly energy committee, Philip Palmesano, tells the Sun. 

Some consumers may be willing to shoulder the cost if it provides a reduction in carbon emissions or protections against climate change. The only problem is, the legislation misses the mark, analysts tell the Sun.

“This isn’t about actually mitigating climate change. This is primarily about paying $75 billion to help New York’s shrinking and inefficient construction unions,” Mr. Girardin says.

The efficacy of the bill is being called into question by industry experts. Rather than solving climate change, the bill is “haphazardly penalizing a lawful and necessary industry on which we all depend,” a spokeswoman for Energy in Depth at the Independent Petroleum Association of America, Mandi Risko, tells the Sun.

Forcing a rapid energy transition, rather than allowing markets to gradually alter energy mixes, can backfire. “Progressive policies in Western Europe have not abrogated fossil fuel dependence,” the director of the initiative on American energy security at the Hudson Institute, Brigham McCown, reports.

Top-down pressure, instead, may simply leave America dependent on other countries, as shown by “Europe’s struggle to sustain itself following the removal of Russian oil and gas from the market,” Mr. McCown writes. Applying this principle to the state level, New Yorkers will turn to other states for their fossil fuels — and their livelihoods.

Even if companies do shift the financial burden onto New Yorkers, the legislation risks alienating the fossil fuel industry.

“Rather than work collaboratively with the industry to further our shared goal for a lower-carbon future, state lawmakers opted to rush through at the very last possible moment a bill designed by activists to further their own interests,” a spokesman for the American Petroleum Institute, Scott Lauermann, tells the Sun.

On the list of potentially affected companies, Saudi Aramco is in the lead and may owe the state $644 million each year, according to state senators sponsoring the legislation. Chevron, BP, Shell, Pemex, Exxon Mobil, and Peabody Energy could each be forced to pay more than $150 million a year.

“Climate superfund bills are another billionaire-backed attempt to decimate the American energy industry using unproven attribution science,” Ms. Risko says.

Vermont enacted a similar law two weeks ago, becoming the first state to do so. The California, Maryland, and Massachusetts state governments have each introduced this type of legislation.

Climate superfund bills are “backed by the Rockefellers,” and “based on the same flawed theories as the climate litigation campaign,” according to Energy in Depth. The Rockefeller Family Fund has played a key role in strategizing and financially supporting the legislation, Energy in Depth reports.

If the governor enacts the Superfund bill, it would be highly vulnerable to challenges in the courts. States do not have the ability to charge companies retroactively for carbon emissions, or regulate emissions in general, opponents argue. 

The bill will likely run into a number of legal and constitutional issues, including the takings clause, due process clause, and interstate commerce clause, Mr. Palmesano says. “I would hope she doesn’t, but if she does, lawsuits will be filed the next day,” he says, when asked if Mrs. Hochul will sign the bill.

The fossil fuel industry is also not “solely responsible for New York’s greenhouse gas emissions,” Mr. Girardin says. Power plants, car drivers, and batteries for “clean” energy, for example, contribute significantly to carbon emissions. Opponents, therefore, believe the bill unfairly singles out the gas and oil enterprises.

New York may become the second state, after Vermont, to pass such legislation to target fossil-fuel companies. While Mrs. Hochul is the one who can sign it into law, New Yorkers would be the ones to foot the bill.

Mrs. Hochul’s office did not respond to requests for comment.