Litigation is killing our pipelines

OPINION:

In more than 35 active cases, states and municipalities are suing oil and gas outfits for “climate harm.” This litigation, with billions of dollars in potential damages, retroactive for decades, is a gut punch to anyone who has ever signed a contract.

This is from government agencies that protect their own policy decisions through laws and regulations that prevent similar litigation.

I have spent a career in uniform as a U.S. Army engineer, including nearly a decade on critical infrastructure project sites. Engineers know you don’t break ground on a project without the confidence that you will finish it.

This is especially true for multibillion-dollar investments such as pipelines or oil and gas refineries. That confidence isn’t optional; it is a mandatory component to even consider breaking ground.

Unfortunately, the growing list of climate lawsuits from state and local governments threatens that confidence.

Energy producers are among the largest investors in U.S. infrastructure, reinvesting profits into pipelines, export terminals, refineries and advanced transmission systems that underpin American energy dominance. This investment has made the U.S. a global leader in energy production and reliability.

Unsurprisingly, the demand for this infrastructure is exploding. With artificial intelligence data centers, an increasing domestic manufacturing base and a growing economy, the need for investment has never been greater.

The litigation also comes at a fragile period for American energy security. The conflict in Iran has driven oil and gas prices higher.

States with the largest volume of climate litigation against energy companies have the highest petroleum costs in the country. Decades of litigation in California, for example, have created a drastic undersupply of domestically produced energy available in the state. As a result, California imports more than 60% of its oil from foreign countries. This increases reliance on volatile global energy markets while working against American national security interests.

Large-scale energy projects require billions of dollars in upfront capital, long planning horizons and regulatory certainty. When companies face the prospect of massive, retroactive liability and overall uncertainty, investment capital is diverted away from new infrastructure and toward legal reserves, higher borrowing costs and risk mitigation.

This erodes America’s edge in global energy dominance, made all too clear with the example in California and other states with these backward policies.

However, other major investments to meet growing demands and help maintain energy independence in the U.S. are underway. Energy Transfer recently announced that it is preemptively expanding the width of its planned Desert Southwest Pipeline to support increased demand forecasts.

Bechtel received final approval to begin construction of a nearly $7 billion liquefied natural gas export project, and producers across the nation are partnering with data center operators to build gas plants onsite to reduce strain on the public grid.

Unfortunately, these are exactly the kinds of projects most vulnerable to litigation-driven uncertainty. If courts impose billions of dollars in damages on energy producers, then companies will be forced to reassess or delay similar projects.

As a nation, we have all benefited from decades of these kinds of investments. Now is not the time to make energy producers the villain. On the contrary, they contribute mightily to the continued strength of our economy and national security.

If lawsuits win, then we all lose the infrastructure we need — and we all pay.

America’s power edge hangs in the balance on this. Let builders build with confidence. Cut the legal noise, or watch the lights flicker while parties argue in court.

• Tom Magness is a strategic adviser to Grow America’s Infrastructure Now. He formerly served as a commander in the U.S. Army Corps of Engineers, the nation’s premier public engineering organization.