Issue No. 37

  • With the confirmation of three new commissioners, FERC now has a full complement to face the challenges of rising demand.
  • A House hearing examined the consequences of the Artificial Intelligence boom on the provision of electricity.
  • New York’s grid operator worries about power deficiencies during extreme weather events in summer and winter.
  • The White House, joined by 21 states, announces an effort to modernize the grid, starting with “GETs,” the long (low?)-hanging fruit of transmission lines.
  • Beset by legal and regulatory challenges, the Mountain Valley Pipeline begins operations.
  • The U.S. Supreme Court considers a Honolulu case that could determine who sets energy policy: states and localities or the federal government?

Senate Confirms Three FERC Commissioners, Providing the Agency With a Full Complement to Tackle Immense Challenges

With large majorities, the Senate on June 12 and 13 confirmed all three of President Biden’s nominees to the Federal Energy Regulatory Commission (FERC), which now has its full complement of five members to face major challenges. The decisions came with less than three weeks to spare before the term of Commissioner Allison Clements expired. Her absence would have meant that FERC lacked a quorum and could not conduct business.

The last time FERC had five members was in January 2023, when Richard Glick, who was then chairman, departed the agency after Sen. Joe Manchin (I-WV), chairman of the Energy and Natural Resources Committee, blocked his reconfirmation bid. Glick backed additional climate considerations for pipeline reviews – a position that Manchin and other members of the committee vigorously opposed.

As we reported in Issue No. 34, only one of the three nominees, Democrat Judy Chang, appeared to be a controversial choice, with Republicans like Sen. John Barrasso of Wyoming and Mike Lee of Utah unhappy with some of her answers at a confirmation hearing in March.

At that hearing, Sen. Lee asked Chang if she thought it was “appropriate for FERC to regulate downstream emissions from a natural gas pipeline project” – the issue that led to Chairman Glick being denied another term. Chang said that “the Natural Gas Act doesn’t specify greenhouse gas emissions as a criteria for denying pipeline projects or specify climate change in its determinations,” E&E News reported.

Chang’s response seemed equivocal to some at the hearing. “I understand the tension,” she said. “I have not reviewed everything in those policy statements. And if I were fortunate enough to be confirmed, I will dedicate my time to better understand the issues at hand.”

Sen. Barrasso, the ranking member of the Energy and Natural Resources Committee, told his colleagues at a June 4 meeting of the panel, when the nominees were advanced to the full Senate, that, upon meeting with her, “Ms. Chang reiterated that she will honor and adhere to FERC’s independent and non-partisan mission. Ms. Chang committed to uphold FERC’s statutory mandate to encourage the development of abundant supplies of natural gas at reasonable prices.” The Wyoming Senator added:

She told me that the Commission’s role is not to regulate greenhouse gas emissions or address climate change. She committed to work to ensure that the rest of the country doesn’t experience the high energy costs and threats to reliability that her home state of Massachusetts continues to face.

An adjunct lecturer at the Harvard Kennedy School, Chang was formerly Undersecretary of Energy and Climate Solutions for Massachusetts and a member of the board of the Massachusetts Clean Energy Center. According to her biography, in her role as a state official, she led the “effort in setting policies across the energy sector in the state, working across agencies in aligning the strategies and plans for decarbonization and climate mitigation.” 

In the end, Chang, who was nominated for a term expiring in June 2029, was confirmed by nearly a two-to-one margin. She received the votes of a dozen Republicans, including Sen. Barrasso and Senate Minority Leader Mitch McConnell (R-KY). Sen. Lee opposed her.

The other Democratic nominee, David Rosner, also of Massachusetts, whose term will expire June 2027, was approved, 67-27. Rosner served as an energy industry analyst for FERC, currently on detail to the Senate Energy and Natural Resources Committee staff. Sen. Manchin recommended him to the Biden Administration as a commissioner, according to media reports last fall. Rosner was previously a senior policy advisor at the U.S. Department of Energy’s Office of Energy Policy and Systems Analysis and an associate director of the energy project at the Bipartisan Policy Center (BPC).

Rosner’s nomination was unwelcome in some quarters. “The only thing worse than a Joe Manchin staffer on FERC is a Joe Manchin staffer who used to work for a fossil fuel front group,” said Lukas Ross, Friends of the Earth’s climate and energy deputy director, in a statement, referring to BPC.

But when it came to a vote of the full Senate, only three Democrats voted against Rosner, two of them being his home-state Senators, Ed Markey and Elizabeth Warren. The other was Sen. Tim Kaine (D-VA).

Republican Lindsay See, the third nominee, served as Solicitor General of West Virginia, Manchin’s home state. She previously practiced appellate and administrative law with Gibson, Dunn & Crutcher in Washington. 

As E&E News reported, See argued on behalf of Republican-leaning states and energy interests in West Virginia v. EPA, the landmark decision the Supreme Court issued in June 2022. “The court’s 6-3 opinion said the Clean Air Act did not give EPA the authority to craft a broad power plant emissions rule like Obama-era Clean Power Plan, a proposal announced in 2015 that never went into effect,” said E&E. “The Supreme Court’s ruling restricted how the federal government can regulate carbon emissions from power plants.”

See received the most support from the Senate, gaining confirmation, 83-12.

Overall, the result was a good one, according to key members of the Energy and Natural Resources Committee. Sen. Manchin said during the confirmation hearing that a “fully-seated, bipartisan” commission offers “more opportunity for advancing long-lasting, sensible energy infrastructure policy.”

Sen. John Hickenlooper (D-CO) agreed. “I am eager for there to be a five-person commission,” he said. “I think having a full commission adds value to what they produce. We will get a more collaborative effort and get better rules.”

Senate Majority Leader Chuck Schumer (D-NY) said the confirmations would allow FERC to “keep its quorum and continue its mission of providing Americans with affordable, reliable, safe energy.”

FERC faces critical challenges to meet that mission, especially in the face of serious threats to reliability. In May, the month before the confirmation, the commission, with just three members, unveiled the first major electric transmission policy update in more than a decade (for more on the subject, see the section below). The policy has the aim of speeding up new interregional lines to move more power from wind and solar generators to meet growing demand for electricity coming from data centers, electric vehicles, and modernized factories.

“The country’s lack of transmission has been a major hindrance for renewable and storage projects waiting to connect to the grid,” wrote Zach Bright in a Politico piece. And, as Reuters reported:

FERC has been working for nearly two years on the rule to reform how new electric transmission gets approved and paid for…. The final rule requires transmission owners to conduct 20-year plans assessing regional electric transmission needs that would need to be revisited every five years.

The rule also scrapped anti-competitive conditional right-of-first-refusal (ROFR) agreements, while retaining “right-sizing” ROFRs for upgrades on existing lines. These steps will probably limit targeted litigation that slows projects.

The order was approved, 2-1, with “a blistering dissent” from FERC’s sole Republican at the time, Commissioner Mark Christie, a Republican appointee. He was particularly incensed that, in his view, the rule promotes a renewables agenda and will harm consumers.”

Industry associations applauded the three confirmations. “FERC has no shortage of complex challenges to tackle, and it does that best with a full slate of commissioners,” said Todd Snitchler, president and CEO of the Electric Power Supply Association (EPSA), the trade group for competitive wholesale electricity suppliers. “Power demand is surging, grid reliability is at risk, and market signals need to retain critical dispatchable resources and spur billions in investment to build the generating resources and infrastructure needed to meet the moment.” 

EPSA’s Snitchler added in a statement:

We were pleased to see all three of the incoming nominees make commitments to maintain FERC’s independence as an economic regulator focused on reliability during their confirmation hearings. It will be essential that FERC works to address wholesale power market barriers and opportunities to ensure reliability and drive competitive investment. Support for the proven ability of markets to deliver reliable, cost-effective, and innovative grid solutions will be essential.

Edison Electric Institute (EEI) president and CEO Dan Brouillette, whose organization represents investor-owned electric utilities, stated: “With demand for electricity growing at a pace not seen in 30 years, EEI’s member companies are focused on meeting their customers’ changing needs and on delivering resilient clean energy across our economy. We look forward to continuing to work with FERC on critical regulatory issues to ensure that electricity customers have the energy they need, when and where they need it, reliably and affordably.”

Amy Andryszak, president and CEO of the Interstate Natural Gas Association of America (INGAA), congratulated the new members of the commission: “As an independent agency, FERC works best when it has a full complement of five commissioners to provide the regulatory certainty necessary for investment in America’s energy infrastructure. INGAA looks forward to continuing to work with the commission to ensure our nation has the needed energy infrastructure to provide Americans with secure, reliable, and affordable access to natural gas, electricity and other transportation fuels.”

House Hearing Looks at the Impact on the Electric Grid of the Artificial Intelligence Boom

On the same day the Senate Energy and Natural Resources Committee voted to send the nominations of the three FERC commissions to the floor, the panel’s House equivalent, the Energy and Commerce (E&C) Committee held a hearing titled, “Powering AI: Examining America’s Energy and Technology Future.”

The June 4 hearing explored the impact of AI on the nation’s electric grid. As Rep. Cathy McMorris Rodgers (R-WA), the committee’s chair, wrote in a memo to members and staff:

According to the Department of Energy, electricity consumption in the United States grew by about 0.5 percent per year in the last decade; however, estimates show annual growth of 5 to 6 percent through the end of the decade, a tenfold increase from current levels. Much of this growth is expected to come from data centers and the increasing use of AI.

The Chair noted that the nation’s largest grid operator, PJM Interconnection, which serves the Mid-Atlantic and parts of the Midwest, predicts net energy growth of 2.4% annually from today through 2034, “resulting in an increase of summer peak demand from 151,254 MW [megawatts] in 2024 to 178,895 MW” 10 years from now.”

AI computing consumes so much energy because of the “vast amount of data that the model is trained on, the complexity of the model, and the volume of requests made to the AI by users,” explained Lyline Lim, an AI photo editor, in a Forbes piece, which added:

During training, the AI model “learns” how to behave based on a large set of examples and data. Training an AI model can take anywhere from a few minutes to several months depending on the amount of data and complexity of the model. During this time, GPUs – a type of electronic chip used to process large amounts of data – are running 24 hours per day, consuming a large amount of energy.

At the same time this growth in electricity use is occurring, PJM forecasts “40,000 to 58,000 MW of thermal generator retirements in the region by 2030 due in large part to regulations and policies and their effect on the economic viability of these resources,” said the McMorris Rodgers memo. Meanwhile, the Electric Reliability Council of Texas (ERCOT) expects an additional 40,000 MW of load growth by 2030. Data centers will boost load requirements in “Arizona, Georgia, and Ohio, among many others.”

Rep. Jeff Duncan (R-SC), who chairs the E&C subcommittee on Energy, Climate and Grid Security, noted that electricity demand is accelerating with data center growth at just the same moment as electricity-producing facilities are running non-stop at 90% capacity and PJM is warning that 30% of capacity may retire by 2030. Duncan said that the U.S. needs new nuclear power facilities and the infrastructure to go with them. He also called for the streamlining of the permitting and judicial process to speed the expansion.

Also at the hearing, the full committee heard testimony from four witnesses. Philip J. Dion of the Edison Electric Institute cited projections from FERC and NERC (the North American Electric Reliability Corporation) that peak demand and energy growth will soar over the next decade. He added that these “forecasts may underestimate demand,” but the “trend line is clear.”

Dion said that cost allocation and interregional planning need more attention to recover from weather events and cyberattacks. He also pointed out that it takes 10 years to site, permit and build a new transmission line. “Constructing and building the line is not the issue,” he said. The delays are caused by the permitting process and opposing groups that “have learned how to weaponize the litigation process.”

Tony Clark, a senior advisor with the law firm Wilkinson Barker Knauer, also called for permitting reform for a range of energy sources, including natural gas. He raised questions about the fairness of colocation of data centers at electricity-generating facilities and urged the federal government to incorporate nuclear power into planning for the grid of the future.

Tom Hassenboehler, chair of the advisory committee of the Electricity Customer Alliance (ECA), raised the issue of competition with China, “which is rapidly building transmission and developing its own AI capabilities.” In 2022, he said, China spent $165 billion on its grids while the U.S. spent $33 billion. He said that, while ECA supports the goal of a “clean energy grid,” the U.S. needs “customer-centric policies to support the reliable operation of the grid until those technologies can be deployed and scaled.”

Melissa Lott, a professor at the Climate School of Columbia University, cited an analysis by the Boston Consulting Group that pointed out that “data center electricity consumption was [2.5%] of the U.S. total in 2022 and is expected to triple to [7.5%] by 2030,” with AI driving much of the growth. She, too, advocated more investment in interregional transmission facilities, and she stressed the poor condition of the grid:

In giving the U.S. energy system a C- grade in their 2021 Infrastructure Report Card, the American Society of Civil Engineers highlighted that “all three major components of the electric grid (generation, transmission, and distribution) have an investment gap’ and that ‘transmission and distribution (T&D) systems still struggle with reliability [despite recent investments]. This problem is likely to accelerate as the impacts of climate change persist and the public’s expectation of more reliable, ‘always-on’ electricity increases.” This low grade — which was issued before the AI boom and accelerating adoption of electric vehicles – highlighted the need for rapid growth and investment in the grid.

Professor Lott also urged government to “ensure access to the opportunities created by increasing electricity demand for rural and historically disadvantaged communities.”

The legislators made comments and asked questions about nuclear power, a timely issue with the Senate passing bipartisan legislation on June 20 to make it easier to build nuclear reactors. “The bill,” said CNN, “works to bring down costs for developers by streamlining the permitting process — cutting fees and speeding approval times — and spurs more development of new-wave projects, like small modular nuclear reactors.”

Still, although Georgia’s long-delayed Vogtle plant has begun commercial operation (the 1,114 MW Unit 4 started up in May), nuclear remains by far the costliest source of energy in terms of capital expenses in contrast with every other energy technology.

Policymakers are justifiably eager to add more capacity for generating electricity, but witnesses and legislators at the hearing raised the key issue of affordability for U.S. consumers and the importance of the market determining the balance of energy sources. And in the case of nuclear, policymakers should be wary about committing to wildly expensive technologies at the expense of other, lower cost options.

After noting that Georgia, the home of the first new reactor in the U.S. in the past 30 years, is among the best states for conducting business (it was number-one for infrastructure in 2023, according to CNBC), Rep. Rick Allen (R-GA) asked Hassenboehler how tech companies can create innovations for nuclear energy that don’t raise rates for taxpayers. Hassenboehler answered that bringing people into the planning process early is a top priority. Dion of EEI added that bringing nuclear energy back into the portfolio of American power is a positive development.

In response to a question from Rep. Kelly Armstrong (R-ND), Clark said that the growth of data centers in rural areas has raised a major issue of cost allocation. “The Data Center Surge Rides on Rural Power,” said a recent CoBank headline, but who pays for new capital investment if the centers use a large proportion of an area’s electricity and there’s a need by consumers and businesses for more?

Armstrong also asked Clark about the Biden Administration’s zero-emission goals. Clark said that any policy that leads to a decrease in capacity places more strain on a given system. He added that markets naturally look to the least expensive sources of power.

New York’s System Operator Raises Concerns About ‘Deficient’ Reliability Margins in ‘Extreme Weather Scenarios’

A June heatwave in the Northeast highlighted the importance of a report a month earlier by the New York Independent System Operator (NYISO). NYISO stated that more than 40,700 megawatts (MW) of power sources are available to meet an estimated 33,300 MW of peak demand (a measure of the average total demand for a one-hour period).

“Accounting for certain factors, including unavailable generation and operating reserve requirements, the reliability margin under baseline conditions is 752 [MW],” a NYISO news release says. That margin, “under extreme weather scenarios,” is projected “to be deficient.”

The Albany Times-Union reported that Emilie Nelson, chief operating officer of NYISO, said that reliability margins have declined by more than 1,000 MW in two years. “That’s a significant issue especially when we’re impacted by heat waves,” Nelson said.

Gavin Donohue, president of the Independent Power Producers of New York, echoed Nelson’s concerns: “We’ve gone from yellow to red.” Donohue stressed that, even at a time of state-imposed renewable energy goals, New York needs reliable, constant energy from multiple sources. In 2023, gas and oil made up nearly 50% of the state’s electricity generation, according to an annual report from NYISO. Nuclear energy made up 22%.

These worries are not new. NERC’s 2024 Summer Reliability Assessment in May found large parts of North America – especially New England, the Upper Midwest, and the Southwest – are at risk of energy shortfalls, as we reported in Issue No. 36.

In addition to demand growth and heat waves, NERC pointed to recent generator retirements, unplanned outages, and the intermittent nature of renewable sources like wind and solar. Oil and gas remain critical sources of energy in times of extreme weather and power grid strain. Multiple sources provide a consistent, safe, and affordable balance to ensure Americans can keep cool and keep the lights on.

In its Power Trends Report, issued in May, NYISO noted that New York will soon transition from a “summer-peaking” system, to meet demands for air conditioning, to a “winter-peaking” system in the mid-2030s, as more consumers rely on electric space heating. “If natural gas for heating is unavailable, and supply cannot be secured elsewhere, statewide deficiencies could arise as soon as 2029-30 under normal weather conditions.” Under extreme winter weather conditions, the “scenario may happen as early as 2027-28.”

A Federal-State Effort to Modernize the Electric Grid

In May, the White House, along with 21 states, announced an effort to modernize the electric grid. The Federal-State Modern Grid Deployment Initiative, as it’s called, seeks “to accelerate improvements to the electric transmission and distribution network, which are critical to meeting the country’s objectives for affordable, clean, reliable, and resilient power.”

The announcement notes that grid stakeholders are “facing a variety of challenges around projected electric load growth, line congestion, interconnection delays, siting and permitting, variability in power prices for consumers, and increasing reliability risks from extreme weather events due to climate change.”

The Administration “recognizes that more modern, more dynamic approaches to power system management are needed to keep pace with the scale of changes,” says the announcement.

The partnering states committed to “prioritize or accelerate efforts that support the adoption of modern grid solutions to cost effectively meet growing electric grid needs, including efforts that increase capacity and maximize utilization of existing infrastructure.”

Those states are all headed by Democratic governors and are members of the U.S. Climate Alliance: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Washington, and Wisconsin.

An article on May 28 in The Hill stated:

The Biden administration has set ambitious goals for renewable energy deployment, with a target of a carbon-neutral grid by 2035. Reaching this point will require a major buildout in modernized electrical transmission lines to handle the expansion. In the absence of this buildout, the administration faces a bottleneck in adding that renewable capacity to the grid.

The backlog comprises about 2,600 gigawatts of energy, increasing 30 percent last year due in large part to solar and wind demand, according to an April report from the Lawrence Berkeley National Laboratory.

Congress has so far failed to address grid challenges, mainly because of differences between the parties regarding climate change policies, but FERC in May approved a rule (see above) “aimed at clearing backlogs for regional transmission projects, which disproportionately but not exclusively affect renewables,” said The Hill.

The federal and state commitment comes in the face of rising concerns about grid reliability with increased demand from data centers, electric vehicles and revitalized manufacturing at the same time governments are issuing low-carbon mandates. A report late last year by Grid Strategies, “The Era of Flat Power Demand is Over,” shocked many policy makers, who have concluded that the U.S. needs to modernize and change policies or face blackouts and cutbacks.

There are multiple ways to address this impending crisis, but the Biden Administration has chosen to highlight methods of upgrading existing lines. As the announcement stated:

To that end, modern grid technologies, including high performance conductors and grid enhancing technologies (“GETs,” such as dynamic line ratings), are proven, commercially available solutions that can be rapidly and affordably deployed at-scale today to improve line capacity, performance, and resilience. They can be beneficial for both new and existing transmission and distribution projects.

Using advanced conductors, GETs can handle more power flow than traditional cables, Utility Dive article pointed out. U.S. Energy Secretary Jennifer Granholm calls GETs the lowest-hanging fruit for adding capacity to the grid at the least cost. “So there’s no reason not to love grid-enhancing technologies,” she said May 28 at a White House summit on grid modernization.

“We’re focusing on squeezing every amp that we possibly can out of the existing lines that we have,” Dominion Energy’s Matthew Gardner said at the summit.

Dominion will deploy the world’s largest dynamic line rating (DLR) project as part of a $33.7 million grant from the Energy Department’s $10.5 billion Grid Resilience and Innovation Partnerships program, placing the technology on more than two dozen power lines.

States are beginning to act on grid modernization. In April, Virginia’s governor, Republican Glenn Youngkin, signed HB 862, which requires the state’s electric utilities to consider GETs in their integrated resource plan process. In May, the Minnesota legislature passed HF 5247, which adds GETs to the state’s transmission planning process and requires utilities owning more than 750 miles of lines to evaluate use of the technology.

Getting more out of the grid is undoubtedly popular, but it is unlikely to meet the challenges of more demand and a constrained supply of fossil-fuel-generated energy. In 2023, natural gas produced 43% of U.S. electricity – twice as much as all renewables combined, according to the U.S. Energy Information Administration.

The Mountain Valley Pipeline Is Up and Running at Last

Remember the Mountain Valley Pipeline? It’s now operating. The hotly contested natural gas pipeline system that spans approximately 303 miles from northwestern West Virginia to southern Virginia, close to the North Carolina border, finally went into service on June 14.

As we have reported in previous newsletters, including Issue No. 26, legal, regulatory, and political setbacks have delayed the operation of the MVP for many years. The pipeline’s owners filed an application for a FERC Certificate of Public Convenience and Necessity on November 5, 2015. Construction began in 2018. Now, natural gas has started to flow.

The MVP transports natural gas from the vast supplies in the Marcellus and Utica shales of the Northeast to markets in the Mid-South and South-Atlantic regions of the country. The pipeline is expected to provide up to 2 billion cubic feet of gas per day.

According to the Energy Information Administration:

MVP has signed long-term agreements with multiple shippers for the full capacity of the pipeline for at least 20 years from the in-service date. MVP will enable its shippers to access markets in the Northeast, mid-Atlantic, and Southeast United States.

Completing the pipeline was a priority of Sen. Joe Manchin (I-WV). In a pact with the White House, he agreed to back the Inflation Reduction Act of 2022 in return for support of permitting reform – and the MVP. The IRA passed, but opposition from the left wing of the Democratic Party sank the part of the deal that Manchin wanted.

Eventually, approval of the pipeline was included in the Fiscal Responsibility Act of 2023, and in July of that year, U.S. Supreme Court Chief Justice John Roberts lifted two stays on the project issued by lower courts. Eleven months later, FERC granted approval to Pittsburgh-based Equitrans Midstream Corp. to start operations at the MVP.

On June 14, the company announced it had begun: “MVP is now available for interruptible or short-term firm transportation service until long-term firm capacity obligations commence on July 1.”

The long struggle to put MVP into operation shows the effectiveness of aggressive litigation tactics by environmental activists. Delays produce substantial costs and deter investors from pursuing such projects in the first place. Delays also ultimately hurt consumers and national security by denying energy resources necessary for powering an economy.

The MVP story shows how getting a pipeline into operation can require the concerted efforts of the Chairman of the Senate Energy and Natural Resources Committee, the White House, and the Supreme Court. In other words, it’s not easy.

Key Honolulu Case May Decide Who Sets Energy Policy in the U.S.

“Can a single state or locality dictate energy policy for the rest of the U.S.?” That is how the Wall Street Journal editorial board summarized a case that the U.S. Supreme Court is considering, City & County of Honolulu v. Sunoco LP.

The Hawaii Supreme Court decided in October 2023 that Honolulu could “proceed with state common law claims based on the companies’ alleged misrepresentations and concealment of their products’ contributions to climate change.” Honolulu argued that greenhouse gas emissions from fossil fuels create a public nuisance that harms Hawaiians by contributing to a changing climate and extreme weather. The city and county say that the companies knew the products were dangerous but misled the public about the potential harms. 

These arguments have been made before – and dismissed at the federal level. “In 2011,” the Journal points out, “the Supreme Court unanimously dismissed similar claims by states in federal court (AEP v. Connecticut), ruling that the Clean Air Act pre-empted such federal torts. As Justice Ruth Bader Ginsburg explained in the ruling, ‘it is primarily the office of Congress, not the federal courts, to prescribe national policy in areas of special federal interest.’”

In a more recent case, City of Oakland v. BP p.l.c., the federal government argued, “federal law and policy has long declared that fossil fuels are strategically important domestic resources that should be developed to reduce the growing dependence of the United States on politically and economically unstable sources of foreign oil imports.”

Because of the conflict between the Hawaiian and federal courts, several fossil fuel companies in February filed a petition for a writ of certiorari with the U.S. Supreme Court, asking for a review of the matter.

The central question – whether federal law precludes state and local law in rectifying injuries allegedly caused by greenhouse-gas emissions – has enormous importance to energy producers, who are facing a multitude of lawsuits, to the tune of billions of dollars in damages, over the alleged effects of global climate change.

The Hawaii Supreme Court recognized that its decision conflicts with the 2021 ruling of the U.S. Court of Appeals for the Second Circuit in City of New York v. Chevron Corp. In that case, reported Reuters, the federal court “rejected the city’s efforts to sue under state nuisance law for damages caused by the companies’ ‘admittedly legal’ production and sale of fossil fuels, and said the city’s federal common law claims were displaced by the federal Clean Air Act.”

Judge Richard Sullivan wrote for a three-judge panel: “Global warming presents a uniquely international problem of national concern. It is therefore not well-suited to the application of state law.”

The Hawaii Supreme Court, however, agreed with the plaintiffs that the Honolulu lawsuit could proceed under state laws because it “seeks to challenge the promotion and sale of fossil-fuel products without warning.”

On June 10, in considering whether to grant cert, the U.S. Supreme Court invited the U.S. Solicitor General “to file a brief in these cases expressing the views of the United States.” According to Law360:

Up until now, the justices have largely steered clear of the climate torts lodged against fossil fuel companies under state law by state and local governments. But their Monday request suggests a willingness to take a deeper look at the petition lodged by ExxonMobil Corp., Chevron and other companies asking them to reverse the Hawaii Supreme Court’s decision to keep Honolulu’s case alive.

The companies argue that state law can’t be used to regulate global greenhouse gas emissions, and the Hawaii Supreme Court, like other courts, ignored the Second Circuit’s April 2021 dismissal of New York City’s climate change suit that concluded the Big Apple’s claims were a matter of federal law.

In its editorial, the Wall Street Journal argued that the U.S. Supreme Court can’t duck the case: “if the Justices do not intervene now, they will have a bigger constitutional mess to fix down the road.”