Energy Freedom Act

Some states have initiated investigations or lawsuits against fossil fuel producers for their lawful activities. Often the purpose of these lawsuits is to extract huge sums of money, including to fund state climate remediation funds. This is an improper attempt to penalize the fossil fuel producers, and it ultimately will raise costs and reduce options for consumers. Another power grab by states is to require companies to file disclosures regarding their greenhouse gas emissions. This law protects state sovereignty and the right to engage in lawful fossil fuel related activities within the state.

Summary: AN ACT relating to fossil-fuel related activities, statements, and emissions and reports related to the same.

Section 1. Definitions

As used in this Article:

  1. “Annual emissions baseline” means the highest total CO2 emissions in China and India combined for at least one calendar year or twelve-month period in the preceding five years, computed based on generally available data regarding actual or estimated country-level emissions.
  2. “Covered emissions” means the emission of carbon dioxide, methane, or nitrous oxide into the atmosphere resulting, directly or indirectly, from the exploration, production, transportation, sale, manufacturing, refining, combustion, or other use of fossil fuels.
  3. “Company” means a corporation, limited liability company, partnership, trust, estate, or other entity formed under the laws of this state, another state or the District of Columbia, the federal government, or another country. “Company” also includes an organization, association, or joint venture, whether incorporated or not. A “company” includes all of the direct and indirect subsidiaries that the company owns.
  4. “Covered activities” means
    1. the exploration, production, transportation, sale, manufacturing, refining, combustion, or other use of fossil fuels in this state by any person; and
    2. any statements or omissions in this state relating to covered emissions.
  5. “Covered government” means another state, a government agency of another state, or a local government in this state or another state.
  6. “In-jurisdiction products” means
    1. for a covered government, only the specific fossil fuel products that were actually shipped, or incorporated into products that were actually shipped, into the territorial boundaries of the state where the covered government is located; and
    2. for a private party, only the specific fossil fuel products that were actually shipped, or incorporated into products that were actually shipped, into the territorial boundaries of the state in which the private party resided at the time of the events at issue.
  7. “Liability” means any legally enforceable obligation to pay money or other thing of value, including but not limited to monetary damages, fines, penalties, disgorgement, restitution, remediation or abatement costs, equitable relief that requires the expenditure of money, attorneys’ fees, taxes, excises, levies, imposts, duties, or surcharges.
  8. “Person” means a natural person, company, government, or governmental subdivision or agency.

Section 2. Right to Engage in Activities Related to Fossil Fuels

  1. The purpose of this Article is to protect the substantive right to engage in covered activities and to prevent discrimination against the exercise of that right. Courts and covered governments that fail to give full faith and credit to this Article, or to records or judicial proceedings pursuant to this Article, violate protections in the U.S. Constitution and federal law, engage in unlawful discrimination, and inflict sovereign injury on this state and its citizens. It is the intent of the legislature that this Article applies retroactively and extraterritorially.
  2. It is the public policy of this state that persons have the right to engage in and invest in companies that engage in covered activities, and no injunctive relief may be granted and the amount of liability is zero dollars for covered emissions resulting directly or indirectly from covered activities, occurring at any time, unless such covered activities are proven to be in violation of the federal Clean Air Act, 42 U.S.C. § 7401 et seq., as amended, or another federal environmental law, in which case liability shall be based solely on federal law.
  3. Except where required by federal law, no covered government or private party may bring an action in any forum, or otherwise impose or seek to impose any liability, in connection with covered emissions from covered activities, unless the liability is calculated and based solely on in-jurisdiction products. Nothing in this Article authorizes any person to bring any action or make any claim against any person where the person is not otherwise authorized to do so.
  4. A natural person or company who is aggrieved by a violation of this Article and the Attorney General each may commence an action, intervene, or otherwise assert a claim for declaratory and injunctive relief, nominal damages, a fine of no more than $1000, and any other appropriate relief.

Section 3. Process for Determining the Amount of Covered Emissions

  1. Any natural person or company that is required by law to file reports with this state or any covered government, may seek declaratory relief to finally and conclusively determine and establish a definitive record of the person’s covered emissions in this state from any or all of the following:
    1. all direct emissions that stem from sources that the natural person or company owns or directly controls, regardless of location, including, but not limited to, fuel combustion activities;
    2. all indirect emissions from consumed electricity, steam, heating, or cooling purchased or acquired by the natural person or company, regardless of location; and
    3. all indirect upstream and downstream emissions, other than those emissions covered by paragraph 2 of this subsection, from sources that the natural person or company does not own or directly control and may include, but are not limited to, purchased goods and services, travel, and processing and use of sold products.
  2. In determining the amount of emissions for an identified time period under subsection A of this section, the court shall, at the election of the natural person or company whose emissions are being determined, apply the formula set forth in subsection E or accept a calculation offered by the person that is supported by substantial evidence. In addition, if the calculation has been verified by a third-party independent verifier, an independent third-party assurance provider, or both, the court’s declaration shall so find.
  3. In an action under subsection A of this section, the [Department of Environmental Quality] shall be named as the defendant, and after being served, the [Department] shall publish notice of the action on its website, which shall constitute service by publication to all interested parties. The court shall advance and hear the action as expeditiously as possible and render its decision no later than 60 days after the action is commenced. The court shall not award costs or fees to any party. Only the natural person or company that seeks a declaration under subsection A may appeal such a determination.
  4. A declaration under this section is a permanent and definitive record of a natural person or company’s emissions over a given time period, and it is final and valid for all purposes and as to all persons, except in those instances where the federal Clean Air Act, 42 U.S.C. § 7401 et seq., as amended, or another federal environmental law requires reporting using a different methodology, in which case it shall be final and valid for all other purposes.
  5. Given the uncertainty in calculating covered emissions, and to ensure a uniform calculation process for emissions in this state, a natural person or company may elect to defer to a court-determined calculation of its emissions in an action brought under subsection A of this section. If such election is made, the court shall apply the irrebuttable presumption that covered emissions in this state for each of the categories in subsection A is 0 kilograms of carbon dioxide equivalent (kg CO2e) over an identified time period if the natural person or company provides a declaration that based on a reasonable inquiry its covered emissions for that time period are less than ten percent of the annual emissions baseline times the number of years (including fractions of a year) equal to the length of the identified time period.
  6. A natural person or company that is subject to a disclosure requirement and the Attorney General each may enforce this section by commencing an action, intervening, or otherwise asserting a claim action against any state or local government, or officer thereof, that fails or refuses to give full faith and credit to a record made and judgment obtained under this section and may obtain declaratory and injunctive relief, nominal damages, a fine of no more than $1000, and any other appropriate relief.

Section 4. Severability