Michigan Sues Big Oil, Alleging A Conspiracy To Delay The Energy Transition
The lawsuit, which comes after the Trump administration preemptively sued the state last year, brings claims under federal and state antitrust laws.
A BP gas station in Michigan. The state has over 600 BP-branded gas stations, according to a lawsuit filed by the Michigan attorney general's office. Credit: F.D. Richards via Flickr, CC BY-SA 2.0
Story co-published with Climate in the Courts
Major oil and gas companies are facing a fresh lawsuit from a U.S. state contending that they conspired to stifle competition from renewable energy in a decades-long scheme to maintain their market share and inflate profits.
On Friday, January 23, the state of Michigan sued BP, Chevron, ExxonMobil, Shell, and their chief U.S. trade association the American Petroleum Institute (API). The lawsuit, filed in federal district court, alleges that defendants engaged in an “illicit conspiracy” to delay the transition to renewable energy and maintain market dominance of fossil fuels, in violation of federal and state antitrust laws. The case is the first of its kind to bring such antitrust claims against the fossil fuel industry in the context of the energy transition and the climate crisis.
It comes as communities across the country reel from escalating climate disasters and a mounting affordability crisis, and as state and local governments and individuals continue to turn to courts in efforts to hold fossil fuel firms accountable for their role in bringing about these impacts. Dozens of climate accountability lawsuits have been launched against companies like ExxonMobil over the last eight years, grounded in various claims ranging from classic nuisance and failure to warn, to consumer fraud and unfair competition, to racketeering. Michigan is now the eleventh state to file suit against Big Oil, but just the first to file charges under the federal Sherman and Clayton Antitrust Acts. Michigan has also brought claims under the Michigan Antitrust Reform Act.
“By colluding to delay the energy transition away from fossil fuels, Defendants have deliberately imposed staggering external costs on Michigan and the people of Michigan,” the complaint argues. These costs include higher energy bills, economic damage, rising insurance premiums and lowered home values, and worsening climate impacts and public health costs.
Rather than focusing on climate change impacts and associated costs, the case is instead framed around alleged manipulation of energy markets and the consequences of corporate behavior that essentially locked in a fossil fuel-based energy system. This anticompetitive conduct, Michigan says, has resulted in constrained consumer choice in transportation and residential energy usage, and higher energy prices paid by consumers.
“Whether you own a home, a small business, or run a large corporation, rising energy and transportation costs harm everyone. These out-of-control costs are not the result of natural economic inflation, but due to the greed of these corporations who prioritized their own profit and marketplace dominance over competition and consumer savings.” - Michigan Attorney General Dana Nessel
“By suppressing innovation and investment in renewable energy, EVs, and EV infrastructure, Defendants have reduced the production of renewable energy for transportation and home heating and cooling, raised prices for Michigan consumers, and caused the United States to fall behind China and other foreign markets in the race to pioneer cheaper and cleaner alternatives to fossil fuels,” the complaint asserts. Michigan says the big oil entities have ultimately operated as a cartel, working to suppress renewable energy and prevent rapid uptake of electric vehicles.
As detailed in the complaint, in 1979, internal Exxon studies found that renewables would need to supply at least half of global energy by 2010 in order to avoid catastrophic climate impacts. That same year, API established a CO2 and Climate Task Force to coordinate strategies and responses to scientific evidence linking fossil fuels to climate harms and to the threat of a large-scale transition away from fossil fuels.
Instead of warning the public about the climate change risks of fossil fuels and leading a transition to cleaner alternatives, Exxon and other defendants ultimately decided to abandon their own investments in clean energy. And they embarked on a campaign to stifle competition from renewables and to delay the energy transition in order to protect their market dominance, despite having full knowledge of the catastrophic climate consequences of unrestrained usage of fossil fuels, the suit contends. The complaint goes on to explain the tactics employed to advance this scheme, from squashing EV and solar panel technologies, to limiting investments in clean energy, influencing university research, and disseminating misinformation about the viability of renewable energy.
And the scheme worked as intended. Fossil fuels today still dominate the energy mix, even as renewable solar and wind have become cheaper and account for the vast majority of new electric generation capacity. In Michigan, as in other states, consumers have limited options when it comes to energy sources used for electricity or heating. Options are also limited when it comes to fueling transportation. Electric vehicles are still a minority of the overall motor vehicle makeup, and public charging infrastructure is not widely developed or available. This is all by design, Michigan argues, in order to protect the profits and market share of the incumbent fossil fuel producers.
“Michigan is facing an energy affordability crisis as our home energy costs skyrocket and consumers are left without affordable options for transportation. Whether you own a home, a small business, or run a large corporation, rising energy and transportation costs harm everyone,” Michigan Attorney General Dana Nessel said in a statement.
“These out-of-control costs are not the result of natural economic inflation,” she added, “but due to the greed of these corporations who prioritized their own profit and marketplace dominance over competition and consumer savings.”
ExxonMobil and Chevron did not immediately respond to a request for comment, and BP and Shell both declined to comment.
API responded with a statement it has used repeatedly when asked for comment about the litigation against Big Oil. “These baseless lawsuits are a coordinated campaign against an industry that powers everyday life, drives America’s economy, and is actively reducing emissions,” said API senior vice president and general counsel Ryan Meyers. “We continue to believe that energy policy belongs in Congress, not a patchwork of courtrooms.”
The statement does not directly address the specific allegations, but rather deflects and misleads. The message that the oil and gas industry “powers everyday life,” for example, conveniently omits the role the industry plays in influencing demand and perpetuating dependency on its products. Renewable energy could be meeting most energy needs today were it not for the actions by major oil companies to sabotage their competition, as detailed in Michigan’s lawsuit.
Furthermore, the industry is not “actively reducing emissions,” especially when it comes to emissions associated with their products (called Scope 3 emissions), which comprise around 90% of a fossil fuel producer’s total value chain carbon emissions. According to new data from the Carbon Majors database, which calculates CO2 emissions (including Scope 3) for the world’s largest oil, gas, coal and cement companies based on production figures, ExxonMobil, Chevron, Shell, and BP all increased their emissions in 2024 compared to 2023. In 2024, Exxon emitted 677 million metric tons (MtCO2e), Chevron emitted 577 MtCO2e, Shell emitted 426 MtCO2e, and BP emitted 354 MtCO2e. In 2023, these figures were 562 MtCO2e, 487 MtCO2e, 418 MtCO2e, and 347 MtCO2e, respectively.
Michigan’s lawsuit, which is seeking damages and injunctive relief, comes after the Trump administration took action last year to preemptively sue the state over its expected but not yet filed lawsuit against major fossil fuel companies. Nessel had announced in 2024 that her office planned to pursue litigation against Big Oil over climate change impacts and sought proposals from outside counsel to assist in this work.
The Trump Department of Justice’s lawsuit against Michigan argued that the anticipated claim by the state, which was expected to center around climate harms, was preempted by the Clean Air Act – a federal law that authorizes the EPA to regulate air pollution, including greenhouse gas emissions (though Trump’s EPA is now arguing it lacks authority to regulate GHGs). But the lawsuit that Michigan actually filed has very little to do with greenhouse gas emissions or climate impacts.
As a press release from the AG’s office explains: What “started as an investigation into the financial impacts to Michigan from the fossil fuel industry’s persistent coverup and deception about climate change” instead “uncovered one of the most successful antitrust conspiracies in United States history.”
The pivot from climate impacts to antitrust is clever. Nessel's framing around consumer choice and energy affordibility sidesteps the Clean Air Act preemption issue Trump's DOJ tried. What caught my eye was 1979 - Exxon studies showing renewables needed by 2010, then API forms a CO2 Task Force. That timing isn't accidental. Courts tend to be more receptive to economic harm argumets than environmental ones.