California AG Sues ExxonMobil Over Plastics

California’s Attorney General Rob Bonta has sued ExxonMobil because unrecycled plastic waste has accumulated in California. The lawsuit claims ExxonMobil has misled the public for decades over the ability to recycle plastic waste, and that plastics recycling was, to paraphrase, overhyped. Is it really ExxonMobil’s fault that Californians do not want to pick up after themselves?

The lawsuit details the paths by which discarded plastic items reach the environment thereby contaminating water supplies, endangering wildlife, and our health. It cites numerous studies showing that consumers discard anything and everything made of plastic: drink bottles, coffee cups, sporks, shopping bags, nylons, clothing, tarps, automobile parts, furniture, razors, and more. In fact, the list is endless, see The Graduate.

For plastics recycling, there is a difference between what is technically feasible to do and what is economically feasible to do. ExxonMobil and others have developed technologies to recycle or repurpose plastics. ExxonMobil operates a plastics recycling plant. At its most basic level, recycling discarded plastics can be as simple as chipping and bonding the material into composite building components, furniture, or roadbeds. But the costs of collecting, processing, repurposing, and recycling plastics are not included in the first sale price of the original soda bottle, disposable razor, or printer cartridge. The question then becomes can the sale price of the recycled product cover the costs of collecting discarded plastic and recycling it.

Economically, the lawsuit complains that since 1990 California has spent or incurred more than $5.5 billion to clean up discarded plastic waste and incurred a cost of $15.7 billion because of plastic contamination in curbside bin recycling. Other costs such as annual litter collection programs are added to the complaint. To place this in perspective, California’s Gross Domestic Product is approximately $4.0 billion each year so a doubling or trebling of the cleanup budget appears doable.

California imposes bottle deposit fees of 5-cents for bottles under 24-ounces, 10-cents for bottles over 24-ounces, and 25-cents for boxed wines and spirits. Part of the reason is that the incentive or better stated, the penalty for not returning or not recycling the bottles is insignificant. Inflation-adjusted, these bottle deposit fees are much less than the bottle return fee that Coca-Cola paid consumers in the 1950s and 1960s when it would wash and reuse its very durable glass bottles. To stay roughly equivalent to Coca-Cola’s 1950’s pricing of 2-cents per bottle, California’s bottle deposit fee should be at least 20-cents for bottles under 24-ounces. More than a half-century ago, Coca-Cola would pick up empty bottles and internalize the recycling. Today, Coca-Cola trucks return without any cargo, and the empty bottle disposal decision is left to the consumer who may not care about a nickel here or a dime there.

Without considering recycling, if the California legislature enacted a $1.00 per bottle deposit fee, would that be high enough to eliminate litter? The legislature is probably reluctant to enact such a fee requirement. But if AG Bonta is successful in his litigation, there is no question that any costs incurred by ExxonMobil and its co-defendants will be passed on to consumers.

Crude oil and natural gas are not just fuel sources but the chemical building blocks of plastics as are coal and agricultural products. AG Bonta’s lawsuit fits the broader pattern of legal actions taken against major oil companies. Some wealthy individuals and groups have proposed and supported anti-fossil fuel company litigation to malleable state attorney generals in the hope that one or more of the lawsuits will help cripple the companies.

ExxonMobil will not be alone in this litigation. AG Bonta states in the lawsuit: “Plaintiff is not aware of the true names and capacities of defendants sued herein as DOES 1 through 100, inclusive, and therefore sues those defendants by fictitious names. Each fictitiously named Defendant is responsible in some manner for the violations of law alleged. Plaintiff will amend this Complaint to add the true names of the fictitiously named defendants once they are discovered.” We are left to speculate who and why? The list of companies and entities involved in the supply chain of plastics is endless—ranging from DuPont’s use of coal to develop nylon to Cargill’s development of agricultural products as plastics feedstocks. Even the State of California may be a defendant.

But shaking down or even crippling an ExxonMobil, DuPont, or Cargill will not change consumer behavior. AG Bonta has the cause and effect all wrong. U.S. consumers will continue to use plastics if there is no substantive financial penalty or prohibition. The focus must be on consumer behavior where the attorney general has no leverage and where legislators are notorious cowards when it comes to imposing cost or inconvenience on consumers.