LIBERTY AND JUSTICE — Companies and business groups that have sued over the Securities and Exchange Commission's climate risk disclosure rule have offered a variety of explanations for their opposition, ranging from what they see as the agency’s lack of authority to impose such requirements to the cost and compliance burdens it would create. Conspicuously missing from these challenges are arguments that businesses shouldn’t be compelled to disclose greenhouse gas emissions because there is no climate crisis. Then there’s Liberty Energy, a Denver-based fracking company whose lawsuit filed in the 5th Circuit Court of Appeals led to the temporary stay placed on the SEC rule shortly after it was finalized last month. After like-minded challenges were consolidated in the 8th Circuit, Liberty asked that court to reinstate the stay. And then — out of an “abundance of caution,” as the company said in its court filing — it filed suit in federal court in Texas last week. Liberty CEO Chris Wright gained notoriety last year after posting a video on LinkedIn in which he said, among other things, that “there is no climate crisis” and that “the term ‘carbon pollution’ is outrageous.” Those comments led to a dust-up, documented by the Wall Street Journal, that saw LinkedIn temporarily remove the video from its website. Wright has made clear that he’s not a global warming denier, having written in a company report that while human activity has driven warming of the planet, climate change is “far less urgent than our other largest afflictions today.” Liberty is aligned with others fighting the SEC in arguing that the agency's final rule is an example of regulatory overreach that will harm businesses. “They’re just way out of their lane,” Wright said. “Unfortunately, bigger government, more overbearing government, does hurt small upstarts and dynamism in our marketplace. And I’m very opposed to that.” That still leaves the question of why Liberty is going on its own while other companies that have expressed similar concerns are relying on the U.S. Chamber of Commerce, the nation’s largest business group, to lead the fight. (Liberty and Nomad Proppant Services are the only companies listed as plaintiffs on their lawsuits; Liberty owns a “significant portion” of Nomad and “exercises certain control rights” over it, according to court documents). “We would have to spend a lot of money to gather these numbers and report them,” Wright said. “They're always going to involve estimates and judgments. We're going to be sued for sure. I think that's one of the motivations — if you have a new, detailed data reporting requirement, environmental groups are going to sue and say, ‘We think you've counted this number wrong or that.’ They're going to sue because I think part of the motivation here is let's make it harder to be an oil and gas company in the United States because there’s kind of a view that that's good for climate change.” It’s a strategy that’s already turned heads among those following the issue. “It's clearly an offensive strategy,” Daniel Hawke, an Arnold & Porter partner who formerly worked in the SEC's enforcement unit. “It's a strategy that involves a very early attack on the rule. They are sticking their necks out in the sense that they are suing their regulator. In my experience, companies often do not want to be at war with their regulator.” This isn't Liberty's first fight with the federal government over a sustainability-related issue. The company previously joined red states in their lawsuit over a Labor Department rule that allows retirement fund managers to consider ESG factors. A Texas judge ruled against Liberty and the GOP officials last year, but that decision is now pending an appeal. Liberty is being represented in the SEC case by Boyden Gray partners Jonathan Berry and R. Trent McCotter, who also represented the company in the challenge over the Labor Department's ESG rule. Both served in various posts in the Trump administration and are listed as contributors to the conservative Federalist Society. Berry and McCotter are also contributors to Project 2025, a conservative playbook and policy agenda funded by conservative megadonor Leonard Leo and led by the Heritage Foundation that seeks to eliminate the federal departments of Education and Commerce and boost fossil fuel production, among other things. Neither Berry nor McCotter responded to requests for comment. Wright said he didn’t know about both Project 2025 when asked about the connections in an interview. He followed up in a statement to say that the lawyers were picked because of their “credentials and experience” in administrative law “and nothing else.” Wright added that Liberty pays all its own legal bills.
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