Escalating conflict and tensions in the Middle East have once again underscored how vulnerable global energy markets are to geopolitical shocks. In U.S. policy circles, every conversation and debate touches on this issue and highlights the need to build more of each energy source to catch up with the rapidly rising demand.
At BlackRock’s 2026 Infrastructure Summit, government officials and private-sector leaders repeatedly emphasized the need to build more energy infrastructure to meet rising demand. Yet a growing obstacle is slowing that effort: relentless litigation that delays or stops energy and infrastructure projects altogether. A new report by the American Council for Capital Formation looks at various forms of ‘lawfare’ that have been used against projects or private firms, with the ultimate goal of making them uneconomical. Such litigation creates negative effects that ripple through every part of the economy.
There are three major avenues of litigation that have been heavily utilized: the strategic use of the existing laws, such as the National Environmental Policy Act (NEPA) and related permitting statutes to delay or halt project development, a growing wave of state and local climate liability actions, and legacy and coastal damage suits, as exemplified in Louisiana. While at first, their goals might seem unrelated, their end results are the same: Subpar infrastructure, an economy held back, higher prices and a widening affordability crisis.
Recent research by the Breakthrough Institute focuses on NEPA, a key law that requires agencies to study the environmental and social impacts of their actions before undertaking them. Between 2013 and 2022, 387 NEPA cases were brought before the U.S. appellate court system, resulting in an average delay of 4.2 years in project start dates. In a follow-up report, the Breakthrough Institute expanded the count of court cases to include over 1,400 cases filed in U.S. District and Circuit Courts and showed that a meaningful subset (7% of projects) of the projects remained in litigation for more than six years, reflecting a long tail of extended delays.
Even though there is no comprehensive economy-wide litigation cost analysis for cases conducted under NEPA, anecdotal evidence from delayed projects suggests lost economic value to affected economies, in addition to direct legal costs. For example, New England Clean Energy Connect (NECEC), a large-scale energy transmission project from Quebec to Massachusetts, was delayed due to litigation, costing Massachusetts taxpayers an extra $500 million due to inflation.
Climate litigation takes a different approach, directly targeting the companies rather than specific projects: A growing number of states, municipalities, nongovernmental organizations, environmental, and youth groups have filed lawsuits seeking damages for alleged climate-related harms under public nuisance, consumer protection, fraud, or deceptive practices theories. While these cases aim to shape public policy in favor of more ambitious climate action, the ultimate result is the strangling of the pool of capital needed for building infrastructure, by increasing legal costs, uncertainty, increased risk premiums, restricted financing, and lowering stock returns, as has been shown in the research.
And then there are the legacy/coastal damage lawsuits, which have outsized economic impacts at the state level, especially for the ones that rely heavily on targeted industries. For example, since 2013, more than 40 lawsuits have been filed by Louisiana parishes and state officials against over 200 oil and gas companies, alleging that decades of federally directed dredging, drilling, and pipeline construction contributed to coastal land loss. According to a recent report by the Pelican Institute, these lawsuits have translated into a steeper decrease in oil and gas employment in the state compared to the national average, 37% versus 24% since 2009. State mineral royalties also declined sharply: average annual collections fell from about $404 million (2009–2013) to $190 million since 2014, and cumulative receipts are roughly $2.1 billion versus about $4.4 billion if pre-2013 levels had persisted. These are funds and jobs desperately needed to build the infrastructure for Louisiana’s future.
The evidence demonstrates that lawfare has become a structural force shaping U.S. energy infrastructure development. Understanding how lawfare operates—and how it affects energy security, economic competitiveness, and national resilience—is essential to designing a durable legal and policy framework that supports environmental protection while enabling the U.S. to meet its rising energy demand and remain globally competitive.
Dr. Pinar Çebi Wilber is Chief Economist and Executive Vice President of the American Council for Capital Formation.
