Some oil companies are addressing climate change through various initiatives, including ongoing investments in alternate energy and supporting a new political action committee dedicated to passage of a US carbon tax.
These efforts come as a recent United Nations report outlines how manmade carbon emissions are driving the rate of global warming.
The UN Intergovernmental Panel on Climate Change issued a special report saying human activity has contributed to the world warming by 1° C. The areas most affected are small islands, major cities, coastal regions, and high mountain ranges.
In a report entitled “The Global Warming of 1.5° C.,” IPCC assessed how warming of 1.5° C. compared with 2° C. The lower half-degree difference could mean 420 million fewer people exposed to severe heatwaves, the report said.
IPCC said minimizing warming to 1.5° C. would require transition across society worldwide to cut greenhouse gas emissions.
“Over the next 10-20 years, we must transform our energy, agricultural, urban, and industrial systems,” IPCC said. The report said limiting Earth’s temperature will involve changing the way people use energy, such as tripling the share of renewable to supply 70-85% of electric power worldwide by 2050.
Oil companies respond
ExxonMobil Corp. announced a $1-million donation over 2 years to Americans for Carbon Dividends (AFCD)—the advocacy arm of the Climate Leadership Council. CLC proposes about a $40/tonne tax on carbon dioxide emissions.
The carbon tax would raise costs for natural gas and coal. Revenue would be distributed to taxpayers. The proposed tax would increase over time.
ExxonMobil’s donation was reported a day after the IPCC report, which called for drastic cuts in CO2 emissions. ExxonMobil already had supported the CLC proposal, along with BP PLC, Royal Dutch Shell PLC, and Total SA.
Several former policymakers, including James A. Baker III and George P. Shultz, support the CLC proposal, Baker and Shultz each served as US Secretary of State for Republican administrations. Baker also was Secretary of the Treasury for President Ronald Reagan and was White House Chief of Staff for President George H.W. Bush.
“This is a significant step in furtherance of the Baker-Shultz carbon dividends proposal,” said Greg Bertelsen, CLC senior vice-president, of the ExxonMobil financial donation. “We are still very early in the process. The organization is now just 3 months old.”
On Sept. 24, ExxonMobil, Chevron Corp., and Occidental Petroleum Corp. formally joined a coalition of other energy companies in the Oil & Gas Climate Initiative (OGCI). The group, which has committed $1 billion to financing ventures to reduce emissions, seeks to cut methane emissions by one-third by 2025.
Carbon tax
Meanwhile, former Federal Reserve Chairs Janet Yellen and Ben Bernanke are founding members of the CLC along with former Environmental Administrator Christine Todd Whitman.
AFCD reportedly has hired Squire Patton Boggs as its lobbyist. Former Sens. Trent Lott (R-Miss.) and John Breaux (D-La.) are senior counsels at Squire Patton Boggs.
The new PAC appears to be an effort by the energy industry, excluding coal, to guide a climate-related energy transition. The goal could be to make the transition as predictable as possible. History shows climate-change issues to be highly political. Industry likely is trying to get ahead of a climate policy curve regardless of which political party is in control.
AFCD somewhat reminds this OGJ editor of the US Climate Action Partnership from 2006. That was a cap-and-trade approach to develop a climate bill with the support of big industry, including oil and gas. But efforts ended with a compromise unsatisfactory to most. The Climate Action Partnership died in 2010.
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.