April 11, 2007 -- By Jeffrey Ball, The Wall Street Journal
Oil Producer Joins Effort To Shape New U.S. Policy On Greenhouse-Gas Limits
ConocoPhillips became the first major U.S.-based oil company to add its voice to the call for a federal global-warming-emission cap, in the latest sign that U.S. companies are jockeying to shape any legislation.
ConocoPhillips said it was joining the U.S. Climate Action Partnership, a group of corporations that have called for a U.S. emissions cap and have outlined broad principles that they want any cap to include. The group formed earlier this year, following the takeover of Congress by Democrats, whose leaders have said they want to legislate an emissions cap.
"We believe that the science is quite compelling and that climate change is certainly attributed to human activity and to the substantial use of fossil fuels," Jim Mulva, chairman and chief executive of Houston-based ConocoPhillips, said in announcing the company's position.
Exxon Mobil Corp., the world's biggest publicly traded oil company by market value, also has begun talking about what it wants any global-warming constraint to include, including market flexibility. But Exxon isn't saying it either endorses or opposes a federal cap. Said Dave Gardner, an Exxon spokesman: "The devil's in the details."
European-based oil giant BP PLC has endorsed a U.S. global-warming emissions cap. It is the only other oil company in USCAP.
ConocoPhillips's announcement comes amid mounting political and consumer concern about global warming and rising gasoline prices. The U.S. Energy Information Administration said yesterday that the global oil market is likely to remain tight -- and pump prices volatile -- during the summer driving season. Regular-grade gasoline should average $2.81 per gallon this summer, it said, compared with $2.84 per gallon last summer.
Companies like ConocoPhillips that are endorsing a federal global-warming cap are doing so largely in the belief that they can shape it to minimize the cost to them. Many companies, eyeing the proliferation of differing global-warming rules in places such as California and the Northeast, are concluding that a single nationwide cap will be less onerous than a patchwork of state rules.
A U.S. policy, they figure, would be easier to integrate into global-warming regulations being implemented in other countries where U.S.-based multinationals like ConocoPhillips also do business. That integration would make it easier for companies to satisfy any U.S. obligation by buying cheaper emission "credits" from the developing world, where the cost of projects to reduce or offset fossil-fuel emissions is lower. ConocoPhillips's Mr. Mulva stressed that his company wants a U.S. cap to "have linkages" to policies in other countries.
Mr. Mulva also said he wants to ensure than any federal emissions cap doesn't "create winners and losers" in the economy. But companies already are ratcheting up their lobbying push in Washington to influence the details of whatever cap emerges. That scramble is particularly intense among the industries likeliest to be hit: electric utilities, heavy manufacturers, auto makers and oil producers.
Transportation isn't likely to be hit as hard as the utility sector. That is because it is cheaper for the economy to curb a ton of emissions of carbon dioxide, the main global warming gas, by targeting utilities than by targeting cars and trucks. Still, the transport sector is likely to be hit. The bulk of that burden could fall either on fuel producers, which might be required to produce fuel that contains less carbon, or on auto makers, which might be required to engineer their vehicles so they burn less fuel.
In an indication of that tension, Mr. Mulva all but blessed a toughening of a policy the auto industry reviles: the federal government's decades-old requirement that each auto maker's fleet of new vehicles each year meets a minimum average fuel economy. "We need to do everything we can to just have more energy efficiency," he said, adding: "If that leads to higher requirements -- more miles per gallon in terms of the automobiles we drive -- that all does help in the more efficient use of energy."
The auto industry, for its part, is trying to push much of the burden onto others. It, too, has begun talking favorably about an economy-wide cap on global-warming emissions, which it figures is likely to go easier on the auto industry than would a significant toughening of the federal automotive-fuel-economy requirements.
No comments:
Post a Comment