What Does an Oil Industry Climate Bill Look Like?
Last Thursday I experienced one of those unique days I sometimes have when I get the opportunity to interview people that don't always stand on the same side of the street, as it were. Not only did my day see an interview with environmental activist and global eco-adventurer, David de Rothschild, as he and a nine-person crew wrapped-up a 130-day Pacific crossing aboard the Plastiki -- a boat made mostly out of old plastic soda bottles; I also sat in on a conference call with the American Petroleum Institute, the single largest oil and gas industry group in the U.S.
While I don't always agree with the policy positions the API takes on energy and climate, I do appreciate the fact that they even bother to reach out to me and ask that I participate in the calls. After all, they know who I am, where I stand and that I am not exactly a pushover, at least I don't think I am.
Having seen a sudden uptick in television ads decrying new energy taxes, I was reminded that API still seemed opposed to pretty much every energy and climate bill that has been kicked around Capitol Hill for the last several years. With that in mind -- and the fact that API has said in the past they would support an energy and climate bill if it had the right characteristics -- I asked them what an API climate bill would look like.
This is how it went down:
TIM HURST: So since it looks like there isn’t really going to be much in the way of climate action coming out of the Capitol this – at least before August and probably not until, you know, late this year, you know, it’s no secret that API has been opposed to a cap-and-trade and I believe opposed to the upstream cap-and-dividend, although I’m not entirely sure about that. Where does API sit on this sort of utility-only provision that’s kind of being kicked around right now? And is there – what does an API climate bill look like?
RUSSELL JONES (API): This is Russell. I have to say that we don’t have a flat opposition to cap-and-trade. We did very much very clearly oppose the Waxman-Markey bill because of the way it was written. Looking forward at other bills, you know we’ve been interested in – you know, if the Senate could actually create a utility-only bill. But, not having seen one, we can’t react to one since we haven’t even seen one. But we’ve looked at a variety of approaches. We have members that support cap-and-trade. We have members that support a carbon-tax approach. So it really, for us, we need to look at whatever – we need to look at specific language to understand how it operates.
One of the issues that we’ve had with the structures of the bills like Waxman-Markey is the treatment of the petroleum consumers compared to other sectors of the economy like the electricity consumers. The Hill – the bills that have been written have very aggressively tried to protect electricity consumers from the impacts of higher prices caused by the allowances by giving them away for free, which is one of the great ironies of this in that all of the studies indicate that the cheapest way to reduce the emissions is in the electricity sector.
But, on the other hand, they have no interest, apparently, in offering similar protection for petroleum-product consumers. So we would think a level playing field is important. And that includes a level playing field for all consumers.
MR. HURST: ...How about cap-and-dividend? Did you comment on that? I actually fell off the call for a second.
MR. JONES: We haven’t – we don’t have a specific position on cap-and-dividend. I mean, we do have the Cantwell-Collins bill that’s out there. We’ve looked at it. Our members have looked at it. But until the Senate really starts looking at something like that seriously, again, it gets down to, how is a bill like that written? And we’d prefer to wait to see what the actual structure of a bill is.
So, the long and short of it is that API says they would support a climate and energy bill if it had all the right components, conditions and treated different energy sectors equally. However, because they are such a large organization with members that take divergent positions on energy and climate, they have been unwilling to throw their support behind any bill, preferring to continue with their broad opposition to "energy taxes" instead.
I guess I have trouble seeing how API will ever be able to reconcile their across-the-board opposition to energy taxes with the reality that any effective climate and energy bill will likely have some kind of new tax in it. And until I actually see the day that API throws their support behind a climate bill, I have a hard time believing that their theoretical support for one isn't just smoke and mirrors.
Photo credit: Tim Hurst/LiveOAK Media
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