WASHINGTON – The oil industry’s leading lobby group is preparing to approve a price on carbon emissions, which would be the strongest signal yet that oil and gas producers are ready to accept the government’s efforts to deal with climate change.
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According to a draft statement reviewed by the Wall Street Journal.
“API supports economy-wide carbon pricing as the government’s primary climate policy instrument to reduce CO2 emissions while helping to keep energy affordable, instead of mandates or measures normative regulations ”, indicates the draft declaration.
The API executive committee was due to discuss the proposed statement this week. In a statement to the Journal, Megan Bloomgren, API senior vice president of communications, said the group’s efforts “are focused on supporting a further US contribution to the global Paris agreement.”
Carbon pricing aims to discourage the production of harmful greenhouse gases by putting a price on emissions. The API draft declaration would endorse the concept in principle, without supporting a specific pricing system such as a carbon tax.
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The approval of carbon pricing by the oil industry’s largest trading group would underscore the evolution of climate change policy, as major trading groups recognize the dangers posed by greenhouse gases and move forward. adapt to a new reality in Washington. Another large group of companies, the Business Roundtable, approved carbon pricing last year.
President Biden has campaigned to treat climate change as a crisis, and since taking office with Democrats also controlling Congress, several major business groups have announced their support for new climate initiatives.
The API was one of the fiercest opponents just over a decade ago, when Congress last considered major legislation on the issue, a plan to charge and trade issuers for their contributions to climate change. Today, it is just the latest in a series to support similar plans to price or tax emissions, following an announcement by the U.S. Chamber of Commerce in January.
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The institute’s draft declaration stops before explicitly approving a carbon dioxide emissions tax or other specific pricing framework, and stops at the language of environmental activists who argue that the world must move away from fossil fuels completely.
But it continues a turnaround that has accelerated since Mr. Biden’s victory. In recent weeks, API has backed down on past opposition to direct federal regulation of oil and gas industry emissions. And he points out that industry can play a role in helping the world tackle climate change. This has involved laying the groundwork publicly to support some form of pricing on carbon emissions.
In his annual State of US Energy Report for January, he listed “market-based government policies” to reduce emissions throughout the economy as a policy that would support progress. The Washington Examiner reported that this was the first time this report included such language.
“The risks of climate change are real,” says API’s annual report. “Market-based policies can drive meaningful emission reductions across the economy at the lowest societal cost. An example can be carbon pricing – balancing GHG reduction with the flexibility and pace to keep energy affordable. “
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Internally, many API members strongly oppose approving a carbon tax or imposing standards for the use of renewable energy, according to a person familiar with the internal discussions that have brought them to light. qualified as “passionate”. The organization had similar internal disputes over its stance on regulating methane emissions, which the Trump administration decided to reverse at the behest of independent producers.
These struggles against climate change have increased the pressure on IPY from within. While many small US-based businesses in its members want it to lobby for traditional values - weaker government regulation and increased access to federal lands – some of the larger companies, especially those based in Europe, pushed the organization to accept an ongoing transition to cleaner fuels, often fueled by government intervention.
Just two days after the publication of the annual report, Total SA announced that it was leaving the organization, saying the API was not fully aligned with it on climate change. The French oil giant lobbied to transform its business into producing and selling renewable energy and directly highlighted API’s past opposition to carbon pricing and US regulations on methane emissions in its decision.
“The (company) recognizes the considerable contribution of API, for more than a century, to the development of our industry,” said CEO Patrick Pouyanné in a press release at the time. “Nevertheless, as part of our Climate Ambition … we are committed to ensuring, in a transparent manner, that the professional associations of which we are members adopt positions and messages aligned with those of (the company) in the fight against climate change. “