The American Petroleum Institute, the largest fossil-fuel lobby, is joining the call for pricing carbon as one way to lower U.S. emissions and slow global warming.
In its release out Thursday, API said it backs “sensible legislation that prices carbon across all economic sectors while avoiding regulatory duplication.”
The stance marks a shift for the oil and gas industry, but is largely positioned as a substitution for other, stricter regulations on the industry, analysts said.
It’s also a “market-focused” response to the push at the company level and by the federal government to work toward net zero emissions in coming decades.
A carbon price could take the form of a tax or be created in a cap-and-trade program.
The industry needs to do its part to cut emissions while providing more energy to the world, said API President Mike Sommers during a briefing.
Lawmakers and industry groups who most vocally express concern about an aggressive U.S. climate-change stance have typically stressed newly acquired U.S. energy independence and the significance of that leadership role as the nation navigates tough geopolitical and trade challenges. Lower energy costs are also cited.
But the U.S. is also seen as lagging major economic powers in combating climate change and the Biden administration returned the U.S. to the voluntary Paris Climate pact in a reversal of Trump administration policy.
“API is trying desperately to distract the Biden administration from the crucial work of keeping polluting fossil fuels in the ground. Biden must not allow rich oil companies to escape climate accountability with yet more self-serving greenwashing announcements,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute.
“Instead, the president should declare a climate emergency and permanently halt the leasing of public land for drilling and fracking,” she said.
The API endorsement was part of a broader policy framework of industry and government actions on climate change it released Thursday as President Biden holds the first news conference of his administration and ahead of the U.N.-organized 26th Conference of the Parties (COP26) on climate change to be held in Glasgow in early November.
API also indicated it backs more uniform reporting of emissions from the natural gasNG00 and oil industryCL00, which reflects a broader push from industry and financial regulators, as well as investor lobbies, to make clearer the risks facing the nation from climate-change exposure.
“Confronting the challenge of climate change and building a lower-carbon future will require a combination of government policies, industry initiatives and continuous innovation,” API’s Sommers said, citing the emissions reductions the U.S. has already tallied.
He reiterated the position of the trade group and many of the mostly Republican lawmakers representing traditional energy states who want “market-based policies that foster innovation, including carbon pricing.”
Read: In a first, FERC weighs climate-change impact of proposed U.S. natural gas pipeline
In September, the Commodity Futures Trading Commission led a multigroup effort among regulatory bodies to advance recommendations for the financial system on climate change. Included was a call for a national price on carbon pollution. Such a “tax,” as some mostly critics call it, would require congressional approval. U.S.-based carbon pricing has so far been a regional effort, and with mixed results in drawing interest and volume.
API and its members also support climate actions that would fast-track the commercial deployment of carbon capture, utilization and storage (CCUS). Carbon capture, rather than sharply reducing fossil-fuel extraction, has been a key feature of most GOP-led efforts in this area.
Read: Nuclear and carbon capture may form bipartisan (re)starting point on climate change
API also supports hydrogen technology, innovation and infrastructure and agrees that more regulation for leaky methane could be supported. Read the full proposed framework.
In 2018, carbon dioxide (CO2) emissions from fossil fuels burned for energy were equal to about 75% of total U.S. anthropogenic greenhouse gas emissions (based on 100-year global warming potential) and about 93% of total U.S. anthropogenic CO2 emissions. That’s the most complete annual data available currently on the Energy Information Administration site.
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