WASHINGTON – The oil industry’s top lobby group is preparing to agree to set a price on carbon emissions in what would be the strongest signal yet that oil and gas producers are ready to accept the government’s efforts to confront climate change.
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The American Petroleum Institute, one of the most powerful trade associations in Washington, is ready to include putting a price on carbon emissions as a policy that would “lead to the most economical ways to achieve the ambitions of the Paris Agreement,”
“The API supports economy-saving CO2 prices as the primary government’s climate policy instrument to reduce CO2 emissions while helping to keep energy affordable instead of mandates or regulatory action,” the draft statement said.
The API’s executive committee was due to discuss the proposed statement this week. In a statement to the magazine, the API’s senior vice president of communications, Megan Bloomgren, said the group’s efforts “are focused on supporting a new US contribution to the global Paris agreement.”
The purpose of carbon pricing is to counteract the production of harmful greenhouse gases by setting a price on emissions. The API draft statement will, in principle, endorse the concept without backing a particular pricing scheme such as a carbon tax.
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An approval of oil pricing from the oil industry’s main trading group will underscore the changing climate change policy as major business groups recognize the dangers of greenhouse gases and adapt to a new reality in Washington. Another major business group, the Business Roundtable, joined the CO2 pricing last year.
President Biden fought to treat climate change as a crisis, and since he rose to power along with Democrats who controlled Congress, several major trading groups have also announced support for new climate initiatives.
The API was one of the toughest opponents more than a decade ago when Congress last considered major legislation on the subject, a plan to make issuers pay and act for their contribution to climate change. Now it’s just the latest of several supporting similar plans to put a price on or emit emissions following a statement from the U.S. Chamber of Commerce in January.
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The institute’s draft declaration stops short of explicitly approving a tax on carbon dioxide emissions or other specific pricing frameworks and stops shortly after language for environmental activists who claim the world should transition from fossil energy sources.
But it continues a turnaround that has accelerated since Mr. Biden’s victory. In recent weeks, the API has withdrawn on previous opposition to direct federal regulation of oil and gas industry emissions. And it is emphasized that industry can play a role in helping the world tackle climate change. This has included laying the groundwork for publicly supporting some form of carbon emissions price.
In its January January State of American Energy report, it listed “market-based government policies” to reduce emissions across the economy as a policy that supports progress. The Washington Examiner reported that this was the first time that this report contained such a language.
“The risk of climate change is real,” the API annual report said. “Market-based policies can promote meaningful emission reductions throughout the economy at the lowest societal costs. An example might be carbon pricing – balancing greenhouse gas reduction with flexibility and pacing to keep energy affordable. ”
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Internally, many API members are strongly opposed to supporting a carbon tax or introducing standards for the use of renewable energy, according to a person familiar with the internal discussions that describe them as “heated.” The organization had similar internal conflicts over its stance on methane emissions rules, which the Trump administration had moved to regret at the request of independent manufacturers.
These battles over climate change have increased the pressure on the API from within. While many of the smaller, US-based companies in its membership want it to push for traditional values - lower government regulation and more access to federal states – some of the big ones, especially those based in Europe, have pushed the organization to accept an ongoing transition to cleaner fuels, one often fed by government intervention.
Just two days after the publication of the annual report, Total SA announced that they were leaving the organization, saying that the API was not fully aligned with it on climate change. The French oil giant has been pushing to turn its company into renewable energy production and sales, pointing directly to API’s previous opposition to carbon pricing and US regulation of methane emissions in its decision.
“(The company) recognizes the significant contribution of the API for over a century to the development of our industry,” said CEO Patrick Pouyanné in a statement at the time. “Nevertheless, as part of our climate ambition … we are obliged to ensure in a transparent way that the industry organizations of which we are members adopt attitudes and messages that are adapted (the company’s) in the fight against the climate. change.”